Missouri House Votes To Unveil Medical Marijuana Business Ownership Details

“This is one of those situations with strange bedfellows, folks on opposite ends of the spectrum that generally don’t agree with each other.”

By Jason Hancock, Missouri Independent

The Missouri House voted overwhelmingly Tuesday to require state regulators to disclose ownership information for businesses granted medical marijuana licenses that the state has withheld from public view.

Democratic Rep. Peter Merideth of St. Louis added the transparency requirements as an amendment to a local government bill approved by the Senate earlier this year. After a brief debate where no one spoke in opposition, the amendment was approved 128-6.

The underlying bill, which contains numerous other House amendments, was approved and now heads back to the Senate. The legislative session ends at 6 PM Friday.

Both Republican and Democratic lawmakers argued Tuesday that the Department of Health and Senior Service’s decision to deem ownership records confidential has caused problems in providing oversight of the medical marijuana program. And that problem will only get worse, they contend, if a recreational marijuana ballot measure wins voter approval this fall.

“If we have a situation where all of the entities that got licenses under this existing program have an advantage in a bigger market, we have to continue doing real oversight to make sure that they were operating properly under the existing constitutional guidelines,” Merideth said, pointing to provisions in the proposed ballot measure that ensure current medical marijuana license holders get the initial batch of recreational licenses.

Analysis by The Independent and the Missourian last year of 192 dispensary licenses issued by the state found several instances where a single entity was connected to more than five dispensary licenses.

According to the constitution, the state can’t issue more than five dispensary licenses to any entity under substantially common control, ownership or management. But because DHSS has steadfastly withheld any ownership information about license holders from public disclosure, it’s impossible to determine who owns what.

The House attempted to add the a similar transparency amendment to legislation last year but was forced to remove it under threat of veto by Gov. Mike Parson (R).

“I don’t agree with the gentleman from St. Louis City on just about anything,” said state Rep. Ben Baker, R-Neosho, said of Merideth. “But this is something where I do… It’s a good amendment that will bring a little bit more oversight and transparency to this program.”

The state has justified withholding information from public disclosure by pointing to a portion of the medical marijuana constitutional amendment adopted by voters in 2018 that says the department shall “maintain the confidentiality of reports or other information obtained from an applicant or licensee containing any individualized data, information, or records related to the licensee or its operation…”

In February, the Missouri Supreme Court ordered the state to turn over certain medical marijuana application information that it had argued was confidential to a company appealing a denied license.

Medical marijuana instantly became big business in Missouri after voters passed a constitutional amendment allowing it in 2018, and competition for licenses became fierce when the state capped the number it would issue.

The Missouri House launched an investigation into the licensing process in early 2020, fueled by widespread reports of irregularities in how license applications were scored and allegations that conflicts of interest within DHSS and a private company hired to score applications may have tainted the process.

Legislative criticism of the medical marijuana program, specifically the state’s decision to cap that number of licenses issued to grow and sell product, have bubbled up periodically throughout the session.

Meanwhile, rumblings of an FBI investigation around the medical marijuana industry have swirled.

In November 2020, the head of Missouri’s medical marijuana program testified under oath that a federal grand jury subpoena his agency received was connected to an FBI investigation in Independence.

Missouri’s medical marijuana regulators received two additional federal grand jury subpoenas in 2020, with each redacted before being turned over to the media at the request of the federal government to obfuscate the records being sought by law enforcement.

A Kansas City-area businessman testified in a deposition that he was questioned by federal law enforcement last about medical marijuana licensing in Missouri and utility contracts in Independence—an indication that a potentially wide-ranging public corruption probe may be ongoing.

“This is one of those situations with strange bedfellows, folks on opposite ends of the spectrum that generally don’t agree with each other,” Merideth said. “But we agree that this as a responsible thing to do.”

This story was first published by Missouri Independent.

Michigan Broke Marijuana Sales Record In April, State Data Shows