Tina Tan

Medical marijuana law paves way for legal growth in Missouri

By Tina Tan and Jack Anstine / October 3, 2019

Since November 2018, patients with medical conditions in Missouri are now able to legally cultivate, possess and ingest cannabis. There is some concern from lawyers and physicians about a lack of conclusive research on medical marijuana and about easy access to this new business.

Missouri prepares to weed out applicants for medical marijuana businesses

Medical marijuana facilities in Missouri expect to receive their licenses by the end of 2019. But out of over 2,000 applications submitted, the state plans to approve less than 350 licenses. Businesses that do not receive a license may the Department of Health and Senior Services to court.

“For all the people that didn’t get in, they use their money to fund the program for all the people that did get in,” said applicant John Borland, the owner of Grassroots Smoke Shop in Columbia. “I do believe there will be a lot of lawsuits that come from it.”

Applicants in other states who did not receive a medical marijuana license have set a precedent by turning to lawsuits.

“Arkansas had a similar scoring system as Missouri for all the applicants,” said Jon Gold, an attorney who practices medical marijuana business law in Springfield. “A company that did not get a license filed a lawsuit, and the Supreme Court in Arkansas said that the state unfairly chose a committee to score the applications.”

In Missouri, the application fees that help fund the program for the state aren’t cheap. “The application fees are $6,000 for a dispensary, and $6,000 for a manufacturing facility, and the cultivation facilities are a $10,000 application fee,” said Lyndall Fraker, director of the Missouri Department of Health and Senior Services (DHSS) for medical marijuana regulation.

Fraker stood by the way that DHSS handled the transition when asked about the potential of a lawsuit, saying, “We’ve done things in a very efficient professional way… we’ve certainly stayed within the confines of the law and the constitution that was given to us.”

One local applicant, Paula Schuh, believes that it’s the large corporations that are most likely to file a lawsuit, and as a result it will weed out Missouri applicants.

“If people do sue, I really can’t see individuals doing it,” Shuh said. “We knew when we signed up and gave our $6,000 that we weren’t going to get it back either way,”

Smaller companies like Borland’s Grassroots also understand the hardships of applying.

“We had two months to not just create a business plan, but create a whole company, create a whole team, find locations, you know, come up with money,” Borland said.

In addition to these required fees, some applicants also invested money into buying or renting property for potential locations, and may have even hired an attorney or consultant to guide them through the application process.

“I think somebody probably has a minimum of $30,000 tied up in the application process,” Gold said. “I've heard all the way up to half a million dollars. So, a lot of money especially if you don't get a license.”

The total number of applicants is more than twice that of the state’s initial projection of 800 to 1,000 applicants. Gold gave a simple explanation into why so many in Missouri want in.

“We have a limited number of licenses, and that makes that license more valuable because of less competition,” Gold said.

The value of a Missouri license compared to states that do not have a limit is one factor that caused this influx of applicants.

“Our neighbor to the south and west Oklahoma created a medical marijuana law 2017,” Gold said. “They don't have any maximum number of licenses. The value of the license is not as great as when we have a limited number of licenses in Missouri.”

Currently, there are seven dispensaries scheduled to open in Columbia, approximately one for every 20,000 citizens, as set by the Columbia City Council. The state is now scoring the applications to determine who will get a license. The 348 selected applicants will receive a license by the end of 2019, while those who are not accepted just might seek litigation.