JEFFERSON CITY — A state appeals court ruled Tuesday that medical marijuana regulators in Missouri cannot keep license applications secret.
In a decision that could upend the state’s application scoring system, the Western District Court of Appeals sided with a California-based company that said it needs the information to challenge regulators over the denial of a license.
The court said denying the information would be “unreasonable and absurd” for companies seeking to determine if the scoring system used by the Missouri Department of Health and Senior Services was flawed.
“Without all of the information that formed the basis of the Department’s decision, no meaningful review of that decision can occur,” the court said.
DHSS spokeswoman Lisa Cox said the department plans to appeal the order to the Missouri Supreme Court.
The decision is the latest in a string of court cases that have been filed in connection with the rollout of legalized medical marijuana in Missouri.
Missouri became the 33rd state to legalize marijuana for medicinal purposes after 65% of voters in 2018 approved Amendment 2, starting a stampede of business owners looking to capitalize on the new market.
About 102,000 people have received medical marijuana cards, allowing them to purchase cannabis products at licensed dispensaries.
More than 800 companies that were denied licenses to grow, distribute and sell pot have filed appeals, asking an administrative hearing commission to determine if the scoring system was fair or flawed.
The scoring system also has drawn the attention of Missouri lawmakers, who have grilled the department over the rocky rollout of the program.
Kings Garden Midwest, which had sought a cannabis cultivation license, said in its lawsuit that the “scoring process used by the Department was arbitrary and capricious in that other applicants were awarded more points for the same and/or similar answers provided by Kings Garden.”
To gauge whether that was the case, the company said it needs information about other applicants.
DHSS has argued that the constitutional amendment that created the program says the information it collects should remain confidential.
But, the court wrote, “because applications are not judged solely on their own merits but are ranked competitively against other applications, the only way to determine whether the Department denied Kings Garden’s applications in an arbitrary or capricious manner is to compare its applications against information from those of successful applicants.”
The appeals process has become an expensive proposition for the state.
In March, DHSS’ top pot regulator, Lyndall Fraker, told a House panel that health officials expect to spend at least $12.4 million fighting legal challenges in the coming year.
That means less money from the proceeds of the program will be going to programs benefiting military veterans, spurring questions from lawmakers about the current management of the program.