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Marijuana Lawsuits Cost Missouri $1.3 Million With No Medical Sales Yet

The money was supposed to fund veteran programs but instead Missouri is burning through cash to defend itself in court.

In 2018, Missouri voters approved a ballot measure to legalize medical marijuana in the state. Two years later and licensed sales have yet to occur. Instead, businesses that applied for a license and were rejected have filed more than 800 lawsuits against Missouri. To date, 785 of the cases remain unresolved.

Missouri regulators have spent $1.3 million in court fees defending themselves against the 853 appeals filed. Lisa Cox, the Department of Health and Senior Services (DHSS) spokeswoman, said these were a one-time fee associated with getting the program off its feet. There were 2,270 facility applications sent to the state, but only 348 licenses were awarded.

“The number of appeals is not an indication of flaws in the process, but rather the high number of applicants,” Cox told The St. Louis Dispatch.

Funds generated from the program support operating and administrative costs. Whatever is left over gets deposited into a newly created Veterans’ Health and Care Fund. Although business application and medical card fees produced $19 million as of December 2019, the Missouri Veterans Commission, which determines how to spend allocations, has yet to receive a penny. However, a state release announced the DHSS had transferred $2.1 million to the Veterans’ Fund over the weekend.

Critics argue those legal costs defending the lawsuits, which constitute about 7% of the total medical marijuana program fund to date, amount to wasted dollars that should’ve gone to the Veterans Commission instead.

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Chuck Hatfield is a lawyer representing eight different clients who filed the lawsuits. He compared scoring documents from approved applications and those that were declined. They delivered similar answers, but a third-party agency rated his clients’ applications lower. The lawsuits are about understanding why.

“They answered verbatim the way other applicants answered, because a lot of the applicants shared common consultants on certain issues,” Hatfield said. “And so our answers are identical to the word, to the way other applicants answered, and yet we got a different score.”

Representatives state medical marijuana sales should begin this month, should everything go according to plan. But worries over supply chains and testing protocols remain.

“The biggest challenge that we’re seeing now is the ability to have product for those dispensaries,” said CAMP Cannabis president Susan Griffith.

“We also have to factor in testing facilities as well as transportation [licenses],” she added. “There are a lot of different license types that are all under their own timelines to get operational. At the end of the day, we’re going to need all of them to be able to get dispensaries their product.”

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