Flawed Marijuana Licensing Process Cost Missouri Millions

Jefferson City, Mo. (KFMO) - A new audit from State Auditor Scott Fitzpatrick finds Missouri’s multi-billion-dollar marijuana industry was launched using a flawed application and scoring process that ultimately cost the state millions of dollars in litigation.

The report gives the state’s Marijuana Program a “fair” rating and concludes significant problems undermined the intended “blind scoring” of license applications. According to the audit, applicants were able to reveal their identities through application materials, and those applicants received licenses at a much higher rate than those who followed anonymity rules.

The audit cites issues involving the Missouri Department of Health and Senior Services, the Division of Cannabis Regulation, and contractor Wise Health Solutions, including inconsistent scoring, poor documentation, and guidance that limited written records.

From 2020 through 2023, the state incurred more than $12.5 million in legal costs tied to licensing disputes. Fitzpatrick also criticized what he described as an adversarial response from the health department and recommended improvements to oversight, inspections, data security, and coordination with the Missouri Department of Revenue.

The audit further raised concerns about customer data retention by dispensaries and limitations in the state’s marijuana tracking system, Metrc, which it says cannot currently flag illegal purchase amounts in real time.