MN: Top Executive Out At Medical Marijuana Company

Photo Credit: Dave Schwarz

The chief executive of one of Minnesota’s two medical marijuana manufacturers has left the company after years of financial losses.

Andrew Bachman, LeafLine Labs’ co-founder and its chief executive since 2016, is no longer with the company “in any official capacity,” the company said Thursday in a statement to The Associated Press.

LeafLine opened a care center in June of 2016 in St. Cloud. It was the first care center LeafLine opened outside the Twin Cities.

Thursday’s statement didn’t give a reason for Bachman’s departure, and a company official didn’t immediately respond to questions. Bachman didn’t immediately respond to a voicemail or text message seeking comment.

But LeafLine has struggled since medical marijuana sales began in 2015 in Minnesota. The Cottage Grove-based company lost $6.9 million in its first two financial years. Two top executives left LeafLine last year and it temporarily scaled back its operations in November during a supply shortage that Bachman blamed on lab testing delays.

LeafLine was founded and backed by several family members of the popular Minnesota nursery Bachman’s Floral Garden and Gift Centers, though it’s unclear if any family members are still involved at the company after Bachman’s exit.

LeafLine was one of two manufacturers selected to grow and cultivate medical marijuana in 2014, the year Minnesota’s Legislature passed its law.

The care center in St. Cloud opened in a strip mall on 33rd Avenue. Its pharmacists consult with patients to create specific formulas and calibrate ideal dosages for them. Patients who come to the St. Cloud store can register to pick up a supply for up to 30 days or get questions answered about their dosage, their equipment or registering.

Minnesota’s program is among the most restrictive of 30 states that allow medical marijuana. Using the plant form is banned, and the state limits the availability of marijuana pills and oils to patients with 10 severe conditions. Each manufacturer is required to perform several rounds of testing on their medication and must run four dispensaries across the state.

Those restrictions have made business difficult for both of the state’s manufacturers. An audit last year showed the two companies, LeafLine and Minnesota Medical Solutions, had lost a combined $11 million in just two years of legal sales.

But LeafLine’s losses have been worse, capped by a $4.7 million loss in 2016 alone. The company also struggled late last year with supply, turning away some patients and temporarily closing a storefront in Eagan due to what Bachman said was a delay in the state-mandated, third-party testing of its medication.

This isn’t LeafLine’s first brush with turnover. Bachman was the company’s fourth chief executive since the company formed in 2014. He took over after Manny Munson-Regala, previously a top state regulator of the medical marijuana industry, left the company in 2016 after just eight months on the job.

Last fall, the company’s chief medical officer and chief financial officer resigned, with Bachman citing “personal and professional reasons.”