by Gregory J. Holman
9 Jan 2021
In southern Missouri, just a handful of dispensaries are open, selling products priced at a premium, when possible, because the Missouri-grown supply of cannabis flower is small.
Products like edibles remain scarce, partly because it takes a large amount of cannabis biomass to manufacture items like THC-infused gummies, and there’s not much legal plant matter on the market just yet. Only about one-fifth of Missouri’s network of lawful cultivation sites is actively growing cannabis plants.
Of the 372 Missouri-based medical marijuana businesses that received the necessary licenses to go forward in late 2019 and early 2020, just 43 were approved to operate by Dec. 31 of last year, according to official statistics from the Missouri Department of Health and Senior Services, which administers the state medical marijuana system.
Twenty-two of those approvals went to retail dispensaries, out of a planned system of 192 Missouri stores, while there are just 13 cultivation centers, out of 60 licensed ones, operating to date.
Meanwhile, the license-winners must begin operating within a year of being granted their license, according to state health department rules. Those deadlines have already begun to expire, beginning with Dec. 26 for the cultivation sites. It’s an open question as to how the market will evolve and who, exactly, will be supplying it. More than 700 would-be marijuana businesses that didn’t get licenses still have active appeals going.
Visiting marijuana businesses
The director of the health department’s Section for Medical Marijuana Regulation, former Marshfield-area GOP lawmaker, Walmart manager and homebuilder Lyndall Fraker, was in Springfield on Thursday night as part of a series of visits to marijuana business licensees to check up on their progress.
The News-Leader interviewed Fraker at a downtown coffee shop while Missouri Medical Cannabis Trade Association executive director Andrew Mullins sat in on the conversation. Mullins did not participate in the on-the-record interview, but he and Fraker attended a dinner with industry types held afterward.
Before the holidays, Fraker told the News-Leader, he visited other parts of the state for similar meetings with cannabis industry people.
The News-Leader asked Fraker why the number of operating facilities was relatively small two years after the election. Is there little appetite for medical marijuana on the part of high-ranking GOP state officials such as Gov. Mike Parson or the health department director, Dr. Randall Williams?
“Absolutely not,” Fraker said, noting that in addition to the 43 companies approved to operate, roughly 62 others are working on getting their “commencement” inspections, meaning roughly 105 marijuana licensees should be close to opening for business, if not already open.
“A lot of (the licensees) probably had delays due to COVID or possibly investor issues,” Fraker said. But in terms of “the ones that we’ve had asking for commencement, we’re working hard to try to get them up and running as quick as we can.”
The “majority” of the licensees have now asked for a commencement inspection or an extension on their one-year deadline, Fraker said. “So, do I think there’ll be some that won’t ask for either-or? Yes, but I don’t think it’ll be very many — just a handful.”
The state plans to notify licensees that aren’t making progress toward opening for business when their deadline passes, Fraker said, and then a licensee gets 10 days to respond to an official letter of notification before authorities begin any action that could lead to losing a license.
Sources tied to dispensaries and other types of marijuana businesses have sometimes complained that the commencement inspection process is time-consuming, but Fraker said his department has made “a good extreme effort to have it completed within 30 days” for each applicant, with the exception of holiday times. In Springfield, for example, “three or four” are very close, Fraker said.
The Section for Medical Marijuana Regulation is allotted the equivalent of 52 employees, Fraker said, of whom 19 are on the commencement inspector team, a fact not previously reported. Fraker said six other employees work on licensing matters, and most other employees are “patient specialists” doing customer service for medical marijuana cardholders, a group that includes patients and caregivers along with “facilty agents” working at licensed businesses like dispensaries, who must carry special ID cards identifying them as legal cannabis workers.
“They’re a very busy team,” Fraker said of the patient specialists: The number of Missourians who have applied for a patient or caregiver medical marijuana card stands at more than 87,000 to date.
Funding for military veterans’ needs
Fraker noted that Missouri’s dispensaries have seen more than $5.3 million in sales between October, when they began to open, and Dec. 31. “That’s a pretty good number for only having maybe half a dozen dispensaries that were actually doing business through those full 90 days,” he said. Health department officials didn’t make forecasts of sales, though a 4 percent tax on all lawful marijuana sales goes toward the Missouri Veterans Commission.
“We’re trying to do all we can with as much as we can here,” Fraker said, in a bid to “make sure the veterans get in as much as possible.”
In September, DHSS transferred $2.1 million to the veterans commission. In its first year, according to earlier data collected by the St. Louis Post-Dispatch, the medical marijuana program generated $19 million in revenues, spent about 7 percent of its money on legal fees and $3.1 million administering the program.
As 2021 opens, the medical marijuana section has a $13 million fund balance on hand, Fraker said, and expects to earn more money as medical marijuana businesses begin their annual re-licensing process and as patients begin paying more 4-percent tax assessments on their purchases at new dispensaries. He could not say how much more money the system could soon turn over to veterans, but hoped for a “nice transfer” as soon as possible after the new fiscal year begins July 1.
“Hopefully, it’ll be more than this first one” of $2.1 million, Fraker said, but any transfer must be authorized through lawmakers’ normal budgeting process.
Fraker added, “We feel like we’ve been very conservative with the funds, we want to be, we are very cognizant of that. That’s why we’re sticking to our 52 (full-time equivalent) employee numbers.”
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