DHSS stresses compliance in ownership guidance letter

The Missouri Medical Marijuana Regulatory Program issued a guidance letter to facility licensees on Monday, January 27. The letter, acquired by Greenway, offers guidance primarily regarding license ownership change, transfer, combination, or design change.

The letter, penned by Andrea Balkenbush, Facility License and Compliance Director for the Program, is clear that compliance will lead to greater efficiency towards becoming operational.

“Violations of rules are subject to potential license suspension or revocation,” Balkenbush writes. “The procedures for addressing violations of rules are outlined in 19 CSR 30-95.040(5)(C). Making any of the above-mentioned changes before receiving Department approval for that change would be a very clear rule violation, and there should be no basis for a licensee to claim they were unaware of what these rules require.”

Balkenbush shared that the Department is working to verify minimum standards, but is unsure the timeline for review. Each licensee will be assigned to a case manager who will oversee compliance. Licensees have been informed of a mandatory meeting in Jefferson City for the first week of March.

Licensees have also received a survey from the Department.

FROM THE LETTER:

• The Medical Marijuana Registry Portal now includes an option to file a Business License Update. This is the module of the registry you used to submit your Confirmation of Acceptance. This is also how you will pay your annual fee, if you have not already, and make any changes to your license information, such as changes to your primary contact information. All applications for change to a license must be submitted as a Business License Update. However, only one Business License Update application may be pending at any given time for a particular license. Once you submit a Business License Update, the Portal will not allow you to submit any further update applications until after the Department has acted on your pending update.
• The Department views requests for changes under this provision as requests to change elements of a facility’s operation that were considered in the process of evaluating and scoring that facility’s application. Therefore, licensees should consider carefully whether the change they are requesting would be one that may have resulted in a different outcome on the facility’s application, as this is a question the Department will be carefully considered in deciding whether to grant the request.
• Changes in ownership of less than 10% may occur without seeking Department approval. However, if a change is contemplated that would result in pushing the overall change in ownership above 10% from the last time ownership was evaluated, approval must be obtained before making that change. Changes in ownership in amounts that are effectively a transfer of license will be scrutinized to the same extent as a request to transfer and, as such, may be denied if filed before January 1, 2021.
• Requests to change the location of a facility should be made only after careful consideration of the potential impact that change would have made on an application’s score if the new location had been the proposed location. Explanations of why the originally proposed location has become unduly burdensome should be detailed, along with an explanation of why the current burden did not exist or could not have been known at the time the original location was proposed. The Department will scrutinize these requests very closely.
• All combinations of licenses at one location must be approved under this rule. This is true regardless of whether an applicant may have planned from the outset to combine licenses. The rule covers combinations of licenses owned by the same entity as well as combinations of licenses owned by different entities. Applications for combination must include documents showing the proposed physical design of combined facilities. Therefore, it is not necessary for a facility applying to combine licenses to also submit a separate application for change of physical design.

“[W]e are aware of concerns about how long it will take the Department to verify minimum standards and to process applications for change, once we are reviewing them,” Balkenbush concludes in the letter. “We are working hard right now to organize and prioritize everyone’s needs. All licensees should have received a survey from us by now, and the information in your response will be critical in helping us with this task. We have every intent to quickly move through verification of minimum standards, however, we are also aware that the time involved will be largely dependent on the particular circumstances of each facility. Licensees who have always complied with the minimum standards and fully intend to remain in compliance should proceed quickly through the verification process. As for processing applications for change, we will begin work on those for a particular facility as soon as that facility’s current compliance with minimum standards is verified.

Department representatives are expected to elaborate on the letter further at the Wednesday, January 29 legal roundtable hosted by MoCannTrade in Columbia.

Read the letter in full below.