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Cheaper Medical Pot in Minnesota? Cannabis Companies Say It’s on the Way

22May 2021

Patients enrolled in Minnesota’s medical cannabis program will soon get a chance to buy the plant in dried, smokable form. That’s the result of a major change approved by Minnesota lawmakers on the final day of the 2021 legislative session.

The state’s two medical cannabis manufacturers — Vireo Health and LeafLine Labs — say the change will significantly bring down the costs of the program, which has long been criticized for being pricier than other states’ programs.

“Patients will be able to get the same amount of medicine for potentially half the price in flower form,” said Dr. Kyle Kingsley, an emergency medicine doctor who now serves as CEO of Vireo. “It’s just less processing. It’s the simplest form of these medicines for people. That’s the primary driver of cost reduction.”

Minnesota’s current program only allows the sale of cannabis in oil, liquids, or pills. The change has been approved by the Minnesota House and Senate but still requires the governor’s signature. Gov. Tim Walz is expected to sign the bill into law.

Kingsley expects the change to generate even further cost reductions down the road. As more people enter the program, manufacturers will benefit from economies of scale, he said.

The change would take effect March 2022, or as soon as the state’s two manufacturers come up with a process for testing dried forms of the plant. Kingsley said his company has been preparing for this for a long time. Vireo will spend the next six months getting proper testing processes in place, he said.

“The addition of flower as a delivery method is critical to breaking down the cost-prohibitive barrier that comes with an extract-only market,” said LeafLine Labs CEO Scott Schilling in an email. “With flower, there’s no added cost for extraction, formulation or the number of other steps that come with processing plant material; this is mutually beneficial for manufacturers and patients.”

Minnesota has been one of the few states to prohibit the sale of dried cannabis for medical patients, Schilling noted. “It’s an exciting and historic time for medical cannabis in Minnesota,” he said.

Could the change prompt more cannabis companies to take root in Minnesota? Well, likely not. Or at least, not right away. As it’s currently written, the state’s existing cannabis law prevents any other manufacturers from obtaining licensure. Plus, the demand really isn’t there quite there yet, Kingsley said.

“Right now, we’re very demand-limited in the state,” he said. “There aren’t even enough patients to support two operators right now. Both operators continue to lose money.”

But the addition of dried cannabis could change things. Vireo is also licensed to sell cannabis in Arizona, Maryland, New Mexico, and New York. In other states with established programs, dried forms of the plant are the “preferred product,” Kingsley said.

“The majority of our sales in every other state is flower,” he said. “Part of that is the price point; it’s a lot more affordable.”

Changes to Minnesota’s medical marijuana program inevitably lead to questions about recreational legalization in the state. Is it time? Kingsley said he generally supports it, but, in his view, general adult use is a “very different debate.”

“I’m generally a fan of getting people access to what I see is a plant that has a lot benefits and not a lot of downsides as we see with other recreational substances,” he said.

LeafLine’s Schilling had a similar take.

“Any effect that recreational cannabis would have on our medical program should be a positive, in the form of a wider range of more affordable products,” Schilling said.

In April 2020, TCB did an in-depth Q&A with Vireo’s Kingsley.

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