Missouri’s inaugural medical marijuana facility application period ended recently (on August 19, 2019). Now that the smoke begins to clear from the application process, hopeful applicants can focus their energy on fostering relationships so that their businesses can launch as soon as possible. With even the earliest anticipated harvest being at least several weeks after licenses are issued in December of this year, Missouri residents can expect this new industry to begin taking shape in the early months of 2020.
The Missouri Department of Health and Senior Services (“Department” or “DHSS”) is expected to issue 348 facility licenses (60 cultivation facilities, 192 dispensaries, 86 manufacturing facilities, and 10 testing laboratory facilities). The Department has reported that over 2,100 applications were received—and this was after the Department extended the deadline 40.5 hours from 11:59 p.m. (CST) on August 17 to 4:30 p.m. (CST) on August 19. The extension was announced on August 15, just two days before the original deadline, and HeplerBroom’s cannabis law practice group has already heard rumblings about potential litigation from applicants whose information was submitted prior to the announcement.
With the time and effort (and money) spent by organizations in finalizing their applications, litigation regarding license issuance has always been a likelihood here, as it has been in other states. Applicants retained and consulted with attorneys, financial professionals, risk management companies, local law enforcement, horticulturalists, physicians, chemists, and others who could advise on key aspects of the proposed facilities and the applications. Behind the scenes, these same applicants began hiring construction firms, architects, lighting engineers, security companies, and others to assist with designing and building the facilities. A key concern looming in the background for all applicants is banking, as marijuana remains an illegal Schedule I substance under the federal Controlled Substances Act of 1970; in light of this illegality, federal laws and regulations (e.g., money laundering statutes) deter most banks from touching funds related to marijuana, lest these institutions risk losing their deposit insurance. That said, HeplerBroom has been keeping an eye on the Secure and Fair Enforcement Act (“SAFE Banking Act”), a proposed federal law that would provide a safe harbor for financial institutions that provide banking services to legal cannabis-related businesses. As of the time of this blog posting, the House bill has been placed on the Union Calendar for a vote, and the Senate bill is still in committee.
After licenses are awarded, the work for new Missouri medical marijuana facilities will be far from over. Final approval to cultivate, manufacture, dispense, test, or transport marijuana is contingent upon a commencement inspection by the DHSS to ensure the facility’s compliance with all state and local requirements. These inspections are intended to occur within one year of license issuance, and the failure to pass such an inspection could result in license revocation. The regulations promulgated by the DHSS feature specific requirements for waste disposal, inventory and quality control, storage and transportation of marijuana, product labeling and packaging, and facility security, among others, and various cities and municipalities have enacted ordinances with additional requirements.
ADDENDUM: Just hours after we posted about the developing medical marijuana industry in Missouri, the internet saw several news articles about the potential cause of respiratory illnesses allegedly related to marijuana vaping products. Two articles can be found here and here. As background, marijuana vaping products contain tetrahydrocannabinol (THC), the chemical compound found in cannabis plants. Companies extract THC oil from the plant, and the oil is then inserted into vape cartridges.
Both the New York State Health Department and the U.S. Food and Drug Administration have focused on vitamin E acetate as a potential cause of these pulmonary illnesses. Vitamin E acetate (also called tocopheryl acetate) is an oil commonly found in nutritional supplements and skin treatments, but it may become hazardous when inhaled. Because vitamin E oil is readily available and typically inexpensive, it may be used by some companies to decrease the viscosity of THC oil. Other substances including glycol, glycerin, medium-chain triglyceride oil, and terpenes are used by companies to accomplish the same goal. Although it is far from clear whether vitamin E acetate is the primary cause of these vaping-related respiratory illnesses, entities hoping to obtain medical marijuana manufacturing licenses in Missouri should be aware of the concerns surrounding this additive.