Missouri “Defies Logic & Law" in Awarding Dispensary Licenses
Sadly, the first licensing round for medical marijuana permits in Missouri was an epic fail.
192 dispensary permits were issued, but there were hundreds of appeals, several lawsuits, whistleblowers, and apparently the FBI is involved!
What was supposed to be a “blind” bid, consisting of randomly generated facility numbers [that would make sure the persons scoring the applications did not know which company they were evaluating], ended up being not-so-blind.
After the DHSS failed to find a third-party to administer the scoring of the bid, the state changed the rules, allowing the applying companies to generate their own facility numbers.
Ultimately many of the companies that did so ended up winning big. But not all applicants knew about this [quite important] change, and many of them think it was done intentionally.
“For instance, a Perryville company called Archimedes Medical Holdings LLC chose its numbers as ARCH1811 and ARCH2811. The company, which also donated to Gov. Mike Parson, received both cultivation licenses. So did FUJM LLC, another Perryville company that gave to Parson. It’s “blind” scoring identification number? FUJM1811.” (Tony Messenger).
According to the St. Louis Post-Dispatch, one applicant, Sarcoxie Nursery Cultivation Center LLC, filed a lawsuit seeking a temporary restraining order against the ongoing licensing program, including the transfer of ownership of licenses, some of which, the lawsuit alleges, were obtained by “straw” buyers. The lawsuit alleges that the current licensing process “defies logic and the law,” and it calls it “complex, opaque, inappropriate and unlawful.”
Although the state maintains that there is “nothing to see” and “any allegations to the contrary are based on a lack of understanding of the process”, there have been outside reports that the FBI is investigating several license applications.
Not only that, but the Kansas City Star reported that last week, the state auditor’s office confirmed to The Star that it had referred two whistleblower complaints to law enforcement that were specific to the operations and the application process of the medical marijuana program.
As a result, Missouri lawmakers want to drastically increase the number of medical cannabis business permits for the market, arguing the state imposed an arbitrary cap that violates free-market principles.
“When you set it up like (DHSS) has done, it sets it up for a monopoly which creates a lot of other problems,” State Rep Ben Baker - R said.
Baker attached an amendment to a pair of bills that prohibits the department from limiting the number of licenses it issues. His amendment also requires any limited liability company seeking a medical marijuana facility license to disclose its board members, managers, officer, and its operating agreement in corporate filings with the Secretary of State’s office.
Although his amendment won bipartisan support, according the The Star, some republicans argued lawmakers should allow DHSS to fully implement the program before intervening. DHSS director Randall Williams told the House Special Committee on Government Oversight earlier this year that the decision to cap the number of licenses was made to help ensure medical marijuana doesn’t end up being diverted to the black market.
In any case, both bills carrying the amendment need final approval by the Missouri House.
At this very moment, it is uncertain whether the measure will pass before Missouri’s legislative session ends this Friday at 6 p.m.
Rep. Peter Merideth said it best, “the cap was arbitrary and violates the spirit of the constitution, which was supposed to be about patient access.”
UPDATE [May 17th 2020]: the House voted in favor of an amendment that would lift the cap on medical cannabis licenses, which the Senate could vote on this week.
Cover photograph courtesy of @theybelikeris.