Missouri Court Dismisses Lawsuit Challenging Medical Marijuana Licensing Caps

“Appellants have failed to demonstrate that those regulations are arbitrary or capricious, or that they lack a rational relationship to the important governmental interests of ensuring reasonable patient access…”

By Jason Hancock, Missouri Independent

Missouri’s constitution gave state regulators the authority to limit the number of licenses issued to grow and sell medical marijuana, the Missouri Court of Appeals for the Western District ruled Tuesday.

The Callicoats, a family from Sarcoxie, Missouri, sued the state in 2020 after their license to open a cultivation facility was denied. The lawsuit contended that the limit on the number of medical marijuana licenses and a “geographic bonus” that favored applicants in high-unemployment ZIP codes were unconstitutional, citing the state’s right to farm amendment.

Those arguments were rejected by a Cole County judge, and were similarly dismissed Tuesday by the appeals court, which determined the constitutional amendment approved by voters in 2018 that legalized medical marijuana specifically authorized license caps.

“Appellants have failed to demonstrate that those regulations are arbitrary or capricious, or that they lack a rational relationship to the important governmental interests of ensuring reasonable patient access to medical marijuana, preventing criminal trafficking in marijuana for non-medical uses, and ensuring the health and safety of Missourians,” the court’s opinion says.

There were 582 applicants for a cultivation license, 1,218 for a dispensary license and 430 for an infused-product manufacturing license. The state initially issued 60 cultivation licenses, 192 dispensary licenses and 86 manufacturing licenses.

Those caps have become a point of controversy, with critics arguing that caps tilted the process toward monied interests and created the appearance of corruption. Those concerns have been stoked by rumblings of an FBI investigation and revelations of problems with the scoring process set up to decide who received a license.

The medical marijuana industry is bankrolling an initiative petition campaign aimed at putting a constitutional amendment legalizing recreational marijuana on the November ballot. The proposal would leave the state’s ability to set license caps in place and ensure current license holders get the initial batch of recreational licenses.

That’s reinvigorated the legislative push to eliminate license caps, most notably through a proposed marijuana legalization bill sponsored by Republican Rep. Ron Hicks. But on Monday, Hicks claimed stall tactics by his GOP colleagues and support for caps by House Majority Leader Dean Plocher may ultimately doom his legislation.

One of the medical marijuana industry’s top legislative priorities is a bill that would lift a prohibition on licensed medical marijuana companies deducting business expenses on their taxes. The proposal passed last year as part of a larger bill but was vetoed by Gov. Mike Parson (R) over an unrelated provision.

Last week, a House committee added an amendment to the marijuana tax bill that would outlaw license caps and require the state to issue a license to any applicant who qualified.

This story was first published by Missouri Independent.

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