Stern Takes Medical Cannabis Dispute To Iowa Supreme Court

Photo Credit: Cresco Yeltrah

In a last-resort plea to operate a medical cannabidiol dispensary in Iowa, a Quad-City company is taking its case to the state Supreme Court.

Attorneys representing Nature’s Treatment of Iowa filed legal action Thursday, a day after a Polk County District Court judge denied the firm’s injunction, which sought to stop the state from issuing a Seattle company a license for a Davenport dispensary.

Nature’s Treatment of Iowa, backed by Matt Stern, applied in early March to build a site in Eldridge, but Iowa Department of Public Health officials ruled out its application — before scoring it — during the technical review stage. The company failed to show it had begun the registration process with the Iowa Secretary of State’s office, “a minimum eligibility requirement,” said Sarah Reisetter, the deputy health director.

Stern, who owns a medical cannabis dispensary in Milan called Nature’s Treatment of Illinois, received a rejection letter March 14, and immediately appealed the state agency’s decision. Nature’s Treatment of Iowa became a limited liability company that same day, after its certificate of organization was filed, according to the Secretary of State’s website.

That appeal was sent to the Iowa Department of Inspections and Appeals, which scheduled a telephone hearing for 1 p.m. Thursday, April 12, with an administrative law judge.

“I’m not feeling too positive,” Stern said, calling this a “bizarre” situation. “I just want to be scored.”

Twenty other applications were scored by a team of reviewers based on 13 criteria that included operating documents (150 points), ownership and financial structure (125 points), dispensing (125 points), business overview and plan (100 points) and personnel background and training (100 points) for a maximum 1,000 points.

Have a Heart Compassion Care, a cannabis retailer with six locations in Washington, won the license to run a dispensary in Davenport, the health department announced Tuesday. The company plans to renovate the former Kelly’s Irish Pub & Eatery on the west end of a retail strip center at 2222 E. 53rd St., Davenport. Have a Heart, which is expanding to California, Hawaii and Oregon, also was selected to open a dispensary in Council Bluffs.

Stern’s attorneys filed for the now-denied injunction in Polk County District Court following the health department’s announcement.

Marcelo Ramirez, a representative from Have a Heart, said the state informed its applications coordinator Wednesday that both licenses were en route to Seattle via the U.S. Postal Service.

Polly Carver-Kimm, health department spokeswoman, could not confirm Thursday the state officially issued the Davenport license “due to the potential of additional litigation.”

Ramirez, executive assistant to Ryan Kunkel, Have a Heart’s CEO, said they hold no ill will toward Stern, wishing him “the best of luck.” “We believe everyone has the right to appeal. We just wish that once everything gets settled, everyone in this new program can come together and keep the focus maintained on the patients.”

MedPharm Iowa received licenses for Windsor Heights, a Des Moines suburb, and Sioux City, and Iowa Cannabis Company was granted a license for Waterloo. The legislature determined last year up to five dispensaries could be licensed.

Stern said it is critical the state scores his application in case the law changes. “If they award additional licenses in the future, maybe they’ll give one to us.”

MedPharm Iowa, chosen Dec. 1, 2017, as the state’s only medical cannabidiol manufacturer, must begin supplying dispensaries no later than Dec. 1, 2018, the same date dispensaries must begin selling product.

Iowa law allows license holders to sell marijuana-derived cannabidiol, or CBD, that has a tetrahydrocannabinol, or THC, content of up to 3 percent. THC is the plant’s main psychoactive component that produces a “high.”

As of March 22, a total of 327 patients and caregivers had been issued cards to purchase CBD, according to the health department.