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Concerns raised about medical marijuana licensing process

The Associated Press//January 28, 2020

Concerns raised about medical marijuana licensing process

The Associated Press//January 28, 2020

Several would-be marijuana business owners in Missouri who failed in their bids for licenses are raising questions about how the state selected winners and losers.

The Missouri Department of Health and Senior Services has been announcing licenses as the state prepares for the expected start of medical marijuana sales this summer. Last week, the state announced 192 licenses for dispensaries, awarded from 1,163 applicants.

But several attorneys, lobbyists and applicants told the Kansas City Star about what they considered inconsistencies and irregularities in the scoring process used to award licenses. Administrative appeals and lawsuits are starting to pile up — so much so that the health department last week solicited bids from attorneys who could help defend the state in legal action.

Leisa Stevens compiled what she thought was a competitive application to grow cannabis on 30 acres near Kansas City International Airport. She reviewed state rules, hired an engineering firm and an attorney, and invested about $160,000 in personal retirement funds.

In late December, Stevens learned she didn’t land one of 60 cultivation licenses. The more she dug into her scorecard — graded by a third-party firm hired by the health department — the more puzzled she became.

She received zero points on several questions despite providing lengthy responses. She filed a formal appeal.

“Some of these just seem like mistakes,” Stevens said. “The state just turned this over to a scoring company so they really don’t have any responsibility for this. So it’s kind of a mystery.”

Owners of a Sarcoxie nursery argued in a lawsuit that the state’s limit on cultivation licenses violates the Missouri Constitution’s “right to farm.” Owners of a dispensary proposed for Independence filed suit to challenge that city’s zoning regulations on marijuana businesses.

Greg Wu, co-chair of the cannabis law practice group at Kansas City’s Shook, Hardy & Bacon firm, is representing several applicants in their appeals.

Wu said he hears some common threads. Many of those who applied for multiple licenses copy and pasted their answers on basic questions, yet those identical answers received wildly different scores.

The health department hired a third-party scorer to ease concerns about favoritism in the bidding process. Bidders were evaluated on their methodology, qualifications, performance and cost. A bidder could score a maximum of 218 points, according to bid evaluation records obtained by The Star. The winning bid — by Wise Health Solutions, a new joint venture of Veracious Investigative & Compliance Solutions LLC and Oaksterdam University — scored 120.

Veracious Investigative & Compliance Solutions was formed in 2018 by Chad Warren Westom, former bureau chief for the Nevada Division of Public & Behavioral Health, which regulates that state’s medical marijuana program.

Westom told The Star that the scoring process included many checks and balances to ensure the identity of individual applicants was unknown to the scorers. He acknowledged variations in scores were possible: Each question within a facility type was judged by the same person, but Westom said “it was not logistically possible” to have a single scorer judge a specific question for all facility types.

“For a given specific question, there may have been different scoring perspectives from one facility type to another, because of differences between the professional perspectives of scorers assigned to that facility type and specific question,” Westom said.

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