Dozens of companies want to manufacture marijuana in MN

More than two dozen companies are vying to to be the first to grow marijuana legally Minnesota.

The state will select just two of them to set up manufacturing operations. Already, communities are lining up, eager to welcome those grow operations to town.

"It's not a pot farm," said Cottage Grove City Administrator Ryan Ryan Schroeder, after the city council signed off this week on a plan to set up a medical marijuana manufacturing facility in a local office park. "I equate it to a pharmaceutical plant that Eli Lilly or Merck would operate … They're taking plant materials and converting it into medicine."

Friday was the deadline for budding entrepreneurs to notify the Minnesota Health Department whether they intended to apply for permission to grow and refine marijuana for use by patients around the state. Twenty-nine did so.

By December, the state will whittle the pool of applicants down to two, who will have to have their operations established and their warehouses stocked before the first patients begin lining up to buy on July 1, 2015.

The timetable is so tight, and the startup costs are so steep, a number of companies are securing community support for their proposed operations before the state even sees their business plans. Willmar and Cottage Grove have approved plans to site marijuana facilities in their communities. The Bemidji City Council will be considering a similar proposal.

LeafLine Labs LLC, a start-up that includes members of the Bachman's flower and garden store chain, brought their proposal before the Cottage Grove city council on Wednesday. The 75-page proposal detailed the $4 million, 50,000-square-foot facility the company planned to build on four acres of the office park, using resources from partners who have already set up similar facilities in Connecticut. The facility will employ an estimated 35 people at first and its security, Schroeder said, would be overseen by a former FBI agent.

The sheer number of applications is a mixed blessing for the staff of the state's new Office of Medical Cannabis. There's no way of knowing how many of the entrepreneurs who say they plan to apply actually will — the state expects detailed business plans and financials, along with a nonrefundable $20,000 application fee.

Two dozen applications would be a lot of work for the staff, but Assistant Health Commissioner Manny Munson-Regala said it would also mean the state can set the highest possible standards and cherry pick the best applicants with the strongest business plans to set up the state's first two grow operations and manufacturing facilities.

"I feel a lot less worried now," Munson-Regala said, noting that no money has changed hands yet. The number of people who say they want to apply and the number who actually do could be very different. But, "at least 29 entities have take the first step."

The application deadline is Oct. 3 and the state plans to select two manufacturers by Dec. 1.

Hundreds of people had expressed interest in becoming one of the two producers who will grow and refine the drug for distribution to patients statewide. But the hefty application fee is only one of the daunting hurdles facing would-be pot producers

If selected, Chernugal's company, Headwaters Health Center Medical Cannabis Manufacturers, would have just months to set up an operation, begin growing their crop, hire staff and set up the production facilities to begin distilling the drug into pill and liquid form. He's hoping the family business, MedSave Family Pharmacy, which operates a facility to process herbal remedies for the store, will give him an edge on the production side.