Missouri spends $1.3M defending marijuana permit decisions

JEFFERSON CITY, Mo. -- Missouri regulators have spent $1.3 million to defend themselves in court against a wave of lawsuits filed by businesses that were denied medical marijuana business licenses.

Businesses that didn't receive permits from the state filed 853 appeals through the state's Administrative Hearing Commission, and 785 of those cases remained unresolved last week, said Lisa Cox, spokeswoman for the Department of Health and Senior Services, which runs the medical marijuana division.

Cox told the St. Louis Post-Dispatch the legal fees are a one-time cost associated with getting Missouri's program up and running, but critics said it is a reflection of problems in the way permits were awarded.

She said the state received 2,270 facility applications but only awarded 348 total licenses.

"The number of appeals is not an indication of flaws in the process, but rather the high number of applicants," Cox said.

Lawyer Chuck Hatfield, who represents eight businesses that appealed after not getting state licenses, said the process to review applications for medical marijuana licenses appears flawed because companies received different scores for some of their answers on the form even though they were identical to what other companies submitted.

"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."

State lawmakers are in the middle of reviewing the medical marijuana permit application process, but that investigation has been on hold for several months because of the coronavirus pandemic.

The money spent on legal bills comes from fees medical marijuana cardholders and business applicants have paid the department. Those fees, after covering the cost of running the program, are supposed to be deposited into a new Veterans' Health and Care Fund.

The medical marijuana program had generated $19 million as of December, so the legal fees represent a small portion of the money that has been raised. The health department had, as of December, spent another $3.1 million administering the program.