By the end of the 2018, Davenport will be home to one of Iowa’s five medical cannabidiol dispensaries, the state Department of Public Health announced Tuesday.
Have a Heart Compassion Care, a Seattle-based cannabis retailer, won the license to operate a shop in Davenport. Company officials said they plan to renovate the former Kelly’s Irish Pub & Eatery on the west end of a retail strip center at 2222 E. 53rd St., Davenport.
“It’s really a charming community,” said Ryan Kunkel, CEO of Have a Heart, which also was selected to open a dispensary in Council Bluffs. “We’re just excited to be part of it.”
Following the health department’s announcement, an attorney representing Quad-City businessman and dispensary applicant Matt Stern filed an injunction in Polk County District Court, seeking to stop the state from issuing the Davenport license.
Stern, who owns Nature’s Treatment of Illinois, a medical cannabis shop in Milan, paid a $5,000 fee and applied to build a dispensary in Eldridge, but the health department rejected his application during the technical review stage.
“There was no evidence they had filed any paperwork with the (Iowa) Secretary of State’s office to start the registration process,” Sarah Reisetter, the deputy public health director, said. “That was a minimum eligibility requirement.”
Stern’s team submitted its certificate of organization for Nature’s Treatment of Iowa to the Secretary of State’s office on March 7, according to court documents. The health department, which closed the dispensary application window March 8, sent Nature’s Treatment of Iowa a rejection letter on March 14.
Stern appealed the state agency’s decision that same day. Also on March 14, the day its certificate of organization was filed, Nature’s Treatment of Iowa became a limited liability company, according to the Secretary of State’s website.
Reisetter said her office forwarded the firm's appeal to the Iowa Department of Inspections and Appeals. As of Tuesday, a hearing with an administrative law judge had not been scheduled.
Stern, who secured about three acres of vacant land off U.S. 61 in Eldridge for a 2,500-square-foot dispensary, said he wants his application scored.
“I figured it was an easy fix," he said.
Added Reisetter: “If an administrative law judge rules that the application was improperly rejected, reviewers will need to score the application.”
Moline attorney James Zmuda notified the health department's legal team Tuesday of his plans to appear early Wednesday in Polk County District Court on behalf of Nature’s Treatment of Iowa.
Meanwhile, MedPharm Iowa received licenses for Windsor Heights, a Des Moines suburb, and Sioux City, and Iowa Cannabis Company received a license for Waterloo.
Reisetter told The Gazette of Cedar Rapids on Tuesday that the five sites were chosen to “ensure geographic distribution” as required by law.
“Sioux City and Council Bluffs were determined necessary to provide access to patients on the western side of the state,” she said in an email. “Similarly, the Des Moines metro area was determined necessary for central Iowa and Davenport was determined necessary for Eastern Iowa. That left one license available for Iowa City/ Coralville/ Cedar Rapids/ Waterloo. Looking at the map, Waterloo was the location determined to provide the best geographical distribution of dispensary locations throughout the state.”
Twenty applications were scored by a team of reviewers based on 13 criteria that included operating documents (150 points), ownership and financial structure (125 points), dispensing (125 points), business overview and plan (100 points) and personnel background and training (100 points) for a maximum 1,000 points.
The chosen companies have until 9 a.m. Wednesday to accept licenses. Kunkel of Have a Heart Compassion Care said Tuesday he already accepted the state’s offers to develop dispensaries in Davenport and Council Bluffs. Kunkel's company, founded in 2011, owns six cannabis retail locations throughout Washington, and has plans to expand in California, Hawaii and Oregon.
While Kunkel's stores in Washington sell marijuana for medicinal and recreational use, his current goal in Iowa is to "focus on treating the patients."
"We're not interested in building a head shop," he said.
If the other companies don’t accept, the state could consider awarding a license to one of 10 other applicants, including one each for Cedar Rapids, Coralville and Iowa City, that met the 600-point minimum score required.
MedPharm Iowa met the minimum score to run a dispensary in Davenport, but the business was not awarded a license. Five applications, including Iowa Apothecarium in Davenport, did not meet the minimum score, the state reported.
MedPharm Iowa, chosen Dec. 1, 2017, as the state’s only medical cannabidiol manufacturer, must begin supplying dispensaries no later than Dec. 1, 2018, the same date dispensaries must begin selling product.
Iowa law allows license holders to sell cannabidiol, or CBD, that has a tetrahydrocannabinol, or THC, content of up to 3 percent. THC is the plant’s main psychoactive component that produces a “high.”
The state expanded its medical cannabidiol law in 2017 to allow for use beyond chronic epilepsy to illnesses including cancer, multiple sclerosis, AIDs or HIV and others.
As of March 22, a total of 327 patients and caregivers had been issued cards to purchase product, according to the health department.
(Erin Jordan of The Gazette in Cedar Rapids contributed to this report.)