Medical marijuana: Missouri notifies winners of testing lab licenses

The first winners and losers in the competition for Missouri marijuana business licenses began to emerge Thursday — and two companies in the Ozarks said they won licenses.

Thursday morning, the Missouri health department announced that it began issuing 10 licenses for medical marijuana testing labs. Thursday evening, officials posted a full list of businesses approved and denied for licenses.

It's the first of six rounds of announcements that will designate which companies may legally trade in medical marijuana in the Show-Me State.

Article 14, Missouri's medical marijuana constitutional amendment, requires that state government issue licenses for at least two testing labs. Voters approved Article 14 by a large margin back in Nov. 2018.

Missouri’s #MedicalMarijuana Lab Testing Facility Applications have been scored and ranked. Ten have been certified: https://t.co/QLbArw2sVj — Mo Health & Sr Srvcs (@HealthyLivingMo) December 19, 2019

The labs are meant to ensure that cannabis products sold through retail dispensaries are safe from contamination from things like chemicals or mold. The labs also are responsible for verifying levels of THC in cannabis products.

At least 17 applications were filed, according to a list posted by the Missouri Department of Health and Senior Services' section for medical marijuana regulation on its website.

RELATED CANNABIS NEWS:

Springfield-area man says police wouldn't accept his medical marijuana card

Missouri will award marijuana dispensary licenses in January, most others more quickly

Two Ozarks applications approved

In southern Missouri, Botannis Labs Mo. Corp said it was approved for a testing lab that will be located at 215 N. Grant Ave. in central Springfield, a block north of Mother's Brewing Company.

"We are in fact the first Missouri medical marijuana license ever awarded, in downtown Springfield," company lobbyist Jeffrey Altmann told the News-Leader.

The Springfield Business Journal reported that Botannis is owned by St. Louis and New York entrepreneurs.

"Our understanding is that the jobs created at the testing labs will be some of the highest-paying in the medical marijuana industry," said Mary Lilly Smith, Springfield planning and development director, in a statement emailed late Thursday. "We’re pleased that those jobs will be created in Springfield."

Another company, ContiCorp LLC, applied for a license to place a testing lab in Galena, a Stone County community northwest of Branson.

Those two are some of the few testing lab applications filed for locations outside of the I-70 corridor linking Kansas City to St. Louis, said Chris Conti, ContiCorp LLC's company principal.

Reached Thursday, Conti said his application had been approved by state authorities.

"We got it," he told the News-Leader. "We got it. We're quite excited."

Conti said he expects to operate a testing lab at 109B S. Main St. in Galena. He said he lives in Galena and currently works at a testing lab for healthcare products not related to marijuana.

Conti described the state marijuana business application process as "rigorous."

"I was pretty impressed, actually," he said. Conti added that he and his team spent about 130 hours working on their bid.

He doesn't know when his lab may open.

"We're not even sure," he said. "It just depends a whole lot on financing."

Conti said he hopes Congress will soon pass federal banking reforms that would allow cannabis-industry businesses to access ordinary commercial banking. Because banks are regulated by federal entities like the FDIC, and because cannabis is prohibited by federal law, it's often impossible for companies like dispensaries or testing labs to use banking services the way a shoe factory or a coffee shop would.

The result is that the cannabis industry often relies on cash transactions, creating security and logistics hassles.

Conti said, "We’ve gone to some local banks and talked to people we know, and they’re very excited about the prospect, but their boards of directors are afraid of the Department of Justice. The lack of consistency in the laws regarding financial services is going to be a hurdle to overcome."

Lab 'welcome' in Stone County

In Stone County, a key business advocate welcomed Conti's license approval and what it could mean for the local economy.

Sheila Thomas, president and CEO of the Table Rock Lake Chamber of Commerce, said she's not extremely familiar with the operations of a cannabis testing lab.

"However, that being said, we certainly would welcome any legally authorized business in Stone County," she told the News-Leader Thursday.

Adding Stone County-based jobs in scientific fields "would be ideal," she said.

The Table Rock Lake chamber is currently trying to convince the Stone County Commission, nearby municipalities and possibly private interests to help fund a new strategic plan for county economic development.

"My gut would say people are going to want to try to develop some businesses that are not specifically tourism-related," Thomas said, "so we might lengthen the seasons of our economy."

Like areas closer to Branson, communities surrounding Table Rock Lake go through seasonal booms and busts. Tourists flock to the lakeshore in warm weather, then go home when it's cold.

Why have 8 more licenses than required?

“Because laboratory facilities will be required to work hand-in-hand with our other licensed facilities and they play an important role in the safety of this program, we opted to license 10 of these facilities to ensure Missouri patients have access to the best medical marijuana products available,” said Lyndall Fraker, director of the DHSS Section for Medical Marijuana Regulation, in a news release.

The department contracted with a third-party business for so-called "blind scoring" of applications filed for the medical marijuana business licenses.

More than 2,100 applications were filed for roughly 348 licenses, of which 192 will go out to retail dispensaries.

What comes next?

License winners were to be notified Thursday by email, according to a DHSS statement. Once winners are emailed, application denials will be sent out. Department officials said they expected to wrap up all of the notifications Thursday.

Winning applicants have five days respond to the email notifications, according to an emergency rule issued by DHSS. A draft of the rule issued in October would have only provided for a 48-hour response window.

"Once all approvals and denials have been issued, the Department will post the final rank/score of all medical marijuana testing facility applicants to its website," officials said in a news release Thursday morning.

On Dec. 5, DHSS announced a "tentative" timeline for announcing the various types of marijuana business licenses. Dispensary licenses will be announced in late January.

Testing facilities: approximately December 19, 2019

Transportation facilities: approximately December 23, 2019

Cultivation facilities: approximately December 26, 2019

Infused Products Manufacturing facilities: approximately January 10, 2020

Dispensary facilities: approximately January 24, 2020

Seed to Sale tracking: January 31, 2020

According to a fee schedule published by DHSS, it costs $5,000 to apply for a testing lab license, $5,000 in annual fees and $5,000 for renewal.