Budding Minn. medical marijuana industry full of mystery

Medical marijuana in a jar
While more than 20 states — including California where this photograph was taken — have enacted laws to legalize medical marijuana use, it's not clear what kind of market there will be for the product in Minnesota.
David McNew / Getty Images 2012

Update: 5:10 p.m. | Published: 6 a.m.

A Minnesota marijuana operation may be coming soon to an industrial park or farm near you, or maybe not. Nobody knows.

LeafLine Labs
This rendering shows the building LeafLine Labs is proposing to build as part of its first phase of a proposed medical marijuana manufacturing business.
Courtesy of Ryan Cos.

The Minnesota Department of Health said Friday afternoon it had received 12 applications from "parties seeking to become medical cannabis manufacturers."

The state Health department said it aims to choose two manufacturers by Dec. 1.

Today was the deadline for those applying to be one of two licensed medical marijuana suppliers. So far, it's proving to be a process shrouded by complexity and secrecy. Two manufacturers are expected to be picked to grow the plants, process them for sale and dispense pills and oil from eight different locations around the state starting in July.

Assistant health commissioner Manny Munson-Regala
Minnesota Department of Health assistant commissioner Manny Munson-Regala.
Tim Nelson / MPR News

It's not even clear what kind of market there will be for medical marijuana in Minnesota.

Officials think there may be as many as 5,000 customers, but concede that's only a guess. The state thinks they might be paying about $400 a month each, but that's only a guess, too. That would make it about a $24 million a year industry. But the health department concedes it could be off by multiples of three or four.

The Minnesota Department of Health may add new medical uses — like treating intractable pain — that would expand the market to more people. Colorado, on the other hand, eventually liberalized its laws to the point that it allowed residents to grow pot at home, another potential wrinkle for commercial growers.

Peter Bachman
Peter Bachman of Leafline on Wednesday, Sept. 17, 2014.
Peter Cox / MPR News

The state's received 29 letters of intent to grow and it'll be interesting to see how many follow through with a full application, said Manny Munson-Regala, the assistant state health commissioner overseeing the state's new medical marijuana program. Full application requires would-be growers to pay a $20,000 non-refundable fee. That's among the fine print included when lawmakers legalized a highly restricted and tightly regulated marijuana industry this spring.

So far, only a handful of potential participants have raised their hand in public. A retired veterinarian in Willmar, Minnesota, has a former lab he'd like to use. Some of the family that owns the Bachman's floral and plant empire may make a bid for metro operation. Peter Bachman talked about his effort, LeafLine Labs, to city officials in Cottage Grove last month.

"We're looking forward to being very good corporate citizens in Cottage Grove and contributing to the community," he said. "We will be bringing 100 to 150 construction jobs in a conservative estimate and an estimated 35 full time jobs in year one and 150 by year three.

Jake Chernugal
Jake Chernugal is part of the group looking to establish a medical marijuana manufacturer in the Bemidji area.
John Enger / MPR News

The company has partnered with a medical marijuana manufacturer from Connecticut to make its bid, but Bachman and a LeafLine spokesman declined to answer any questions about the operation.

In Bemidji, Minnesota, the Headwaters Health Center Medical Cannabis Manufacturers are similarly circumspect about the hydroponic growing operation they're thinking about for northern Minnesota.

"Because the process is so competitive, we really can't get into exact detail of who's involved," said Jake Chernugal a spokesman for the group, which includes partners in Colorado, California and Florida.

"Other manufacturers could be fishing for people to bring onto their team, onto their group," he added. "A lot of the people, when we went about this, we really decided we would keep a lot of behind the scenes players kind of just that, behind the scenes."

So will Minnesotans get to see the applications before the state chooses? No. State law makes them non-public until a manufacturer is licensed. For now, that's a secret, too.

Read: The application for a conditional use permit and a site plan review submitted by LeafLine Labs to the city of Cottage Grove. The 73-page document describes what LeafLine wants to build, although it doesn't say much about the operation.

Listen: Peter Bachman on why he's investing in the idea of medical marijuana:

Listen: Jake Chernugal on why he came around to accepting medical marijuana:

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