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Missouri dispensary license scores subject to discovery

The Missouri Supreme Court issued a Feb. 8 opinion affirming that the data of applicants for marijuana growing licenses should be disclosed as part of discovery in a competitor’s underlying lawsuit.

The conflict stems from the 2018 state constitutional amendment that legalized marijuana for medicinal purposes. To regulate the industry, the Missouri Department of Health and Senior Services approves dispensary licenses for select individuals and companies.

After the department denied Kings Garden Midwest’s applications to obtain dispensary licenses, the company appealed its decision, claiming successful applicants received different scores for answers that matched Kings Garden’s failed application. It called the blind scoring methods arbitrary and capricious.

Kings Garden requested in discovery for the department to provide those related scores, and Administrative Hearing Commissioner Renee T. Slusher approved that through a protective order.

The department appealed that decision and claimed a constitutional right to withhold that information by way of the Article XIV confidentiality provision.

“When the people of Missouri voted to enact Article XIV, then, the plain language before them stated that if they submit any information to DHSS, it will — it must — be kept confidential by the Department,” it wrote in its brief.

But the disclosure was affirmed in a circuit court and all the way up to the Missouri Supreme Court.

According to the court’s opinion written by Judge George W. Draper, the court’s decision intended to avoid constructions of the state constitution that would lead to absurd results.

“Without all of the information that formed the basis of Department’s decision, no meaningful review of that decision can occur,” he wrote.

The opinion also said that the state constitution only permits disclosure of data regarding patient information for purposes authorized by federal law and by that section of the state constitution, which applied in this case.

“Department’s position would require an unnatural construction of the constitutional language,” Draper wrote.

The department was represented by James R. Layton of Tueth Keeney Cooper Mohan & Jackstadt, who deferred comment to the department. Lyndall Fraker is the department’s director of the section for medical marijuana regulation and said in an emailed statement that the department expects the underlying case will end in its favor.

“The Department welcomes the clarity provided by the Missouri Supreme Court on disclosure of certain information in appeals of denied business applicants,” Fraker wrote. “Compliance with the Supreme Court’s order will demonstrate that applications were scored consistently.”

Joshua Hill of Newman, Comley & Ruth in Jefferson City represented Kings Garden. He did not respond to a call requesting comment.

The case is State ex rel. Missouri Department of Health and Senior Services v. Slusher, SC99205.