JEFFERSON CITY — Missouri’s medical marijuana program has generated millions of dollars for state coffers in the last year, but officials do not yet know how they’ll spend the money.
Under the constitutional amendment legalizing medical marijuana, application fees from businesses, and a 4% tax on medical marijuana sales, are supposed to go to the Department of Health and Senior Services for it to administer the program.
The remaining money is supposed to be transferred to the newly created Missouri Veterans’ Health and Care Fund — and the constitutional amendment allows the Missouri Veterans Commission latitude in how the money is spent.
The DHSS has already used some of the money to administer the marijuana program, but the Missouri Veterans Commission has yet to receive any funds, and officials don’t know how they’ll use the eventual influx.
Questions over how Missouri will spend the money come as the state prepares for its first legal sales of medical marijuana in the coming months.
The constitutional amendment legalizing medical marijuana says the veterans money may go toward operation, maintenance and capital improvements for veterans homes, the Missouri service officer’s program, and other commission-approved services for veterans, including “health care services, mental health services, drug rehabilitation services, housing assistance, job training, tuition assistance, and housing assistance to prevent homelessness.”
Through December, the DHSS spent $3.1 million of the $19 million collected on administering the program.
Almost $1.8 million had gone to personnel costs, while the remaining $1.3 million went to “other expenditures,” according to a health department spreadsheet.
Because sales have not yet started, fees make up all of the $19 million the state has collected.
Beyond staffing expenses, the marijuana program could also face legal costs as applicants who miss out on a marijuana business license consider legal action.
Lisa Cox, spokeswoman for the DHSS, said the department would use money from the veterans fund to pay for any legal representation it needs to defend itself from lawsuits.
The state is battling a lawsuit filed by the Sarcoxie Nursery in southwest Missouri, which did not receive one of 60 cultivation licenses the state issued last month.
The company said it paid a nonrefundable $10,000 application fee, which would have been deposited into the veterans fund.
More lawsuits are possible. The state has announced the winners of licenses for marijuana testing labs, infused products manufacturers, cultivators and transport companies. It plans to announce dispensary license winners later this month.
Cox said the department would request money from the state’s Legal Expense Fund to pay any financial settlements associated with the medical marijuana program.
She said Attorney General Eric Schmitt’s office, as well as the state Office of Administration, determine whether departments can tap into the Legal Expense Fund.
“Should a financial judgment or claim resolution qualify for payment from the Legal Expense Fund, DHSS will submit a request for coverage,” Cox said, adding the DHSS reserved the right to use the veterans fund to cover legal settlements if the claim were denied.
Lyndall Fraker, director of the state’s medical marijuana program, said he didn’t know when the DHSS would transfer money to the Missouri Veterans Commission, and he didn’t know how much the commission would ultimately receive.
“We have to pay all the bills first,” Fraker said. “Certainly we’d love to be able to give them some as soon as possible.”
Jamie Melchert, spokesman for the Missouri Veterans Commission, said the department does have a process for deciding how to spend the money.
He said a committee of Veterans Service Organization representatives will help the commission’s executive director “review and prioritize” written proposals for the fund.
Once prioritized, he said, the nine-member Missouri Veterans Commission will take a public vote on how to spend the money.
Melchert said the commission’s legal counsel had not yet received any written requests, so it is “impossible to speculate how the funds will be utilized at this time.”