The Missouri Court of Appeals Orders the State to Award Medical Marijuana Cultivation Licences!
On Tuesday, the Eastern District Court of Appeals in Missouri ruled that the state must provide a medical marijuana cultivation licence to an applicant who had not been advised that a necessary piece of paperwork was missing from its application.
The case of Mo Cann Do Inc., which filed for permission to operate a marijuana farm in Cuba, is one of the few in which an appeal of a licence decision was upheld. The Department of Health and Aging Services in Missouri was ordered to grant NWGMO LLC a cultivation licence in Marceline in December 2021 by the Missouri Administrative Hearing Commission.
Many other licence choices made by the state have been challenged in court. According to department spokeswoman Lisa Cox, this is the first time a judge has compelled the department to issue a licence it had previously denied.
During the August 2019 implementation of the department’s medicinal marijuana programme, which voters had approved in November 2018, Mo Cann Do apply for a growing licence. It also applied for five permits to open dispensaries.
The application was turned down because it lacked a “certificate of good standing,” a document provided by the Secretary of State’s office that verifies the legal registration of a business. Judge James Dowd noted in the majority ruling that if the department’s denial of a licence is based on insufficient information, the department must explain in detail what information is lacking.
Because of its lack of specificity, “The DHSS cannot be allowed to contradict the clear text of its own regulation by simply sending the applicant to the applicable state regulations,” wrote Dowd.
Besides these, Mo Cann Do has applied for five dispensary licences in order to open shops in Columbia, Kansas City, Springfield, and St. Louis. Also declined were applications that did not include a certificate of good standing.
Attorney Eric Walter, who represents Mo Cann Do and is headquartered in St. Louis, was not available for comment on the ruling or the progress of additional applications Tuesday.
Cox said the government is examining its options about an appeal.
The Missouri Constitution’s medical marijuana provision mandates that at least one cultivation licence and twenty-four dispensary licences must be issued to every 100,000 people and in each congressional district, respectively. Department officials have claimed that at least 60 cultivation permits and 192 dispensaries will be in place before the programme is fully operational.
When ranked against all other applications for cultivation, Mo Cann Do ranked 62nd. Because of this, the department only gave licences to the 61st and 63rd applicants, passing over Mo Cann Do despite the fact that the state needed at least 62 dispensaries to meet the requirements set by the 2020 census.
This Tuesday, the number of licenced producers and dispensaries reached 66 and 215, respectively.
Following the denial, Mo Cann Do took the matter to the Administrative Hearing Commission and the courts of St. Louis County, both of which backed the department’s original action.
Although “This is an unfortunate case of a technical mistake,” Circuit Judge Thomas Albus ruled that “Missouri should be able to insist on technical compliance from a sophisticated applicant such as petitioner” when establishing “a far-reaching new government programme” like the medical marijuana scheme.
Whether or not the agency complied with its own standards mandating disclosure about missing elements is at issue, not whether Mo Cann Do should have noticed what was missing, Dowd wrote. Mo Cann Do was informed of three other missing items, but the certificate of good standing was not, which “impermissibly breached its own regulation which it had no jurisdiction to do.”
Licensing to cultivate, process, and sell marijuana in the state was already a rich business before recreational use was legalised, but the profits skyrocketed after the drug was open to adults.
Initially, only establishments that already held a medical licence were eligible to apply for the new, more expansive licence that would allow them to serve both the medical and recreational sectors.
Chief Judge Kelly Broniec expressed her disagreement with the majority and stated that she would have sustained the decision of the lower court.
“While being granted one of these highly coveted licences is without a doubt an extremely lucrative proposition, it is also true that this brings great responsibility, given the nature of the controlled substance involved, and the undeniable fact that there is a substantial market for licenced marijuana in Missouri,” Broniec wrote.
