Missouri regulator opposes new cannabis cultivation licenses awarded to company able to raise local capital for operation

Heya Wellness is based in St. Charles, Missouri.

Last week Missouri’s Medical Marijuana Program Director Lyndall Fraker pushed back hard against the idea that his office would oppose two new cannabis cultivation licenses awarded through the state’s Administrative Hearing Commission (AHC). This week, Fraker’s office filed in court to block those new licenses. 

“I don’t know where you get your information on that one,” Fraker told this Grown In reporter who suggested that Fraker and his department might oppose the new licenses.

In February an Administrative Hearing Commissioner awarded Heya LLC two cultivation licenses for Kirksville and Excello on the grounds of scoring errors in the original application process. Heya was awarded a license for St. Ann by the Department of Health and Senior Services (DHSS) through that licensing process. The St. Ann location is one of the 17 Missouri cultivators currently certified for operation.

[Download the DHSS Petition to oppose and AHC Decision]

In January Grown In reported that many Missouri cultivation license winners have not been able to raise enough local investor capital to reach the constitutionally-mandated 51% Missouri-ownership threshold. Without that capital, cultivators have been unable to open. Heya is one of the few license holders that has demonstrated an ability to raise enough local capital to open and operate a cultivation facility.

According to the AHC decision, one argument DHSS made against awarding Heya licenses is that because it delegated scoring authority to a subcontractor, it no longer has authority to change them. The AHC decision called this “a bizarre claim”, saying, “It is cause for concern that a government agency claims it has handed over its constitutional authority to a private contractor without checks and balances.”

DHSS’ petition to overturn the AHC’s license award seems to double down on the idea that it is powerless to rescore subcontractor decisions, as it claims the AHC decision, “Is in violation of constitutional provisions,” among other reasons.

“The decision to appeal or not is decided one case at a time. After careful review, we believe this matter should be reviewed utilizing the appeals procedure and we feel confident in our position. Per capita, Missouri issued more cultivation licenses than almost every other medical marijuana state in the country, so there is no concern about meeting public demand at this time,” said Director Fraker in an emailed comment.

Asked for comment, The Missouri Medical Cannabis Trade Association declined.