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Medical marijuana manufacturer coming to Iowa City

IOWA CITY — Soon the Iowa Cannabis Co. will be able to manufacture and sell medical marijuana products in Iowa City.

The Iowa Department of Public Health has allowed the company to transfer its license to manufacture medical marijuana products from Cedar Rapids to Iowa City, where the firm also will open a dispensary for consumers this fall.

“ICC MFG has asked to relocate its manufacturing facility to Iowa City,” Owen Parker, program manager for Iowa’s Office of Medical Cannabidiol, said in a meeting Friday of the Iowa Medical Cannabidiol Board. “IDPH did grant that approval and local zoning authority has been provided. They will have operation to begin in 2021.”

The manufacturing site under consideration is in an industrial zone on the south end of Scott Boulevard on Iowa City’s southeast side, officials said.

Iowa Cannabis’ Iowa City dispensary — one of five in the state — was supposed to open by July 1, but the state gave the company an extension to start selling products Oct. 1. The company will open a dispensary in Council Bluffs at the same time and has operated a Waterloo dispensary since 2018.

The Iowa City dispensary will be in the strip mall by Harbor Freight and La Regia Taqueria, city officials told state Sen. Joe Bolkcom, D-Iowa City.

More than 6,000 Iowans have qualified to be in the medical marijuana program, which addresses a dozen different conditions including Parkinson’s disease, cancer and autism.

In June 2018, the state Public Health Department announced it would award the second of two state manufacturing licenses to Iowa Relief LLC for a facility in Cedar Rapids. The first Iowa manufacturing site was MedPharm Iowa, which opened in 2018 in Des Moines.

Iowa Relief built a 5,000-square-foot cannabis cultivation and processing plant at 1420 26th Ave. Ct. SW and started manufacturing a marijuana tincture there in 2019. But then the COVID-19 pandemic hit, and the number of Iowans participating in the medical marijuana program fell off temporarily. Iowa Relief closed its operation and turned in its license in early 2020.

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In February, the state gave Iowa Cannabis Co. a license to manufacture medical marijuana products at 5137 18th Ave. SW in Cedar Rapids. But in the months following, the company asked the Public Health Department if it could instead open its manufacturing plant in Iowa City.

Iowa Cannabis is connected with Cannabis & Glass, a large recreational marijuana store in Spokane, Wash. Owner Aaron Boshart told The Gazette in December 2019 profits from the Washington state stores help support its Iowa medical marijuana operations.

The Legal Status of Hemp Extract in Iowa (Current as of 3/20/2020)

If you are a regular visitor to the blog, then you will recall that way back in May 2019, GRL predicted that it would only be a matter of time before the state explicitly legalized hemp and cannabinoids extracted from hemp, like cannabidiol or CBD following passage of the 2018 Farm Bill.

We couldn’t have been more prescient. Not long after the post published, Governor Reynolds signed Senate File 599, now known as the Iowa Hemp Act codified under Iowa Code chapter 204.

That means the over-the-counter CBD is legal for retail sale, right?

The law in Iowa is currently in flux due to the contingent implementation language that first requires USDA approval of the state’s plan to regulate hemp and hemp products. Until that occurs, here is our view on the current status of hemp extracts like CBD in Iowa.

The state continues to maintain a highly regulated medical marijuana program through Iowa Code chapter 124E. This program is not impacted by SF 599. Medical cannabidiol (or mCBD) is an extract from cannabis classified as marijuana, hot hemp. Marijuana remains a Schedule I controlled substance under both state and federal law because of the high concentration of THC (hemp under federal law contains less than 0.3 percent THC by dry weight). Marijuana extracts under chapter 124E can contain up to 3 percent THC in Iowa (10 times the THC concentration in federally legal hemp!) and are purchased from licensed dispensaries to hemp alleviate certain qualifying medical conditions. Registered card holders are exempt from criminal prosecution for possession of marijuana under Iowa Code chapter 124 and tax stamp violations under chapter 453B. The federal government is also prohibited from spending budgeted monies for the Department of Justice on prosecuting individuals who are complying with a state authorized medical marijuana program like chapter 124E.

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Interestingly, while the current formulations of mCBD contain CBD, due to its relative abundance in marijuana compared to other cannabinoids, they needn’t contain any CBD at all in Iowa. Any cannabinoid extracted from marijuana will suffice for mCBD.

Regrettably, the unfortunate use of the term “cannabidiol” in mCBD in Iowa has caused real confusion over the legality of over-the-counter (OTC) CBD.

Remember, the provisions of SF 599 won’t take effect until the USDA approves Iowa’s hemp plan. As of March 11, 2020, the plan is still under review. Notice of any approval must also be published in the Iowa Administrative Bulletin before hemp and hemp products can be regulated. Even then, the state is essentially punting to the federal government by taking the position that OTC CBD products cannot be marketed because the FDA has not yet given the green light for CBD to be used as a dietary supplement. I anticipate this may take some time to sort out, but the FDA is signaling that it’s headed in the right direction. It also helps that hempseed oil, which the FDA already determined to be generally recognized as safe (GRAS) for food last December, contains a number of cannabinoids, including THC and CBD. You can currently purchase hempseed oil from the supermarket. If the FDA says hempseed oil is GRAS, then the naturally occurring cannabinoids contained within it should also be legal, right? We believe so. Hempseed oil is just a less concentrated form of OTC CBD.

Until this issue is sorted out, Iowans who possess or sell CBD may still face prosecution depending on where the arrest occurs. The Iowa Attorney General claims (not surprisingly) that CBD derived from hemp is still “technically” marijuana and therefore subject to the whims and discretion of local law enforcement. The chances of being prosecuted for CBD vary wildly across the state. Some county attorneys welcome prosecution while others astutely recognize the waste of resources directed at products that have already been deemed legal by the Iowa General Assembly.

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If you are arrested for CBD, then you should contact the firm immediately. Depending on the circumstances, you could be facing multiple felonies with potential lifelong consequences. We can determine whether the particular extract is derived from federally legal hemp and whether it is marketed as a dietary supplement. We can also raise potential defenses that will make it difficult for the state to prove beyond a reasonable doubt the extract is marijuana under chapters 124 and 453B.

Here’s another prediction, too. The state will soon abandon the positions that are operating to delay approval of the hemp plan at the federal level with the USDA. Once that takes place, we’ll be one step closer to bringing this era of so-called prohibition to a close. Until then, you can continue to rely on GRL to give you the straight dope on CBD.

GRL Law. We know hemp.

As anticipated, the USDA finally approved the state’s hemp plan on March 20, 2020. For more information, see our blog post on this subject.