Missouri Supreme Court Rejects Marijuana Company’s Appeal Of State Licensing Denial

“The state cannot be thwarted in its effort to enforce public policy and protect the public interest.”

By Jason Hancock, Missouri Independent

The Missouri Supreme Court ruled unanimously Tuesday that state marijuana regulators were within their authority to deny a cultivation business license to a company that failed to include proper paperwork with its application.

Mo Cann Do Inc. applied for a cultivation license to grow marijuana in 2019. The company was denied when the state said it didn’t include a certification of good standing from the Missouri secretary of state’s office in its application.

However, the company argues state rules require the Division of Cannabis Regulation to specify what information is lacking in an application in a letter—which the state didn’t do before it denied Mo Cann Do’s license.

So the company filed an appeal—one of more than 800 appeals filed after the state imposed caps on the number of marijuana business licenses it would award. After losing at the Administrative Hearing Commission and circuit court levels, Mo Cann Do won in the Missouri Court of Appeals Eastern District in February 2023.

The court ordered Missouri to award the company a marijuana cultivation facility license.

The state asked the Missouri Supreme Court to hear the case, in part, because there are dozens of pending cases before the commission and courts “where the particular document deficiency may not have been itemized” in the state’s rejection notice, according to court documents.

On Tuesday, a unanimous ruling written by Judge W. Brent Powell concluded that failing to include a certificate of good standing meant Mo Cann Do did not meet the minimum standards to get a license.

The state was therefore justified in its denial. Failure to inform the company of the deficiency in its application, the court ruled, did not preclude the state from denying the application.

“Even if [the Department of Health and Senior Services] did not provide specific notice to [Mo Cann Do] of the deficiency in its application,” the ruling stated, “the state cannot be thwarted in its effort to enforce public policy and protect the public interest as it pertains to regulating the cultivation and use of marijuana. It is incumbent on DHSS to ensure MCD or other entities entering the marijuana industry follow the laws and regulations related to the industry so the public can remain safe.”

If the Court of Appeals ruling had been allowed to stand, the state argued it would have been forced to award marijuana licenses to applicants who might not have even gotten the necessary scores in 2019.

This story was first published by Missouri Independent.