MedPharm Bets Big On Iowa Medical Marijuana

Photo Credit: Rebecca F. Miller

Iowa’s first licensed medical marijuana manufacturing facility is a far cry from a basement grow operation.

MedPharm Iowa has spent more than $10 million rehabbing 15,000 square feet in an old warehouse east of the Capitol into a state-of-the-art facility to cultivate, grow and dry medical marijuana and manufacture products that go on sale Dec. 1.

It’s a big gamble, considering lagging patient registration so far and a lack of legislative action on further expanding Iowa’s latest medical marijuana law.

“There still are a couple of issues existing with the law that prevent it from becoming a sustainable program,” said Lucas Nelson, general manager of outsourcing services for Kemin Industries and lead consultant for MedPharm.

Kemin, a Des Moines-based ingredients firm best known for extracting lutein from marigolds, is leasing space to MedPharm and consulting for the medical cannabis firm, owned by Kemin Chief Executive Officer Chris Nelson.

MedPharm would like to see Iowa raise or remove the 3 percent cap of tetrahydrocannabinol, or THC, allowed in medical marijuana products and expand the list of medical conditions approved for use of the products, Lucas Nelson said, during a tour of the plant.

Several bills pushing for changes still are viable this legislative session, including Senate File 2372, which would alter the list of medical conditions that qualify.

It would take 12,000 Iowans registered to buy medical marijuana for a robust market, Nelson said. The company has predicted only 6,381 registrations in 2018.

Yet still fewer, the Iowa Department of Public Health had approved only 316 registration cards as of March 15, including 243 patients and 73 caregivers. The annual fee for registration is $100 for most patients, with a few exclusions. Caregivers pay $25.

The MedPharm facility is being built around a highly regulated process of growing medical marijuana. Because MedPharm is the sole manufacturer licensed in the state, some are concerned a blight or glitch at MedPharm could wipe out Iowa’s entire crop of medical marijuana.

“It’s certainly a fear,” Nelson said.

The plant will have many security features, including surveillance cameras and secure entrances. All employees will scrub in before entering the grow area so diseases and bugs aren’t passed on to plants, Nelson said. There are separate rooms for growing mother plants from seeds — the first step in the process that will begin next month — and the rest of the plants, which will be grown starting in June with cuttings from the mother plants.

MedPharm has duplicate growing rooms so not all plants will be raised in one chamber.

Grow rooms will have 18 hours of intense light to simulate day and 12 hours of lesser light to mimic night, explained Matt Madison, an engineer from Kemin who is working on the MedPharm facility.

After plants are harvested, they go to a drying room, where they will hang upside down. MedPharm hasn’t decided yet whether just the marijuana buds or the entire plant will be ground before oils are extracted, said Nick Tebockhorst, a plant production associate at Kemin.

The company says it will produce oil, soft gel capsules, suppositories and cream.

MedPharm will have six employees at first, including growers and extraction chemists. Some may have experience growing marijuana in other states, others may be agronomists trained to spot and fix problems during the growing process, Lucas Nelson said.

MedPharm also is hoping to get in on medical marijuana sales.

The company is among seven entities that have applied to operate 21 dispensary locations across the state. MedPharm has applied for licenses in Cedar Rapids, Coralville, Sioux City, Davenport and Windsor Heights and has endorsements in all cities, Nelson said.

The Public Health Department expects to license up to five dispensaries by April 1, but Nelson said he expects notices of intent to license will be issued next week.