As predictably as sunrisein the east and snowfall in January, where cannabis goes, controversy follows.
January saw Missouri health authorities move through a six-weekprocess of announcing the winners of hundreds ofmedical marijuana business permits. The state licensescoveractivities like retail sales, weed cultivation, edibles manufacturing and safety testing. (Seed-to-sale tracking licences are expected to go out Jan. 31.)
With the ratio of applicants to licenses at 6 to 1, dashed hopes were inevitable.
So were lawsuits. Dueling open letters. Press releases. Administrative appeals.
It's been this way pretty much everywhere in the country. WhenAmerican self-government brings about medicalor recreational marijuana — almost always through voter-approved measures rather than legislatures — disagreements over who should get to sell legal weed, and where, quickly emerge.
Stateline, a journalism project by the Pew Charitable Trusts, reported in 2016 that U.S. states "struggle" to find a fair way to allocatecannabis licenses.
In Arizona, for example, authorities resorted to a Powerball-like lottery — complete with an air tank — to randomly select dispensary licensees.
Florida proposed something similar back in2014, Stateline reported. Florida got sued.
What's the fuss about?
In a word, money.Boosters of Missouri's medical marijuana system tout a potential marketplace worth $100 million.
Whether that exact dollar figure becomes a realityis unclear. But roughly30,000 patients have been approved since June 29, when Missourians were allowed to begin applying for state-approved medical marijuana cards.
As it brought 1,000 patients per week into the newly legal fold,the Show-Me State medical marijuana program has already registered significantly more patients — and thus, a bigger market base — than predicted by a University of Missouri study published in April.
A Mizzou economist and his team, crunching data from 19 rapidly evolving legal-weed states (there are now 33, of which 11 allowlegal marijuana for any adult 21 and older) predicted only26,000 Missouri patients would come online by 2022.
Meanwhile, medical weed may be increasingly oh-so-passé, at least in the minds of the pro-marijuana camp.
Data journalism siteVox reportedthatrecreational weed could end up on the ballot this year in Arizona, Arkansas, Missouri (four petitions were approved for circulation; backers would need to collect roughly 160,000 signatures in the next few months to advance their cause to voters), Montana, New Jersey, North Dakota, Oklahoma and South Dakota.
Idaho, Mississippi, Nebraska and South Dakota could vote on medical marijuana in 2020, Vox reported.
Like a syndicated TV show expanding to ever more local stations, legal weed keeps gaining potential users. An April poll showed two-thirds of Americans believe medical marijuana should be available to adults, USA TODAY reported.
Overall, legal cannabis in America represented a $13.6 billion market in 2019, according to D.C.-based forecasting firm New Frontier Data. The market was on track to grow by almost one-third last year. New Frontier forecastthat both the legal and the medical markets could double by 2025, representing $29.7 billion in activity.
And the company doesn't expect people without a legal card or a pathway to legal recreational weed to quit hitting up their street dealer on Snapchat for a baggie with a few grams: The marijuana black market could lose $7 billion in value over the next five years, but it will still likely be worth more than $57 billion at that time.
Impacts on patients, applicants
Missouri, at least for now, remains a medical cannabis state.
Pro-cannabis types laud marijuana for its capacity to manage pain, wean people from opioidsand improve life for people with terminal disease. But due to federal prohibition, little traditional scientific research on cannabis as medicine has been done in the United States, so many of these claims rely on experiential ideasmore than empirical study.
Meanwhile, the people who want to get into the medical marijuana business frequently place patient care at the center of their preoccupations, according to their public statements.
Desmond Morris is one such person.
He owns Wholesome Bud Company, headquartered in a modest northeast Springfield office where theserial entrepreneur also runs Pride Auto Detailing, a company he started several years ago.
"The patient is going to be most impacted by this," he told the News-Leader on Jan. 13.
The day after Christmas, Morris's company was denied a cultivation license — like every other would-be commercial growerin Springfield.
On Jan. 10, they were denied a license to make products like edibles and vape cartridges.
On Thursday, they were denied a dispensary license.
"We are veryshocked," Morris said three days after the second denial. "We are stunned."
He said that at moments, he felt "almost depressed" by his company's experience in the licensing process. After more than a year of effort, Morris felt he let down other people from minority backgrounds.He prayed over the situation.
What happened?
"I’m feeling like the goalposts got moved," Morris said, referring to some of the regulations and application criteria issued by the Missouri health department as it administers the state's constitutionally mandated program. "Not on purpose, but whenever people do things, they make mistakes. When groups do things, they make mistakes."
The dimensions of what Morris regards as "mistakes" aren't just personal or patient-centered. They're also economic.
"This entire community has been robbed of the chance to work in a cultivation facility," he said. "I mean Springfield, the third-largest city here."
Applicants who receive a denial might be able to take their case before the MissouriAdministrative Hearing Commission, a body intended to serve as an intermediary between the public andstate government "to avoid situations where a state agency acts as investigator, prosecutor, and decision-maker."
Morris said on Jan. 13 thathe was looking into that possibility, a choice that must be made within 30 days of a denial.
"I do think that we’re going to do the administrative appeal first, and see what happens with that," he said.
"I’m trying to look at precedents from other states," he added. "This is not the first example of states messing up certain aspects of scoring, and I’m trying to see what other states have done."
Pulling out paperwork he received from the state, Morrisshowed the News-Leader instances where he and his team of staff and consultants filed responses to application questions on topics like security, business plan orexperience in a legal market.
He said Wholesome Bud's responses were identical across the different applications for cultivation and manufacturing — but the scores marked by a third-party company based in Nevada, Wise Health Solutions, varied dramatically.
"Why I am getting a 4 here and a 10 here?" Morris asked rhetorically. "Why am I getting a 0 here and a 10 here?"
Scoring complaints have been a common theme among weed business applicants. On Jan. 9, the day before product manufacturing licenses went out, the Missouri Medical Cannabis Trade Association, or MoCannTrade, sent an open letter to Missouri's director of medical marijuana, Marshfield native Lyndall Fraker.
The trade association's executive director wrote that the group felt it had a duty to "speak up when possible systemic problems impacting the whole industry arise, including those in the scoring process."
At issue, Question 47 on the application: "What is your marketing plan, including to whom, method of delivery, and costs?" MoCannTrade said two-thirds of applicants for commercial grow licenses scored0 on the question.
Some won licenses. Some didn't.
On Jan. 17, Fraker, the head of the state medical marijuana program, sent an open letter in response. "We have gone to great lengths to design and implement a process to ensure the legitimacy and security of the blind scoring process," he wrote, reassuring the cannabis industry that the independent blind-scoring company used by state authorities employed people with master's degrees, law degrees and PhDs, and that all 578 cultivation applications were scored by the same person, to ensureconsistency.
Morris, at first depressed by bad news, was undeterred by the time he spoke to the News-Leader.
"If we don’t have the result that we’re looking for from the administrative appeal, we are going to keep going," he said. "I’m going to keep going, all the way that I can."
Applicant: 'We are veryconcerned'
In other states, applicants have also gone beyond administrative appeal. They'velawyered up and sued the government when marijuana decision-makers didn't decide in a way that suited them.
For example, last fall, two suburban Chicago grow operations in neighboring townsduked it out in front of a judge because acompany in Zion, Illinois asserted that a company in Aurora, Illinois was too close to a residential area to comply with state law. In 2017, the Chicago Tribune reported, a judge sided with Team Zion; then Team Aurora appealed.
In Missouri, there is a case pending in which a potential cannabis business tangled with the city of Independence, in suburban Kansas City, over the distance between a would-be dispensary location from residential space. A judge issued a temporary restraining order last week delaying any denial by DHSS of a dispensary application from HCKC LLC on a zoning basisuntil at least 5 p.m. Jan. 27, according to online court records.
Meanwhile, east of Joplin, a southwest Missouri family filed suit Dec. 30. Paul Callicoat, a retired cardiologist;along with his wife, Wendy, a former health care administrator;and their son, Jonathon, a botanist, had extensive plans to revive the old Sarcoxie Nursery. It once grew flowers like irises and peonies.
They hadhoped to grow cannabis, process it into products and sell it. But like Morris, the Springfield entrepreneur, the Callicoat family was denied licenses forcultivation, manufacturing and dispensary.
Unlike Morris, the Callicoats applied to run four dispensaries: one in Joplin, one in Monett, and two in Kansas City.
The Callicoats have waged a sophisticated PR campaign, rapidly sending out press releasesat key points of their quest to join the Missouri marijuana marketplace.
In an interview with the News-Leader conducted on Jan. 10, in-between cultivation and manufacturingdenials, Paul Callicoat was not optimistic about his chances in terms of application scoring.
"We certainly don'tsee a reason to expect a different outcome at this point," he said.
Callicoat objected to scoring bonuses awarded to applicants located in economically distressed ZIPcodes.
"We thinkthe scoring system was arbitrarily changed to an unconstitutional format that will award bonus points to be located in acertain ZIPcode," he said.
"We just feel that was arbitrary," he said. He took issue with the age of the data used by the department to consider unemployment rates in different parts of Missouri, for example.
"Why not use something more useful, like school lunches?" he asked, a reference to the portion of students who receive free or reduced-price meals.
"Sarcoxie — I don't think you could go through Sarcoxie and say that we're not going to economically enhance aneconomically struggling city," Callicoat told the News-Leader.
Noting that 10 to 12 paid workers were engaged at the nursery each day, buying items like gas and hardwood, Callicoat added,"I would almost argue that we may be the only applicant that is already enhancing our local area."
"We’re afraid this is going to undermine what the public thinks of the integrity of the scoring," Callicoat said. "We are veryconcerned with integrity of the scoring."
The News-Leader reached out to DHSS late Friday, and a spokeswoman said the recent open letter by Fraker to trade association members on scoring best represented the department's commitment to fairness in scoring marijuana business applications.
The Callicoats' next day in court is Feb. 19, according to online records.
At least one other suit —pertaining to a St. Louis location —has been filed, according to public records.
Other Missouri entrepreneurs,like Medigro principal Brian Atchley, expect to go to court as well.
"We will file our civil suit in Missouri," Atchley said via email on Wednesday. "I am interested in bringing our attorney to a workshop with other attorneys so we can share our information and each plaintiff can really focus on their strategy."
Late Friday,DHSS chief spokesperson Lisa Cox confirmed that defending lawsuits against the Missouri health department will be paid for by the same state fund that contains the money generated by cannabis activity that is intended to go toward military veteran care, according to the Missouri constitutional amendment that establishes the medical marijuana program.
"Article 14 provides that the Fund should be used for the department to carry out the provisions of Article 14, and there is no exception for the litigation costs related to carrying out those provisions," Cox said in a text message.
