Five years after the Iowa Legislature approved the sale of medical cannabis products in Iowa, the number of registered cardholders, visits to dispensaries and sales have climbed — but at a much slower rate than in other surrounding Midwest states.
Monthly sales have yet to reach $1 million. Just 0.3% of Iowans are registered cannabis cardholders.
But new cards issued spiked to record highs in both March and April, at 1,213 and 1,221, respectively, according to Iowa’s Office of Medical Cannabidiol. Dispensary visits in April reached 6,371, the highest ever. And MedPharm, Iowa’s only manufacturer of cannabis products and owner of dispensaries in Windsor Heights and Sioux City, is preparing for what it sees as growth ahead.
“We still have a massive amount of people who don’t know the program, or who remember what the old program used to be and decided it’s not good enough,” said Lucas Nelson, president of MedPharm, which will be rebranded as Bud & Mary’s.
With providers making cards easier to obtain, lower prices, more product availability and a cap lifted on the amount of THC in products sold in the state, MedPharm anticipates that will change.
Last week, the Iowa-based company announced that it was expanding its existing production facility on Des Moines’ east side, adding up to 20 employees and rebranding.
Groundbreaking is scheduled for Friday and signs with the new name are going up this month, Nelson said.
The name change was a way to honor the fact that it is a family-owned business and differentiate it from more corporatized medical marijuana businesses, Nelson said.
Chris Nelson, the sole owner of MedPharm-Bud & Mary’s, is Lucas Nelson’s uncle. He also is CEO of Kemin Industries, a Des Moines-based global maker of human and animal nutrition products founded in 1961 by “Bud” Nelson and his wife, Mary.
To some, Nelson said, the name MedPharm might have signaled that a cardholder had to be seriously or even terminally ill to qualify for the medical marijuana program, which isn’t the case.
Kemin, acting as consultant to MedPharm, also announced in 2020 it was making new medical cannabis products from hemp with partners in Colorado and Michigan. Kemin expanded in 2021, constructing an 11,700-square-foot building just east of its Des Moines headquarters.
MedPharm-Bud & Mary’s expect to invest $10 million in the facility by early 2023. The company also is launching a new cultivation and production facility and dispensary in Michigan and plans to expand its existing Colorado production late this year.
Most Iowans who use medical cannabis are between 30 and 50, according to figures gathered by the state. Patients must have a qualifying medical condition certified by a health care practitioner and a state registration card that has to be renewed annually.
Read Watchdog’s 2021 series on the growth of the marijuana industry and how Iowa lags
For years, however, the percentage of Iowans who allow their medical cards to expire after a year has remained high. The state’s renewal rate in April was 35%.
Cheaper alternatives are still readily available, especially on the black market, where pot is far less costly than the vapes, capsules, extracts, concentrates, lotions, ointments and tinctures currently available at dispensaries.
Under Iowa law, cannabinoids — tetrahydrocannabinol (THC) and cannabidiol (CBD) — have to be extracted from cannabis plants and tested before being put into the products. Before they are sold, those products have to go through another round of costly testing at a state lab in Iowa City to determine whether they comply with limits on their THC and CBD content.
MedPharm and other proponents of expanding legal cannabis sales in Iowa lost a bid this year at the Legislature to add smokable cannabis flower to the mix of medical products for sale.
But Nelson said he believes progress was made, and he’s hopeful lawmakers and Gov. Kim Reynolds will support that change in the next couple of years.
“I think Minnesota is a pretty good model,” he said, noting that state has recently expanded eligibility for legally purchasing flower marijuana and other products.
“Clearly what that state found is even with a reduction in price, you’re not serving everyone you could. I think we can get done. Hopefully, it’s within the next year or two years.”
In Minnesota, legal medical marijuana sales began July 1, 2015, but the state legislation that authorized those sales, like Iowa’s 2017 law, was one of the most restrictive of its kind in the nation.
Today, Minnesotans with a wider range of ailments, including chronic pain, can qualify for medical cards and flower marijuana, which costs less to bring to market.
Iowa’s licensed dispensaries began providing medical cannabidiol products to patients on Dec. 1, 2018. Other than Bud & Mary’s two dispensaries, three others owned by Iowa Cannabis Co. operate in Council Bluffs, Waterloo and Iowa City.
Iowa prices for the limited number of THC and CBD products available have been among the highest, if the not the highest, in the country, according to industry leaders.
But MedPharm lowered the price of some of its most popular items to get more patients through the door.
To the north, south and east, Iowa is surrounded by states where residents or manufacturers want to ramp up cannabis programs.
Illinois’ rapidly expanding recreational cannabis program had almost $1.4 billion in sales last year. Sales in Missouri’s medical program, with hundreds of licensed dispensaries, hit $200 million last year, state records show.
Lee Rood’s Reader’s Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at firstname.lastname@example.org, at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.