So You Have a Medical Marijuana License… Now What?

If you are one of the lucky few who have received approval for a medical marijuana facility license, congratulations! There are hundred of other business owners who are quite jealous of you right now. You may be taking a deep breath and thinking you can relax and get back to normal work, but I caution you – your approval is conditional. The Department is still watching you very closely and this time next year you could be getting a very different letter. So how can you keep that from happening?

Get to Work

The number one reason the Department may choose to revoke a conditional approval at the end of the first year is because the facility is not operating at full capacity. Your application contained a lot of numbers related to the number of employees you were expecting and the hourly wage you intended to pay them, the square footage of canopy you intended to grow, the volume of testing or processing you planned to do. All of these should be treated as a checklist for your business. Ramping up to that capacity is your most important goal. 

Don’t Make Any Big Changes

There is already talk of “selling” all or a portion of a license. First, a straightforward sale is probably not allowed under the current regulations, especially not in the first year. Second, restructuring or bringing on new partners is allowed with Department approval, but not advisable until after the approval is permanent. 

Making a significant change in ownership is a red flag to the Department who is already under some criticism for the application process. Additionally, it is unlikely the new ownership will want to fulfill the exact business plan submitted by the original applicant. In a time when the Department is looking for ways to validate the application process and their scoring standards, making significant changes to the business plan is an easy reason for the Department to revoke conditional approval.

This goes beyond just changing ownership, I would also advise against moving facilities, changing consultants, or anything else that could give the Department a reason to say you are not operating in the way your application said you would. That may seem like harsh advice as the realities of business clash with the plan on paper, and I’m sure the Department will be reasonable if you made necessary changes to adapt to reality. Just make sure any big change is one you can justify as absolutely necessary in order to fulfill the remainder of the plan.

Get Your Inspection

While the previous two sections talk about what you can do to protect your license, this section is about actual compliance. The Department regulations specifically state that the facility must have an initial inspection within one year of being granted a conditional approval. The Department is likely to delay as long as possible to give every facility the chance to ramp up to full capacity. That means it will be very risky to try to reschedule after the Department offers you an inspection date. Make sure you are ready and do whatever it takes to keep that first appointment. The life of your license depends on it.

The Department is facing a slew of appeals from people who were very close to the top on the scoring sheets. These applicants would most certainly been granted a license in a more open licensure process because they are legitimate business owners with strong plans – just not in the top few point-getters. None of these appeals are asking for a license to be taken away from anyone and given to someone else, but they are all asking for additional licenses. Assuming the Department truly thinks that the minimum number of licenses required by the Constitution is sufficient for the Missouri market, they are going to be looking for reasons to revoke conditional approval at the end of the first year. Make sure your business in operation looks as much like it did in the plan as possible.

This may all sound like common sense, but it is important to remember as we move forward in the industry. Most of you are entrepreneurs and business owners. You know the statistics on new businesses without the additional regulatory pressure you are currently facing. This next year is the most important both for your individual business and for the medical marijuana industry in Missouri more generally. I encourage you to work hard, follow through, and keep your eyes on the prize as we all continue to muddle through.