As Missouri has passed the one year mark after licenses were distributed, only 15 of 60 licensed cultivators are operating, according to state reports. State law requires licensees to be operating within one year of receiving a license, but, as Medical Marijuana Program Director Lyndall Fraker told Grown In in December, extensions would be granted on a case-by-case basis.
As of this week, according to a Missouri Department of Health and Senior Services spokesperson Lisa Cox, 41 cultivators have been awarded extensions so far.
“We expect the majority of licensees that receive an extension will be operational before June of 2021,” she said. “Each licensee that receives an extension is assigned a compliance officer to monitor the licensee’s progress toward commencement.”
Cox did not explain what happened to the other four cultivation licensees, except to say, “At this time, no licenses have been revoked.”
That’s an important point, since late last week, DHSS posted a new data chart, “Medical Marijuana Facility Licenses/Certifications Surrendered vs. Deactivated”, dated January 31, 2021, that showed 9 licenses surrendered, and 14 deactivated. The chart does not specify what kind of licenses.
Numerous Missourians working on cannabis license issues seem dubious their state will see 60 cultivators up and running this summer.
If it’s taken now 13 months to get to 15 operational cultivation facilities, they are going to do the other 45 in five months. It will be interesting to see how they anticipate doing that,” said Spencer Fane’s Joe Bednar, who represents the Sarcoxie Nursery in their ongoing lawsuit against the state to lift cultivation license caps.
“The shroud of secrecy and incompeticy doesn’t permit me to have confidence in anything they say.”
“I totally think they are not capable of doing that with their current infrastructure,” said Minorities for Medical Marijuana chapter director Marne Madison. “I wish they would look into hiring people who understand the current environment. I don’t think anyone in DHSS understands cannabis logistics.”
“I think that DHSS is being patient but frankly it’s difficult to imagine why 41 people with a cultivation license are not yet operating,” said attorney Dan Viets, who chaired the 2018 legalization referendum committee, New Approach Missouri. “A lot of people have assumed that it was DHSS fault, I don’t know if that’s true. These licensees may not have the financing to move forward. Otherwise I can’t imagine why they wouldn’t be operational or close to it.”
Last week Grown In reported that many Missouri license holders are having trouble raising enough in-state capital to keep them under the state’s 51% Missourian ownership requirement.
“It doesn’t surprise me that people got licenses that don’t have the financial wherewithal to succeed. That’s the nature of our economic system in the United States. The question in this area is what is the state’s role in regulating the industry?” said Bednar.
MoCann, the Missouri cannabis trade group that represents dozens of cannabis license holders, was more sanguine.
“MoCannTrade was a little surprised to hear that 41 cultivation license holders were given extensions, but some of those delays are undoubtedly COVID-19 related. With 80,000 medical marijuana patients, 338 facility licenses issued, and $10 million in retail sales already, we think this Missouri industry is poised for significant growth in 2021.”
State regulators have not provided much guidance on what license holders should do to ensure they can get an extension. A guidance letter issued by DHSS last September focuses more on what not to do, rather than what positive actions a licensee should take.
“There’s always exceptions to these rules. There’s always exceptions. That’s really it. I’ve seen it many times,” said attorney Denise McCracken of Dogwood Advisors.
“It’s a capacity issue too. If DHSS doesn’t see a red flag, then my sense is they are not independently investigating it, and that leaves a real wedge to be taken advantage of, and that’s not fair.”