Missouri medical cannabis business licensing: March 2019 status

With the passage of Amendment 2 by Missouri voters in November 2018, businesses will be able to apply for licenses to operate medical cannabis facilities in Missouri. While the date for businesses to apply for such licenses is still more than four months away, the timeline for starting the application process has already begun.

Basic licensing requirements

Missouri Department of Health and Senior Services (“DHSS”) has the authority to implement the requirements of Amendment 2. Any business seeking to receive a Missouri cannabis license must file the appropriate application(s) with and pay the required fees to DHSS. Business applicants, among other things, must be majority owned by a Missouri resident who has lived in the state for not less than one year and cannot be owned by or have an officer, director, board member, or employee who has been convicted of or pled guilty to a felony offense. Furthermore, no applicant (including those under substantially common control, ownership, or management) may receive more than one testing license or, in the alternative, three cultivation licenses, five dispensary licenses and three marijuana-infused product manufacturing licenses.

Licensing fees

Applying for a dispensary or marijuana-infused manufacturing facility license requires a $6,000 nonrefundable application fee. Once a license is granted, dispensary and marijuana-infused manufacturing facility licensees will pay a $10,000 annual fee per facility license. Such licenses must also be renewed every three years and must be accompanied by a $3,000 nonrefundable renewal fee.

Similarly, applications for cultivation licenses require a $10,000 nonrefundable application fee and, once a cultivation license is granted, cultivation facility licensees will pay a $25,000 annual fee per license. Cultivation Licenses must also be renewed every three years, for an additional $5,000 nonrefundable renewal fee per license.

Application and license fees are subject to change each year, based upon changes in the prior calendar year’s Consumer Price Index.

Licensing timeline

The following licensing timeline has been provided by DHSS:

Licensing figures and scoring

Amendment 2 requires that DHSS issue, at a minimum, the following licenses:

• Two testing facilities;
  
   
• 60 cultivation facilities;
  
   
• 86 marijuana-infused products manufacturing facilities; and
  
   
• 192 dispensaries (24 per congressional district).

The number of pre-filed application fees that have been paid far exceeds the minimum number of licenses that must be made available by DHSS. As of February 20, 2019, 131 cultivation facility pre-filed license application fees, 237 dispensary facility pre-filed license application fees and 66 marijuana-infused manufacturing facility pre-filed license application fees have been received by DHSS.

While draft rules have not yet been released governing the licensing process, DHSS is permitted to establish a scoring system whereby applicants can be scored based upon a number of factors, including: (i) the character, veracity, background, qualifications and experience of officers and managers, (ii) business plan (including, for cultivation and dispensary facilities, maintenance of adequate supply, safety and security of patients and the community, protections against diversion and plans to reach low-income patients), (iii) site security, (iv) experience (includes experience in the cannabis industry, as well as capacity or experience that is particular to the type of license being sought), (v) positive economic impact, (vi) maintenance of competitiveness within the market and (vii) in the case of dispensaries, the suitability of the location and accessibility for patients.

Sarah Wade is a member of Thompson Coburn’s Cannabis and Financial Services practice groups. Carl Rowley chairs the firm’s Mass Tort Practice and is a member of its Cannabis Practice.