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State receives 29 letters of intent for medical marijuana manufacturing

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More than two dozen parties intend to compete to become one of Minnesota's certified medical cannabis manufacturers under the state's new medical marijuana program.

The Minnesota Department of Health received 29 letters of intent from individuals or groups by the Friday deadline, it announced in a press release. The department had asked anyone interested to submit the letter, signaling their intent to submit a full application by the upcoming Oct. 3 cut-off date.

Submitting the letter doesn't obligate someone to actually send a full application, the department said, but allows the staff to plan for the application review process.

The department did not identify who sent in letters of intent, saying it would provide details about applications only as allowed under state law, in order to "help ensure a level playing field for all applicants throughout the process."

The formal application – which you can see in full here – is 36 pages long, and ask potential manufacturers to provide detailed plans about how they would grow, cultivate, transport, and even market the product.

On top of the phone book’s-worth of information needed to apply is a hefty cost.

Simply applying requires a non-refundable $20,000 application fee, as outlined in the application Q&A. Then the two manufacturers selected will be on the hook for an annual fee to cover the costs of the state monitoring the program, which could range from $75,000-$100,000.

There are also, as the Pioneer Press noted, investments that will need to be made in facilities, machinery, and the process of turning the plant into a legal medicine (since the law does not allow the plant to be smoked in leaf form, but rather ingested as a pill or oil). Two interested parties told the paper start-up costs could approach $10 million.

The two chosen manufacturers, who will each have four distribution sites across the state, are scheduled to be registered on Dec. 1, barring the use of a six-month extension that can be applied if choosing two proves difficult.

See a full timeline of the medical marijuana program rollout here.

Cities mull cannabis production facilities

While the state has the final say when it comes to choosing manufacturers, cities are already starting to review proposals for medical cannabis production facilities within their borders.

Earlier this week, the Cottage Grove city council unanimously approved a plan from LeafLine Labs LLC, a new company founded by members of the Bachman family.

The South Washington County Bulletin noted it includes a roughly 50,000-square-foot facility at the Cottage Grove Business Park, with plans to eventually quadruple its size. Around it would be a wrought iron fence and security gate, the Minneapolis-St. Paul Business Journal said. Marijuana wouldn’t be sold on-site.

Up north, Jake Chernugal presented his plan to the Bemidji City Council, the Bemidji Pioneer reported.

He told the city council he’s raised the $20,000 needed for the application fee and plans to submit the application.

The Headwaters Health Center Medical Cannabis Manufacturers (HHC) facility would use hydroponics to grow the plants, which uses water and mineral mixtures instead of just soil. Chernugal’s plan says the marijuana would be grown and distilled at the Bemidji site and then distributed by local MedSave Family Pharmacy, which his father owns, the Bemidji Pioneer said.

The proposed HHC site goes against state law, however, which prohibits a marijuana manufacturing or distribution facility within 1,000 feet of a public or private school. Council member Nancy Erickson pointed out during Monday’s meeting that a child care facility was next door to the proposed marijuana farm, the Bemidji Pioneer says.

“I just found that out today, as a matter of fact, about five minutes before I walked in here,” Chernugal said at the meeting. “That’s definitely something we’re going to address, and we’ll be looking for an alternative site.”

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