Missouri medical cannabis regulators have a very tight focus, specifically to make sure existing licenses are up and running, and to ensure produced product is well regulated, according to the state’s Medical Marijuana Program Director, Lyndall Fraker. Other concerns such as the encroachment of delta-8 sales, potentially high legal cannabis prices pushing customers to the underground market, are not his purview, he says in an interview with Grown In.
And while over 500 license appeals are still languishing in the state’s judicial system, over two years since medical marijuana licenses were first awarded, Fraker denies the state is purposefully slow-walking those appeals.
This interview was edited for grammar and clarity.
Grown In: If you’re evaluating the success of your program, what do you say are your key metrics for success?
Lyndall Fraker: I think the patient accessibility that we have been able to provide in a very reasonable time, the fifth fastest state to get product to the patients. We’re talking medical states here. The fact that we have more well regulated tested product available, facility-wise than any other state except Oklahoma, medical only. We’re very proud of our program, the way we set it up and implemented it. The team, and quite frankly the operators have been great partners in this endeavor to get things working as quickly as smooth as possible.
Grown In: You still have 20 facilities, most of which are cultivators, that are not operating. For well over a year you’ve been threatening to revoke those licenses and to reassign them. So, when does that happen?
Fraker: We have 16 cultivation facilities that are not operating yet. I can tell you that the majority of those are scheduled to be approved. In, you might say a few weeks, maybe a month or two in some cases. The majority are online and on track.
I think, not to be arbitrary on the word “threaten”, I think that’s a little strong. When you I did a story maybe back in July, or one of the journalists, and at that time there was a goal of September to get facilities up and running and here we are February.
There’s been numerous reasons for delays. One reason is supply issues for most of the facilities. I know to get HVAC units has taken months. I ordered Quaker windows for my house that I’m building it took me five months to get them, and they’re built right here in Missouri, because the product that it takes to build the windows are from overseas.
I think supply issues has been one of the biggest reasons. We want to make sure that we give everyone the greatest chance to be successful and that’s our goal. As I said, we have really good operators. I think, as I said, you’ll see the majority of those facilities will be up and running.
Grown In: While cultivators are coming on line, wholesale flower prices have continued to hover over $3,000/lb, which is a pretty high number. Anecdotally, I’m hearing from consumers that this price is high enough to drive consumers to the underground market. Is this a concern for you as a regulator?
Fraker: We certainly don’t want to see the underground market thrive or get any worse than it is. We know the State of Missouri was a $500 million black market industry before our program. And we’ve done $241 million in sales so far. I’m pretty confident we cut into that market with well regulated and well tested product.
But if you go out and talk to the operators, they would tell you they’ve seen the price continue to drop as they purchase product and as they sell product. When I’m out touring stores, a year ago, we would see the price of an eighth or an ounce be at $60 almost every time we went in a facility. Now you see an eighth out there for $30-$35. Not always.
I think the supply and demand will catch up with each other. Even though we have 46 facilities cultivating, probably maybe 30 of them are actually harvesting. There are some that are in that first growth period. And there were many facilities that came on line this fall, so you should see another surge of harvest coming in here the next few weeks as well.
They tell me the product and supply has not been an issue so far as being able to get product. And that should catch up on the pricing, I believe.
Grown In: That is a feedback loop though. You don’t have a whole lot of producers working close to full bore, and if prices are high, you’re not necessarily drawing a lot more consumers. You could be drawing more consumers if prices are lower. Do you see a role as a regulator to find ways to help increase supply so that prices go down?
Fraker: I think our goal is to get all the facilities up and going and producing and harvesting and making sure the accessibility is there for patients.
We’ve met those patient goals that we were initially told by other states that it would be a two to three percent adoption rate. We’re right there. Around 2% now, we’ll be around 3% by the first of July. That would be the three year mark for patient cards and applications received. I think we’re right on track where they told us we would be with the patients and consumer use.
So, again I think we’re on track for what was estimated from the beginning.
Grown In: Related to that, delta-8 shops are all over Missouri, you see billboards for them wherever you drive, and it’s hard for law enforcement to tell the difference between delta-8 product and delta-9 product. Are you concerned that delta-8 is just another way for the underground to operate in a gray zone?
Fraker: Well, I do think that delta-8 is something that’s out there that will have to be addressed at some point. Unfortunately Article XIV does not give us the authority to do that. And you know that. Until it does, we don’t have a lot to be able to say or do about that. Should the legislature take that up, or something like that, then we’ll certainly be willing if it ends up under our purview. But right now our hands are kinda tied on it.
Grown In: So you don’t know of any mechanisms where the state could potentially regulate delta-8?
Fraker: Well, CBD or hemp products are certainly under the purview of the Department of Agriculture, that might be a question you might ask them. But we don’t have that authority at this time.
Grown In: So far the department has been fighting license lawsuits pretty hard, tooth and nail, and you’ve been losing quite a few of them, for instance the Supreme Court decision that was handed down a couple days ago. What is the department’s policy on fighting license lawsuits?
Fraker: First of all, I don’t want dispute your comment, But I don’t think we’ve lost quite a few of them. There’s been 3 or 4 AHC [Administrative Hearing Commission] cases where the things may have been against us, but when you look at all of the appeals that have been filed, there’s been 350 or so that have been settled dropped or ruled in our favor, out of the 858, I believe. We’re around 500 or so that are left.
So far the issue has been specific to scoring, the ruling that came out this week from the Supreme Court this week was specific to scoring, and we recognize that. We’re fine with that ruling. We got clarity on what Article XIV told us how we had to operate in that area.
I think, again you’re going to continue to see the appeals dwindle, and we’ll get that part of the program behind us, hopefully sooner rather than later.
Grown In: Is the department purposely attempting to slow down access to licenses? You have been working very hard to fight them, rather than settle them or find ways to award new licenses.
Fraker: We have been working with many of them. That’s why we went from 858 to a little over 500. Our legal team is working hard every day. Again, I think we’re making progress, our goal is to keep a well regulated program that we can keep our arms around. The one that provides access to patients. That’s what we’re trying to do.
Grown In: Do you have any personal stories about how medical marijuana may have positively impacted anyone you know or have met? Can you share that story?
Fraker: Honestly, Mike, I don’t have anyone close to me, family-wise or anything like that, yet. I certainly would expect to some day, maybe myself, who knows. It is an alternative and operation out there for people. We’ve heard numerous stories as we go into facilities, numerous stories about veterans, things like that that maybe are pleased that they have an option now, an alternative. But nothing specific comes to my mind. I’m sure if you asked some of those operators they can give you all kinds of stories.
