Missouri medicinal cannabis licenses suspended due to ‘irregularities’

Regulators in Missouri have suspended four medicinal weed licenses and ordered product destroyed over alleged irregularities at cannabis operators. The suspensions, announced Thursday by the St. Louis Post-Dispatch, are part of a compromise agreement that marks the end of a dispute between licensees and state regulators over reported violations at the facilities.

The agreement, reached between the director of Missouri’s medical cannabis program and the four companies, directs the licensees to delegate operational management of the facilities to an outside management firm by June 30. Current licensees then have until November 30 to find a buyer and exit Missouri’s regulated medicinal weed industry.

“The primary owners of these licenses will no longer be eligible to own licenses going forward,” said Lisa Cox, spokeswoman for the Missouri Department of Health and Senior Services.

Cox added that the agreement “ends the investigation” of the licensees’ operations.

The agreement also calls for the destruction of some cannabis products that are now in the facilities or that have been transferred to other licensees. However, some medicinal pot products are processed into compliant goods under the terms of the agreement.

“The Department’s approval of the change of ownership or transfer of the licenses is conditional on licensees divesting all products currently in their possession,” the agreement reads.

Among the medical cannabis operators who have agreed to the compromise is Archimedes Medical Holdings, a company that has used the Solhaus brand name and holds two cultivation licenses. Another grower, FUJM, and Holistic Health, a maker of medical marijuana products, are also included in the deal. All four licenses were issued to operate in Perryville, Missouri.

Suspensions due to alleged violations ordered

The order to cease operations of one of the medical weed companies lists details of reported irregularities, including an allegation that “the licensee left medical marijuana product unattended, unsecured and in unsanitary conditions.”

“The licensees disagree with the department’s position,” the agreement said, according to a copy provided to the St. Louis Post-Dispatch by the Department of Health and Elderly Services.

The settlement between regulators and the facility was reached to “resolve the department’s allegations,” noting that the agreement “shall not be construed as an admission of liability or wrongdoing by either party.”

The suspension order for two of the growers includes allegations that “facility staff use and apply pesticides without proper training or appropriate personal protective equipment.”

The four licensees must also transfer operations to a new owner by November 30. According to the agreement, “Licensees must submit requests to change ownership or transfer of licenses to the Department” for the four suspended licenses.

“If licensees fail to submit an amendment in a timely manner, … that license will be deemed surrendered to the Department effective December 1, 2022,” the agreement continues.

In April, a Kansas City-based medical cannabis company filed a lawsuit against Archimedes, alleging that state regulators had found that the breeder had smuggled cannabis into Missouri from abroad and frozen $1.7 million in stock. However, the orders to suspend operations issued by the state last year contain no evidence of such violations.

Tanner Rolfes, attorney for the licensees, wrote in an email that “Archimedes, along with individuals harmed by false allegations, will continue to take legal action against any unscrupulous company or individual who has opportunistically made and prosecuted false and defamatory allegations .”

“My clients are happy with the settlement agreement and look forward to the future,” added Rolfes. “Most importantly, the comparison confirms that Archimedes et al. and any affiliated companies or individuals were not engaged in any unlawful conduct.”