ST. PAUL, Minn. (AP) — Minnesota's two medical marijuana providers lost a combined $2.4 million in 2018, continuing the losses that have marked the state's program since it began.
But top executives of both companies told the St. Paul Pioneer Press for a story published Tuesday that they see reason for optimism. They point to changes approved in the recent legislative session that will make it easier for them to do business. Leafline Labs and Minnesota Medical Solutions can now write off their business expenses, buy hemp from local farmers and open four new dispensaries apiece around the state, among other changes.
Leafline Labs, which has never had a profitable year, reported a net income loss of $1.8 million in 2018, according to financial documents obtained by the Pioneer Press. Minnesota Medical Solutions, which turned its first profit in 2017, fell back into the red with a $610,000 loss last year. The two expanded their operations last year to meet growing demand from the more than 16,000 patients enrolled in the program. The debt they took on contributed to their losses.
"To the public, it's going to look extremely negative that we're still posting (losses)," said Leafline Labs CEO Bill Parker. "I think what is a positive sign is how much we've decreased that loss compared to previous years. . We have righted that financial ship and we are heading in the correct direction."
Minnesota Medical Solutions CEO Jay Westwater said the tax write-offs approved by the Legislature will have a "significant impact on our bottom line," and the hemp purchases will help the companies make medicine at a lower cost.
While those changes will aid the manufacturers, the executives acknowledged they may have little effect on the price patients pay for the processed marijuana pills and oils they make. Only patients with one of 13 severe conditions can use the drugs, which can cost hundreds of dollars per month and aren't covered by insurance. A proposal that would have legalized the raw marijuana plant for medicinal use, which would significantly reduce costs to patients, was shot down in the session.
Information from: St. Paul Pioneer Press, http://www.twincities.com