Let's not forget who made Iowa's new medical cannabis law so useless

Iowa’s new medical cannabis law goes into effect on July 1, but “obtaining the medicine will be difficult and manufacturers said it’s unclear if the state’s effort will be viable,” Linley Sanders reported for the Associated Press this week. Her story illuminated a few reasons the law won’t help most of the people who could potentially benefit from access to cannabis derivatives.

Iowa lawmakers closed out the session with all-nighter so as not to adjourn without doing something on this issue. The previous medical cannabis law, adopted in similar last-minute fashion three years earlier, was due to expire this summer. Even for people with seizure disorders, the only conditions for which cannabis oil was allowed, the old law was too limited and unworkable.

As the new law’s defects become more obvious, we need to remember that most state legislators favored a better alternative. House Republicans thwarted their efforts.

Analysts for the non-partisan Legislative Services Agency provided a fiscal update on the medical cannabis law during the last week of May. The first assumption is worrying enough:

• Of the Iowa residents with eligible debilitating medical conditions as defined in the Act, an estimated 1.7% (6,022) per year may apply for a medical cannabidiol registration card. Additionally, an estimated 359 caregivers will apply for cards.

Less than 2 percent of Iowans with one of the nine qualifying conditions are expected to apply for the program. Why so low? Maybe because experts in the field know that for most of those conditions, cannabidiol with no more than 3 percent THC has no therapeutic benefits for pain, symptoms, or side effects from treatment.

Further reporting by Sanders indicates that Iowa’s enrollment projections may be “overly optimistic.”

In Minnesota, a similar medical marijuana law is nearly 2 years old but still has less than 6,000 people enrolled, said Andrew Bachman, the CEO for LeafLine Labs, one of two licensed cannabis manufacturers in Minnesota. He notes that Minnesota’s population of 5.5 million is significantly higher than Iowa’s 3.1 million, and that fewer patients could mean less revenue.

Lack of access to CBD oil was one of the biggest deficiencies in Iowa’s first law. In theory, the new law included a short-term fix. But legislative analysts noted,

• The timing and size of the workload for processing registration cards is unknown. Medical cannabidiol will not be available for purchase in Iowa until December 2018, and patients still need to discuss the option with their doctors, so applications are assumed to be, at most, 25.0% of the estimated total application pool in the first year. However, the Act also includes a provision for the Department of Public Health (DPH) to license two out-of-state medical cannabidiol dispensaries from a bordering state by December 1, 2017. Presently, no bordering state has laws that permit dispensaries to be licensed in other states.

Iowa’s law included language allowing people to access cannabis oil from Minnesota as part of a deal House Speaker Linda Upmeyer worked out with her friend Kurt Daudt, the Republican speaker of the Minnesota House. She had tried to pass a similar scheme in 2016. Daudt was hoping for a “mutually beneficial” arrangement, since Minnesota’s two licensed manufacturers of cannabis oil don’t have enough customers to make a profit.

Staff with the Minnesota House Chief Clerk’s office confirmed today that the state legislature adjourned for the year in late May without taking any action to allow residents of other states to apply for medical cannabis cards or obtain cannabidiol from Minnesota suppliers.

December 2018 is a best-case scenario for access to CBD oil produced in Iowa, assuming companies apply to manufacture and distribute the product here. Will suppliers sign up for our program? A Colorado-based cannabis distributor told the Associated Press it might be challenging for a dispensary to make a profit in Iowa with a customer base of 6,000. Democratic State Senator Joe Bolkcom said people who work in this area “know right now it’s a money-loser. […] The folks who make an investment [in Iowa], they’ll roll the dice and think they can get the law changed.”

Improving the new law will be a heavier political lift than many advocates believe, for reasons Bleeding Heartland discussed near the end of this post.

The way to make Iowa more attractive for cannabis manufacturers is straightforward:

“If you expanded the products they could offer or the range of conditions for which you could use this… that would dramatically increase the size of the market and boost profits,” said Robert Mikos, a Vanderbilt law professor who specializes in marijuana policy.

The same changes would would make the law better for Iowa patients too.

If not for Iowa House Republicans, we wouldn’t have this problem.

In 2015, almost every Iowa Senate Democrat, plus Republican Brad Zaun, approved a bill allowing most forms of medical cannabis (except for smokeable marijuana) for a dozen conditions. House Republicans let it die in committee.

In 2016, some House Republicans greatly reduced the scope of that bill and voted it out of one committee, with help from Democrats. Another powerful Republican let the watered-down version die in his committee.

Toward the end of the 2016 session, House Democrats tried to force a floor vote on the Senate’s broad medical cannabis bill. Republicans blocked their efforts, then offered a very limited bill with Upmeyer’s half-baked Minnesota plan. It lacked the votes to pass.

This year, some influential Senate Republicans, including Appropriations Committee Chair Charles Schneider and floor manager Thomas Greene, were able to get almost all of their colleagues in the upper chamber behind comprehensive medical cannabis reform. Like the 2015 Democratic legislation, this year’s bill would have allowed most cannabis derivatives, excluding smokeable marijuana. It covered more medical conditions than the bill Democrats had approved two years earlier. And it cleared the Iowa Senate with support from 45 of the 50 senators.

Quite a few Iowa House Republicans posture as supporters of medical cannabis. But none of them stepped up to make the case for the Senate bill. On the contrary, key GOP lawmakers like State Representatives Clel Baudler and Jarad Klein dismissed the Senate’s approach as too broad. They didn’t want to include so many medical conditions. They expressed concern about possible abuse of products.

Then Governor Terry Branstad and current Governor Kim Reynolds stood on the sidelines as the debate unfolded, making no effort to rally House Republicans behind the bipartisan Senate bill.

The result was the useless legislation House Republicans finalized in some back room during that last, late night of the legislative session.

A law that (unlike the Senate’s alternative) does not allow the use of cannabis for Iowans suffering from hepatitis C, glaucoma, ulcerative colitis, Ehlers-danlos syndrome, post-traumatic stress disorder, Tourette’s syndrome, muscular dystrophy, Huntington’s disease, Alzheimer’s disease, complex regional pain syndrome, rheumatoid arthritis, or polyarteritis nodosa.

A law that purports to make cannabis available for Iowans with nine medical conditions, but allows only CBD oil with a THC level too low to be therapeutic for eight of those nine conditions (cancer, multiple sclerosis, AIDS/HIV, Crohn’s disease, Amyotrophic lateral sclerosis, any terminal illness with a life expectancy under one year, Parkinson’s disease, or untreatable pain).

Admittedly, cannabidiol is effective for many people with seizure disorders. But the woman who lobbied the legislature on behalf of the Epilepsy Foundation told the Des Moines Register, “Even with epilepsy, not everybody can be treated with a medicine that has 3 percent THC.”

Not only was the House Republican approach terrible policy from a health perspective, it was fiscally irresponsible. Legislative Services Agency staff estimated,

Due to the delay in fee revenue, initial work associated with reviewing licensing, writing rules, developing databases, development of drug formularies, the providing of education and promotional materials to medical professionals and patients, costs for the DPS [Department of Public Safety] not covered by fees, and the testing of methodology development, the first-year initial funding needs are estimated at $1.5 million over the current appropriation. The second year of the Program may be fee sufficient if it launches.

A table on page 2 calculates that the Medical Cannabidiol Program will cost $1,551,000 during the year that begins on July 1. Revenues supporting the program are estimated at $207,850 during that period and could be lower if fewer Iowans than expected apply for medical cannabis cards, or if fewer companies seek to become manufacturers or dispensers.

The state doesn’t have extra money lying around. On the contrary, we’re $97 million short of the cash needed to close out the current fiscal year with a balanced budget. Iowa’s revenue outlook for next year doesn’t look much better.

Statehouse reporters generally avoid assigning blame for bad public policy outcomes, not wanting to be accused of bias. So when you read articles like this good piece by Sanders, you can’t tell why the legislature failed to enact a decent medical cannabis bill.

It’s up to us to let Iowans know what really happened. Against the wishes of almost every Democratic lawmaker and most of the GOP senators, House Republicans rejected a solid step forward in favor of the illusion of reform.

UPDATE: John Schroyer wrote an excellent piece for Marijuana Business Daily about the financial viability of Minnesota’s program.

“I really think the losses and the limited number of patients is demonstrative of overregulation, and I think we all know that the program cannot sustain itself as it is,” said Maren Joyce Schroeder, the president of marijuana advocacy group Sensible Minnesota. “No company can sustain losses like this for an extended period of time.”

Nic Easley – a national cannabis consultant and CEO of Denver-based 3C Consulting – also was pessimistic about MinnMed and LeafLine’s survival chances.

“I wouldn’t give it more than 50/50 that either one is going to be able to make it through,” he said, “unless they have significant backers and are going to be willing to bleed for that long until the medical program expands to include edibles, flower and more dispensaries.” […]

Schroeder said more problems underlie LeafLine’s and MinnMed’s finances than meet the eye, but she again emphasized the fault lies with strict state regulations that prevent the MMJ market from flourishing:

The state has just eight dispensaries, which means many patients must drive hours to get to a storefront.
Many patients can’t afford medical cannabis, given that Minnesota’s prices are among the nation’s highest.
Both companies must conform to costly regulations such as using armored cars for transporting product.

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