Big losses for medical ganja pot providers
Minnesota's two licensed medical marijuana manufacturers posted millions of dollars in losses in their first full year of operations, according to financial documents obtained by The Associated Press.
Minnesota Medical Solutions posted a US$3 million loss in 2015, a period that saw the rush to build up facilities, the growing and cultivating of the plants and the first six months of legal medical marijuana sales. The company also said it lost more than US$542,000 in 2014.
The other manufacturer, LeafLine Labs, lost roughly US$2.2 million in 2015. Their audit does not include information from 2014. The AP obtained copies of the documents through an open records request.
The heavy losses illustrate the difficulty of running a medical marijuana business in Minnesota's tightly regulated structure and confirm some fears among patient advocates that the program can't survive long-term.
Only 10 severe medical conditions qualify for the program intractable pain, which supporters think will greatly broaden the customer base, was only recently added and the plant form is banned. That makes Minnesota's program among the most restrictive in the 25 states with such laws on the books.
Between start-up costs associated with growing facilities and dispensary openings, the high costs of processing the plants into pill and vapour forms and the layers of required laboratory testing, manufacturers expected a rough go in the first years. Coupled with lacklustre enrolment fewer than 900 patients had signed up within the first six months of sales Minnesota Medical chief executive Kyle Kingsley called 2015 "an unusual year, and future years won't be like that."
"In year one, we needed to strike a balance between minimising expenses and building a company that would be financially sustainable over the long haul," he said in a statement.