State issues letter on legality of dispensary operations and promotions
The State sent a guidance email to Missouri facility license operators detailing two potential “misunderstandings” pertaining to dispensary operations last week.
The two issues addressed by the notice, the use of third-party vendors and how dispensaries are receiving orders, and an existing rule that prohibits marijuana sales as part of promotions and promotional events.
In the letter DHSS Medical Marijuana Regulatory Program Facility License & Compliance Director, Andrea Balkenbush, writes, “The Department has become aware of several dispensary facilities that are utilizing a third party for online ordering. The Department has also been made aware on numerous occasions recently of dispensaries that are disbursing medical marijuana as part of a promotional events,” before citing statute regarding both statements. The full email to Missouri licensees can be found below.
The email was sent Friday, July 9, at 4:45 p.m.
Greenway has heard reports that the Department made unannounced visits to facilities around the state over the weekend. It is unclear if the visits were responsive to this email or for another reason.
Sent: Friday, July 9, 2021 4:48 PM
Subject: IMPORTANT – MO Dispensary Rules
Good afternoon MO Medical Marijuana Dispensary Licensees,
To date, 135 medical marijuana dispensary facilities are operational. With a growing number of facilities operational, compliance issues may become more frequent. As always, it is our goal to communicate our expectations where there may be misunderstanding or differences in interpretation so that every facility knows exactly how to remain in compliance. However, we want to remind everyone that it is your responsibility to know what rules apply to your facility and, where you have questions, to ask us for guidance. We encourage you to embrace the philosophy that successful licensees prioritize compliance. Working through violation procedures, sorting out remediation and corrective action plans, and complying with suspension of operation orders are all activities that take time and resources away from what you are trying to accomplish, so take whatever steps you need to now to ensure everyone on your team know what they should be doing.
Two issues have arisen lately that we want to address. The Department has become aware of several dispensary facilities that are utilizing a third party for online ordering. The Department has also been made aware on numerous occasions recently of dispensaries that are disbursing medical marijuana as part of a promotional events.
Third Party Transactions
Per 19 CSR 30-95.080(2)(C)1, Dispensary facilities must, for every transaction— 1. Receive the transaction order at the dispensary directly from the qualifying patient or primary caregiver in person, by phone, or via the internet, and not from a third party;
An order for medical marijuana may be placed directly with the dispensary and not routed through another, unregulated business. The Department accepts a software service that hosts the dispensary’s sales and menu items through the dispensary’s own website and acts entirely on the dispensary’s behalf, as long as the software service does not collect or distribute patient data for use outside the dispensary’s use. The transaction may not be made on the third party website.
For example, a facility may utilize a third-party, such as Leafly, Dutchie or Weedmaps, to display the facility’s menu, but a qualifying patient must be redirected to the facility’s website to place the transaction order. A transaction order may not be placed through a third-party regardless if online payment is accepted or not.
Promotions and Promotional Events
Per 19 CSR 30-95.080(2)(N), Dispensary facilities shall not disburse medical marijuana as part of a promotional event. If a facility disburses medical marijuana free of charge for any other reason, the facility shall record that disbursement of product in its seed-to-sale system with all relevant entries, including the qualifying patient or primary caregiver information and the amount of medical marijuana disbursed to that qualifying patient or primary caregiver.
The Department views a promotional event as any activity, advertisement, or publicity designed to increase interest in purchasing medical marijuana or a particular product or brand of medical marijuana. For example, facilities are not allowed to advertise price discounts on a particular product because that would result in disbursing medical marijuana as part of a promotional event. Advertising that there will be discounted pricing on a holiday would also result in disbursing medical marijuana as part of a promotional event. However, reducing prices without noting or advertising the reduction would not be disbursing medical marijuana as part of a promotional event and neither would establishing discounted pricing for classes of patients such as those designated as low-income on their medical marijuana identification card. Events that promote a facility but do not include disbursing medical marijuana would not be a violation of the rule. Keeping in mind that Missouri is a medical market may help a facility determine if what they are considering would be a violation of this rule.
Facilities must immediately make any changes to their plans or operations necessary to come into compliance with these two rules. The Department will be reviewing and monitoring these issues and taking appropriate actions, including notices of violations as necessary. Please contact your Compliance Officer with any questions or concerns.
Thank you for your cooperation.
Medical Marijuana Regulatory Program
Facility License & Compliance Director
Medical Marijuana Regulatory Program
Department of Health & Senior Services