Minnesota’s two medical cannabis companies lost a combined $2.4 million last year, even after one turned a profit in 2017, the Twin Cities Pioneer Press reports. Leafline Labs reported a $1.8 million loss, while Minnesota Medical Solutions – which was profitable in 2017 – lost $610,000, according to documents obtained by the Pioneer Press.
According to the report, both companies invested in operation expansions last year in an effort to meet demand from the state’s 16,000 registered patients which contributed to the operating losses. According to the report, both companies plan on taking on debt in order to open four new dispensaries each throughout the state, doubling the current number.
The losses, however, are significantly less than previous years when, from 2015 to 2016, the companies lost a total of $11 million. In 2015, Leafline ran $2.5 million in the red and posted $4.7 million in losses the following year. In 2017, the company lost $5.3 million.
Minnesota Medical recorded $3 million in losses in 2015 and another $1.2 million in losses in 2016.
“To the public, it’s going to look extremely negative that we’re still posting (losses). 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.” – Leafline Labs CEO Bill Parker, to the Pioneer Press
The legislature did pass laws this year to allow the state’s medical cannabis companies to write off their business expenses, which Medical Solutions CEO Jay Westwater said would have “a significant impact” on the company’s bottom line.
State lawmakers rejected a measure this session that would have given patients access to flower products – a move that cut the average price-per-patient in half when enacted in Pennsylvania. Westwater said the company is “ready to provide that service.”
“We know from our own internal deliberations and calculations it would have significant effect on reducing costs,” Westwater said in the report. “We’re going to be advocates for our patients and make sure that if that’s the way the Legislature wants to go maybe in the next session, that we’ll make sure we can do it in as safe a way as possible.”
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