Marijuana Business Magazine July 2018

MARKET AT A GLANCE Main measure Senate File 2470 Year passed 2014 MMJ business regulations Very heavy. The state allows just two cultivators to produce all marijuana, and only these companies can open dispensaries. The businesses, each of which was required to open four dispensaries to serve patients, are subject to rules and regulations that govern location, storage, tracking, recordkeeping, advertising, distribution, hiring, testing, transport and other areas. Dispensary employees who provide patients with MMJ must be licensed pharmacists. State tax requirements Medical marijuana itself is not subject to a sales tax, but any services rendered to recommend MMJ and/or devices required to administer medication are subject to applicable taxes. Sampling of state licensing & application fees Application: $20,000 License: $146,000 (renewed annually) What to watch • Andrew Bachman, co-founder and CEO of LeafLine Labs, one of Minnesota’s two medical marijuana manufacturers, left the company in May. Two other top executives left LeafLine last year, and the company temporarily scaled back operations last November during a supply shortage. After several years of multimillion-dollar losses, 2018 could be a make-or-break year for LeafLine. • Starting in July, autism spectrum disorders and sleep apnea will be added to the qualifying conditions list for MMJ. The conditions could provide a marginal boost to patient counts once they take effect. Minnesota With a limited list of qualifying medical marijuana conditions, a ban on flower and edibles and limited access to dispensaries, Minnesota’s MMJ program is one of the most restrictive in the nation. The addition of intractable pain as a qualifying condition in 2016 and post-traumatic stress disorder in 2017 has given patient counts a shot in the arm. But they remain low for a state with more than 5 million residents. As of May 2018, the number of registered MMJ patients in Minnesota stood at 10,100, up 68% from May 2017. Minnesota’s only two MMJ producers have lost millions of dollars since opening in 2015, causing many indus- try insiders to question the financial viability of the program. July 2018 • Marijuana Business Magazine • 125