Judge tosses lawsuit challenging Missouri medical marijuana license caps

Paul Callicoat had plans to convert the former Sarcoxie Nursery into a medical marijuana cultivation facility (Joplin Globe file photo).

A Cole County judge on Monday threw out a lawsuit alleging limitations on the number of medical marijuana licenses issued by the state were unconstitutional. 

Cole County Circuit Judge Patricia Joyce ruled that the regulations at the heart of the lawsuit were “properly promulgated and are in compliance with Missouri’s laws and Constitution.” She ruled in favor of the state on all counts and ordered plaintiffs to pay court costs. 

The Callicoats, a family from Sarcoxie, Mo., sued the state earlier this year after their license to open a cultivation facility was denied. 

The lawsuit contended that the limit on the number of medical marijuana licenses and a “geographic bonus” that favored applicants in high-unemployment ZIP codes were unconstitutional, citing the state’s right to farm amendment. 

During an October trial, the family’s attorney also argued that outside groups and individuals had undue access to top state officials — and that access led to an opaque process and contributed to the decision to cap the number of licenses granted.

Joyce wrote in her decision Monday that the constitutional amendment that voters approved in 2018 legalizing medical marijuana “expressly contemplates licensing limitations and authorizes the department to implement such limits, if it so chooses.”

The license caps “do not conflict with or violate the Right to Farm amendment,” Joyce wrote. That’s because, she said, “the right to farm does not apply to the cultivation of marijuana.”

The limits were put into place, Joyce said, “after thoughtful deliberation of both their constitutionality and practical effect.”

The state had a compelling interest in limiting licenses, she wrote, and that was preventing illicit activities and excess medical marijuana.

Limiting the number of licenses available, she wrote, “allows for the proper and active regulation of the controlled substance within the medical marijuana marketplace from cultivation to manufacture to dispensing.” 

The geographic bonus has been a point of controversy and focus of many of the hundreds of appeals of denied licenses. But Joyce wrote that the Callicoats lack standing to challenge the rule because they would not have received a license even if they received those bonus points. 

They wouldn’t have even received a license, she wrote, if the bonus points were taken away from all other applicants. 

There were 582 applicants for a cultivation license, 1,218 for a dispensary license and 430 for an infused-product manufacturing license, Monday’s ruling stated. The state issued 60 cultivation licenses, 192 dispensary licenses and 86 manufacturing licenses. 

Joyce also noted that the department met with potential stakeholders before implementing regulations, but “did not turn away anyone who wanted to meet” prior to the rules and regulations being implemented. 

The department solicited hundreds of comments, held multiple public forums and posted draft rules on its website prior to the rule promulgation process beginning, Joyce said. 

Lisa Cox, spokeswoman for the Missouri Department of Health and Senior Services, said in an email, “we are pleased that our rules and decision have been affirmed by the court, and we hope that those who have been using this case in an attempt to discredit the state’s medical marijuana program will now realize the program has been designed to implement Article XIV fairly and lawfully.”

Paul Callicoat, principal of Sarcoxie Nursery, said in a statement Monday afternoon that the family will be appealing Joyce’s ruling.

“We wish it were not necessary for Missouri families like ours to battle the department through the courts for the right to freely compete in the marketplace and to serve patients’ needs,” Callicoat said.

In addition to the Callicoat’s lawsuit, more than 700 appeals of rejected licenses are still pending with the Administrative Hearing Commission. And last week, a Pennsylvania businessman sued in federal court seeking to strike down a requirement that medical marijuana licenses go to businesses owned by residents of the state.