Missouri’s top cannabis regulator, Lyndall Fraker, says they don’t have plans yet for when and how they will reissue the 29 medical marijuana licenses deactivated so far, and that his department has not decided yet whether or not they will challenge the two new cultivation licenses issued earlier this year through the Administrative Hearing Commission. In this quarterly one-on-one interview with Grown In, Fraker called in from his pick up truck just after getting his morning coffee.
[Interview edited for grammar and clarity.]
Grown In: Last week you released a list of 29 deactivated licenses. You haven’t made any announcements for newly awarded licenses. Can you give me an idea of when we should expect that?
Lyndall Fraker: No, not really. We’re still working through those issues. Certainly we want to make sure that we maintain the minimum quantities that the Constitution calls for. But, you know, there’s various factors involved. They’re settling appeals or census increases whatever it might be.
So, we don’t have that information ready to share. And we don’t actually have that information really yet. So, we’ll be certainly doing it as quickly as we can. After all the i’s are dotted and the t’s are crossed. And our legal team is heavily involved in that which I’m not involved in those daily discussions.
Grown In: Nine of the licenses were revoked. Can you tell us why they were revoked?
Fraker: I really don’t have that information handy with me right now. I apologize. I just don’t.
Grown In: So, when we talked in early December, you were aiming for 20 operating cultivators by the end of the year. But as of now, we’re at 17. Can you give us a sense of what the hold up is?
Fraker: Sure, I can do that. I’ve been traveling the state and we’ve been trying to get into all the facilities that are open. The common theme that we’ve heard with facilities…Again, we’ve been in facilities that are open. But even with their summary of what’s occurred, they certainly were held up due to Covid. Now, that didn’t necessarily hold our department up.
But issues such as equipment that was ordered from overseas. In many cases, especially in the manufacturing end. We heard stories about building regulations in certain communities where the zoning regulations, zoning departments were delaying them for various reasons. Maybe they weren’t having regular meetings back earlier in the summer last year. But that’s a very common theme to hear them say that we were delayed due to the pandemic.
Grown In: We’ve been told by multiple financiers and owners that getting 51% Missourian equity ownership for cultivators has been very difficult and that’s why there are so few operating cultivators. Would you consider seeking to lift the 51% requirement in the Constitution?
Fraker: Well, we cannot do that. The constitution has to be voted on by the voters, so it would have to go back to the voters for any change in the amendment itself. All we can work on or modify would be the rules that we drafted.
I believe over time those numbers will fill in. I know there are numerous delays and variance requests that we’ve approved that maybe they did have some of those issues last year. But now they’re underway and moving forward and have worked out some of those financial arrangements. I certainly would agree with you that that was certainly another one of those, you might say, Covid-related delays. In many cases, they thought they had investors lined up. And, you know, back last spring when with the covered situation there were investors have pulled back because the fear of whatever was gonna happen with the economy or whatever,
Grown In: The average price, according to folks we’ve spoken to in the industry, of wholesale cannabis is hovering around $4,500 a pound in Missouri. That’s comparatively high to other states, although the market is just getting started. Do you believe this price presents accessibility issues to patients?
Fraker: Well, I’m not an expert there because I wasn’t involved in other states. But from what folks that have experience in the industry in other states, and that may be now getting involved in our industry, they all tell us that that price will come down as more facilities come online as these grows begin harvesting and the supply certainly reaches more of a demand cycle.
I can tell you this: That the product out there, I believe that we have in Missouri, and then even in visiting with our testing facilities. We have four now, and I just visited two yesterday and the day before, to the newest ones that came online. I believe our product is going to be safer and much more, people will feel much more comfortable with the product in Missouri than some other states, For example, Oklahoma, where testing wasn’t even required until recently. They’ve added a few things, I think, in the rules, But initially they didn’t even require testing.
We know that, we had a very robust black market in Missouri, and I’m sure there are still people utilizing that. The home grow piece is pretty strong, initially with the amount of homegrow licenses that were purchased. So, I think accessibility is out there now, it’s available. We have 60 dispensaries around, scattered around the state now, up and running, which is about 28% of the total dispensaries that we’ll have.
And if you do the numbers, at 82,000 patients, actually about 81,000 patients, I think yesterday, percentage wise, we are fairly even now, with patients to facilities that it would take to be able to serve those patients if they were at maximum capacity. So, we’re gaining very fast on that supply and demand issue. And, about probably 60 to 90 more days, you’re gonna see that stabilized. And I think the price will come down.
We saw some retail product yesterday in the dispensary that was cheaper than I’ve seen anywhere else around the state in my travels. So, we already know that that’s starting to move a little bit.
Grown In: Last December, you said most of the license extensions would last until June. What sort of support and oversight is the state conducting to make sure these cultivators get online by the deadline?
Fraker: I think our team is working very robustly, for lack of a better word, to make sure that people are doing what they said they would do. The pandemic was one thing. Various delays. But we’re trying to hold people accountable to that initial, that initial variance request that we issued or allow them to have. You know, we want to be good partners in this industry. We certainly know that there’s reasons.
I’m a home builder by trade. And I know people that intend to build a home in four months, and it may end up taking them eight months just because of various factors. So, we understand that even when it comes to the build out of some of the subcontractors that are extremely busy, delays with materials, and what have you. Quaker windows are built right here in Missouri. And if you want to order Quaker windows right now, you’re looking at 6 to 8 weeks just to get a window. Normally you could get them in a week, you know?
So, we want to make sure we can get the industry up as quickly as possible. Our first license was issued about 15 months ago, and we have 99 facilities as of today, operating in 15 months. I think that’s pretty good.
Grown In: Do you have any concerns about last June’s Supreme Court indirect guidance for cannabis businesses? That could apply to the DHSS general counsel too.
Fraker: You know, I really don’t have an opinion on that. Certainly, I’m aware of it, and I heard a story about it, but there hasn’t been much discussion in my circle of influence. So, I really don’t have an opinion.
It appears as though we’re the 33rd state and it evidently hasn’t been an issue for any of the states before us. So, I don’t I don’t worry too much about it at this point.
Grown In: I understand your department plans to fight the two cultivation licenses awarded by the administrative Hearing Commission. Current cultivator licenses are not able to get up and running. So why would you oppose a new, legally obtained license from someone that might have the means to operate?
Fraker: Well, I don’t know where you get your information on that one, with all respect, but we haven’t made that decision, to my knowledge. And, because of that, I don’t have any further comments on that issue.
Grown In: So, you have not made a decision that you’re going to fight those newly awarded licenses?
Fraker: No, we have not yet.