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More than 800 appeals filed by jilted pot companies in Missouri licensing fight

More than 800 appeals filed by jilted pot companies in Missouri licensing fight

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JEFFERSON CITY — In a sign of what could be a lengthy and expensive legal fight, more than 800 appeals have been filed by companies that were denied permits to sell, grow and distribute medical marijuana in Missouri.

Although state health officials anticipated legal challenges when they launched the licensing process for the fledgling program, it is unclear if they are prepared to handle the onslaught of appeals.

Through Friday, the Missouri Department of Health and Senior Services had hired three outside lawyers to help the state’s in-house legal team sort through the appeals.

The trio of attorneys are from Poplar Bluff, St. Louis and Jefferson City. Each will be paid a maximum of $49,000 through 2023, according to the contracts they signed this month.

In January, DHSS said more lawyers could be hired “if needed on an hourly basis, to supplement our in-house attorneys and attorneys from the Attorney General’s Office.”

As part of the licensing process to launch the state’s legalized medical marijuana program, the state received 2,266 marijuana business applications filed by at least 700 different groups. It awarded 60 licenses to grow marijuana, 86 to make marijuana-infused products and 192 to open dispensaries.

Those who didn’t get permits have flooded the state’s Administrative Hearing Commission with appeals. AHC spokeswoman Vicki Hale put the current estimate at 845 on Friday.

Many of those say the state’s scoring system for awarding permits was flawed.

In August, the department hired Nevada-based Wise Health Solutions, to score applications. The state could pay the company as much as $582,061 for its work.

Rejected applicants have complained that Wise assigned different scores for some of the same answers on applications.

“Applications that were largely identical received substantially different scores,” attorneys for NGWMO LLC said in a Jan. 23 filing with the hearing commission. That company is appealing after its two cultivation applications were rejected.

Several rejected applicants also allege a conflict of interest by Wise.

In a Jan. 22 filing, rejected applicant Missouri Now Association LLC said Wise Health Solutions was a newly formed venture between Oaksterdam University and Veracious Investigative and Compliance Solutions.

Oakland, California-based Oaksterdam is an unaccredited institution that offers training for people and businesses hoping to enter the legal cannabis industry.

“Based on information and belief Wise Health Solutions intentionally or unintentionally exploited the subjective, open-ended” state application “to reward those applicants who had paid Oaksterdam,” the filing alleges.

The problems have drawn the scorn of state lawmakers, who earlier launched a probe into the roll out of the program.

Initially, the House committee conducting the inquiry thought they might hold one hearing on the matter. But, on Tuesday, amid anger over answers it received from department officials, members will hear from DHSS Director Randall Williams and the state’s top purchasing officer, Karen Boeger of the Office of Administration.

Those hearings could continue through the spring as lawmakers delve into whether the program has been managed correctly.

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