State names its medical marijuana manufacturers

Minnesota has chosen two companies to grow and sell the state's entire supply of medical marijuana.

LeafLine Labs and Minnesota Medical Solutions are led by doctors and backed by enough deep-pocketed investors to keep them solvent through what's likely to be a rocky launch for the fledgling cannabis industry.

Minnesota Health Department Commissioner Ed Ehlinger announced the state's selection Monday, after an exhaustive review of the 12 companies that applied – and paid a $20,000 nonrefundable application fee – for the job. The state, he said, chose the two companies it deemed most capable of cultivating, manufacturing and distributing a safe, quality medicine that's still considered an illegal drug by the federal government and half the states.

"This program is ultimately all about getting ill people medicine that can help reduce their suffering," Ehlinger said Monday. "This is an important day for the rollout of the program, and an important day for those Minnesota suffering from conditions that may be improved through the use of medical cannabis."

An estimated 5,000 patients with conditions ranging from cancer to glaucoma to Crohn's disease could register for the Minnesota Medical Cannabis program this year, although the state warned the figure could be three times larger.

Monday's announcement was the starting gun for the two manufacturers.

LeafLine, which was launched by Minnesota emergency room physicians,10 members of the Bachman family of florists and a Connecticut-based cannabis manufacturer Theraplant, will break ground this month on a 42,000 square foot pharmaceutical-grade manufacturing facility in Cottage Grove. It will begin selling medical marijuana out of distribution center in Eagan next July 1 with other locations to open Hibbing, St. Cloud and St. Paul.

LeafLine founders Dr. Gary Starr and Dr. Andrew Bachman said their experience as emergency room physicians, dealing with patients who weren't helped by standard medical treatments, turned them, in Starr's words, into "staunch patient advocates for medical cannabis."

"LeafLine's patients-first, always, philosophy, stems from our first-hand experience in the emergency department," Starr said. He'd see patients like an elderly woman, fighting cancer and bedridden, whose chronic pain reduced her to tears. "I could not solve that problem. This patient's not alone. We see tough cases every day...many conditions for which medical cannabis may be a potential therapy."

The Minnesota Legislature passed one of the nation's most stringent medical marijuana legalization laws this year, restricting not only the number of patients who can register for the program, but limiting the sale of the drug only to pill or liquid form, not the plant itself. For the doctors, those restrictions are part of the appeal, allowing them to tailor the doses for patients ranging from tiny children with epilepsy to terminally ill patients gripped by wracking pain.

The Health Department estimates that anywhere from 5,000 to 15,000 patients could register for the program, and Ehlinger has the discretion to expand the program to other conditions, including intractable pain, with the Legislature's blessing. In many states, pain patients make up the bulk of patients enrolled in the program -- 93 percent of patients in Colorado's medical marijuana program listed pain as one of their qualifying medical conditions, according to the health department.

"Medical cannabis is not the cure-all some portray it to be," said Dr. Kyle Kingsley, a Minnesota emergency room physician and founder of Minnesota Medical Solutions. "But it can alleviate the suffering of many, and that's a great thing for these patients."

The medical marijuana applicants submitted reams of information to the state about their facilities, their business plans, their finances and their manufacturing processes. Assistant Health Commissioner Manny Munson-Regala flashed slideshow pictures of the mountains of data and documents each applicant supplied for review by a panel of state officials, patient advocates and medical and public safety experts.

"What I'm showing you here is the stack of applications our panelists had to review. It was a good workout," Munson-Regala said. "Over here is a [three-deep stack of boxes on] a dolly -- that was one panelist returning his files."

The Cottage Grove and Otsego city councils signed off on the manufacturing facilities back in September. LeafLine estimates that its facility will employ 35 people initially, and that building the manufacturing facility and greenhouse will create 100 construction jobs. MinnMed told Otsego city officials it expects to employ about 10 people at its facility initially, ramping up to as many as 100 over the next five years. MinnMed estimates that it will employ six to 15 people at the Otsego facility in the first year, with another three to five workers at each of its four dispensaries.

The Legislature called for eight distribution centers in the state, one per congressional district. But the current map leaves patients in many parts of the state -- including the entire southwest corner and the Arrowhead -- hours away from the nearest dispensary. The state may take another look at the number and location of the retail facilities at a later date.

A few Minnesota communities have shied away from the idea of welcoming a marijuana facility to town. Duluth, which spent years locked in legal battles with a local head shop, imposed a temporary moratorium on even debating the issue. Otsego saw not just a chance to advance medical research and help patients, but an economic development opportunity.