Missouri enters fourth year of regulated marijuana

In Missouri, the Section for Medical Marijuana Regulation, the regulating authority for the medical marijuana industry, is a division of the Department of Health and Senior Services. Since its inception, at the helm of that program is Lyndall Fraker, Director for Missouri’s Section for Medical Marijuana Regulation. 

After three years, the program has seen both triumph and adversity. While the program has faced its share of scrutiny, and at times backlash, it has been successful. Missouri ranks in the top 8 of 36 states with medical marijuana programs by number of enrolled patients. Missouri’s program went from passage of vote to implementation in 23 months, six months shorter than the average implementation time of medical marijuana programs nationally. The state’s implementation time ranks fifth of 26 states who implemented a medical marijuana program with a formal regulatory system.

There have been issues along the way; the constitutional amendment legalizing medical marijuana in Missouri had no provisions for social equity. As a result, the state has little representation by Black-owned marijuana businesses and ranks low nationally in terms of social equity.

In addition to issues concerning social equity, the Department of Health and Senior Services (DHSS) received over 2,000 applications for medical marijuana facility licenses; they initially awarded 60 cultivation licenses, 86 medical marijuana-infused manufacturing licenses,192 dispensary licenses, and licenses for ten testing labs. After awarding those licenses, concerns were raised over the scoring methodology, which was performed by an outside agency selected by the Office of Administration. In the following months, the Department faced more than 850 appeals as a result. In addition to licensing appeals, there have been lawsuits concerning the privacy of application data, the ability for out-of-state residents to own a controlling interest in licenses, and a tumultuous battle with METRC, the state’s seed-to-sale tracking system, over the ability to charge tag fees.

Despite the negatives, Missouri’s medical marijuana program has been praised by cannabis industry professionals who have watched the rollout of programs in other states, Gary Cohen, CEO of cannabis software company Cova, previously told Greenway that much of the state’s success could be attributed to two things unique to Missouri as opposed to cannabis industry roll-outs in other states. 

“Missouri appointed an executive from business and local government (Lyndall Fraker) to administrate the regulation and licensing of a new cannabis program. Most states assign government administrators or establish committees from across various governmental bodies to manage the cannabis program.

“[Missouri also] publicly stated a desire to be open, transparent, and fair,” said Cohen. “While it may seem obvious, this has hardly ever happened. It results in delays, and/or incomplete programs that persist past the deadline to launch the state’s cannabis program because of conflicts, lawsuits, and/or negligent policy.”

Transparency has been an important part of Fraker’s tenure. Under his leadership, the Section for Medical Marijuana Regulation (SMMR) has had an open-door policy. In its infancy, SMMR hosted public forums across the state listening to concerns and feedback from potential patients, applicants, advocates, and constituents. As rules were promulgated SMMR held open-door meetings of their advisory committees. Fraker made himself and his team accessible to applicants touring the state and meeting with members of associations and speaking at multiple public events with a level of frequency and access not seen in other states.

With over 300 licenses approved to operate, over 160,000 active patients, and more than 6,000 persons licensed to work in Missouri’s medical marijuana facilities, the industry is a great distance from those original projections that predicted the state to have a patient base of 26,000 in 2022 – and poised for further expansion and success.

Speaking with the Director

As the program enters its fourth year of marijuana regulation, Fraker spoke to Greenway about the successes, challenges, and realities of medical marijuana in Missouri and what to expect in the year to come.

“This coming year, we should see all facilities that were originally licensed approved to operate.  The majority of the appeals should be resolved or dropped, and our program will be fully operational,” Fraker explained.

What do you reflect fondly on to this point?

The determination of our team and the operators to work together to build a patient-focused, medical marijuana program that is safe and well regulated.

Where do you think the program has succeeded the most?

In following the letter of the law as to what the people voted for which is administering a program to provide alternative medicine for Missouri patients.

In the first year of retail sales the program exceeded $160M in revenues, Missouri now averages over $20M monthly and exceeded $200M in retail sales in the calendar year of 2021, where do we go from here?

   

We should continue to see sales grow as more patients purchase products and all of the licensed facilities get open and are operating.

Your staff has contended with a pandemic, a change to the Department director, lawsuits, and turmoil while building a program from the ground up – how have you been able to deal with these issues?

Well, I wouldn’t necessarily call it turmoil, but I would agree that there have been some challenges.  I think that upholding the truth always wins and having faith that we are striving to fulfill the will of the people has given us the determination to succeed.  I am fortunate to have the best group of people around me working together while delegating authority and then staying out of their way to get things done.

Missouri has exceeded many early projections and has created a robust program and industry. we currently have more than 1 dispensary approved to operate for every 1,000 patients in the state – what were the keys to that success?

We were given a good constitutional amendment to start with.  One that was detailed and very patient and medically based. Our rulemaking process, led by Deputy Director Amy Moore, was very well written with much thought, integrity, and detail even though we were under a very short timeline.  The foundation of our program has given us a structure that is helping produce some amazing results along with many superior operators.

The Section for Medical Marijuana Regulation currently has about 50 employees, can you talk about their workload and what the coming year means for them?

We have been able to increase that number to 57 in recent months.  The patient services and operations team will continue to navigate and help patients through efficiency and education.  Our licensing and compliance team will move more toward making sure facilities are compliant rather than focusing so much of their time on the licensing and commencement process.

While we are nearing the finish line with nearly all of the state’s licensed dispensaries approved to operate, we still have roughly one-third of our cultivation licenses and a little more than that number of our manufacturing licenses that are not commenced – is there a timeline on when we expect to see those numbers closer to completion?

I think in the next 60 days we should see many more of these facilities approved to operate.  We have 308 facilities operating right now and another 20 that have requested their commencement approval which will push us closer to 330 facilities operating by March.  That will only leave another 20 or so, and I think those are going to be the licenses that were issued quite a bit later than the original batch.  Even now, we have more facilities than any other medical-only state except Oklahoma.

Your Department has worked with many of the operators to extend deadlines, given the pandemic and other circumstances – why was it so important to work with businesses rather than revoking licenses?

We have many great business people that have been licensed to operate these facilities.  Every time I go out to tour and meet with the owners and operators I am always very impressed with their operations and the folks that are working in them.  I feel it is very important to give them every opportunity for us to help them in their strive for success, as long as we can see they’ve been making a good faith effort all along to get up and running.  Everything we do is within our authority and is important to the integrity of our program.

One area of concern by patients and advocates is social equity. Do you see ways the state could help solve social equity issues now or in the future?

Well, I can only speak for the medical marijuana program and say we were given very limited and specific authority, and it’s really all regulatory authority. In other words, our job is to implement and enforce Article XIV. There wasn’t much in the law that touched on social equity. I can tell you one of the initiative petitions does touch on this, though. If that passes, the new program would be involved in implementing and enforcing that law just as we have Article XIV.

Has the Department reviewed the legalization proposals that are in circulation, if so how are you preparing for implementation should one pass?

We have reviewed them and helped to prepare the fiscal notes for them as well.  As the year progresses we will just have to keep an eye on how things are going.

At the conclusion of our interview, Fraker offered a final thought, “I think Sir Winston Churchill said it best, ‘Success is not final, failure is not fatal. It is the courage to continue that counts.”