Cedar Rapids is getting in ‘on the ground floor’ of marijuana manufacturing

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Illustration by Jordan Sellergren.

Cannabidiol will join breakfast cereal as a one of the things Cedar Rapids proudly produces. Last week, the Iowa Department of Public Health (IDPH) awarded a license to grow marijuana and process it into cannabidiol last week to Iowa Relief, as part of the state’s medical marijuana program. According Iowa Relief’s application, it plans to build a marijuana processing facility in southwest Cedar Rapids.

Mayor Brad Hart hopes this is the beginning of a new kind of economic development for the city, Iowa Public Radio reported.

“I think it’s very possible that there’ll be an expansion for the use of medical marijuana in Iowa and potentially recreational use. So this kind of gets us in on the ground floor,” Hart said.

Only cannabidiol, an oil derived from cannabis, prescribed by doctors to treat seizure disorders, certain symptoms of cancer, multiple sclerosis, AIDS or HIV, Crohn’s disease, ALS or Parkinson’s disease, is currently legal in Iowa. In March, IDPH awarded licenses to create cannabidiol dispensaries in Council Bluffs, Davenport, Sioux City, Waterloo and the Des Moines suburb of Windsor Heights.

Hart had pushed for Cedar Rapids to be the site of a dispensary, stating in a letter to IDPH, a dispensary would help the city in “achieving our goal of becoming a city that supports residents’ health needs while providing economic development that will make Cedar Rapids a desirable place to live.”

Iowa Relief is owned by Acreage Holdings, a New York-based firm that is among the few multistate medical marijuana companies. Acreage holds licenses for manufacturing centers and dispensaries in 12 states, including Iowa.

Acreage, founded in 2014 as High Street Capital, has changed both its names and its business strategy. Originally the company was a passive investor in legal cannabis enterprises. Last year it changed strategies and became the active operator of the cannabis businesses it owns.

“Our goal is to be vertically integrated in all of the states in which we operate,” Acreage CEO Kevin Murphy said in a March 13 press release. “That way we can ensure that the highest quality product gets delivered in a timely, efficient and reliable way for thousands of patients and customers across the country.”

That goal may be hard to achieve in Iowa, where state law only allows licenses for five dispensaries, all of which have been awarded.

Last month, Murphy confirmed that Acreage is planning to issue stock and become a publicly traded company later this year in Canada. Federal laws and the aggressive anti-marijuana stance of the U.S. Justice Department under Attorney General Jeff Sessions (“Good people don’t smoke marijuana,” according to Sessions) would complicate any public offering on U.S. stock exchanges. Canada, on the other hand, legalized marijuana in June.

Medical marijuana has been legal nationwide in Canada since 2001.

Iowa Relief is the second company to receive a cannabidiol manufacturing license. Last year, MedPharm received the first license, and is building a facility in Des Moines. According to the company’s application, its facility will be built at 1420 26th Avenue Court SW, and will hire eight full-time employees during its first year of operation.

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