The Iowa Department of Public Health offered licenses to three companies to operate in five cities, including Council Bluffs.
The development sets up a dispensary to be open in Council Bluffs by December, a deadline set by state officials.
Have A Heart Compassionate Care, LLC, had to pass the state's licensing process, which included a viable business plan and security requirements.
Medical marijuana advocates, including Jason Karmini of Iowa Patients for Medical Marijuana, say its a step forward.
"I see this being significant in that it legitimizes this topic and it isn't some kind of joke or some kind of culture war," Karmini said.
But he and others still have concerns.
Access to the cities with dispensaries could be an issue for rural or disabled patients. Also, the medicine likely wont be cheap.
"Since this is not yet covered by insurance because of federal law issues, the patients are looking at the costs of simply getting it," Karmini said.
According to state records, there are already 250 patients in Iowa who have been approved for a card to receive medical marijuana.
Nearly 80 medical practitioners have been approved, as well.