Following serious allegations by state regulators, holders of four medical cannabis licenses in Missouri will be suspended and sold to new owners by December according to an agreement made between the license owners and the Missouri Department of Health and Senior Services.
Three cultivation licenses and one manufacturing license in Perryview, Mo., controlled by Archimedes Holdings and other companies, a group led by investment advisor Jason Buchheit and Blonie Dudney, a St. Louis eye doctor, were permanently suspended on June 10 for the alleged distribution of unsanitary products. The companies were ordered to destroy cannabis products at their cultivation sites under state supervision.
[Read the Archimedes-DHSS Agreement]
The DHSS alleges the licensees were operating in unsanitary conditions, including using and applying pesticides without proper training or proper personal protective equipment. As part of the agreement, the companies do not admit to any liability or wrongdoing.
Buchheit and Dudney’s companies Archimedes Medical Holdings, FUJM, and Holistic Health Capital have operated under the brand name Solhaus. None of the parties could be reached for comment by publication.
The agreement mandates the licensees must transfer operational management of the facilities to a third-party management firm by June 30. The current licensees will then have until November 30 to find a buyer and exit Missouri’s regulated medical weed industry, with no possibility of obtaining a new license in the future.
Archimedes was at the center of another legal controversy earlier this year after a lawsuit filed by Green Four Ventures, dispensaries that operate under the Clovr brand, claimed that Archimedes and four others were illegally trafficking cannabis from out of state, an accusation repeatedly denied by the defendants.
[Read the Green Four Ventures complaint against Archimedes]
“Defendants knew (or should have known) that their marijuana supply distributed from their facilities to medical marijuana manufacturers and dispensaries in Missouri were required to be cultivated in the State of Missouri, and Defendants knew (or should have known) that they were prohibited from transporting any marijuana that was not cultivated at their licensed Missouri cultivation facilities,” the suit alleges.
Green Four Ventures’ suit against Archimeded, filed in Jackson County Circuit Court alleges that $1,700,000 of product provided to its dispensaries was placed on regulatory hold last October after DHSS determined Archimedes-produced product was illegally cultivated out of state.
“As a direct and proximate result of the administrative hold, GFV lost in excess of $500,000 in revenue,” the suit alleges.Archimedes’ owners are well connected in Missouri politics. Hayley Rosenblum Dudney, one of owners and representatives of Archimedes, is the daughter of prominent St. Louis defense attorney Scott Rosenblum. Her husband Blonie Dudney, and company co-owner Jason Buchheit each contributed $5,000 to Gov. Mike Parson’s political action committee in 2019.