Published 21 hours ago on September 14, 2020 By Ben Adlin
When it comes to supporting military veterans with medical marijuana revenue, Missouri is beginning to put its money where its mouth is. The first-ever transfer of cannabis revenue to a state veterans fund just place, with more than $2.1 million routed from the Department of Health and Senior Services (DHSS) to the Missouri Veterans Commission (MVC), where it will fund health services for those who have served in the military.
The payment comes just ahead of the opening of Missouri’s first medical cannabis dispensaries, which regulators said Friday are expected to begin business later this month. A provision in the state’s medical marijuana law that was passed by voters in 2018 routes all state cannabis revenue after expenses to the veterans commission. While taxes won’t begin flowing until sales begin—a 4 percent tax will be taken at dispensaries—the state has already collected millions in license and registration fees from businesses and patients. “Facilities are getting up and running now, and the first testing laboratory is on track to be operational very soon,” Lyndall Fraker, director of DHSS’s medical marijuana regulation section, said in a statement Friday. “We are confident that medical marijuana will become available for patients this month, and I am grateful for all the hard work by so many that got us to this point.” DHSS said that a “formal presentation of this significant transfer of funds is being planned in the near future.” “Missourians voted on this amendment because it allowed for a safe and well-regulated medical marijuana program for patients, but it also was written to simultaneously benefit our very deserving veterans through services MVC will now be able to provide,” DHSS Director Randall Williams said.
Despite the seven-figure sum, Missouri has raised far more in cannabis revenue than the $2,135,510 sent to the veterans commission. Under the state’s legalization law, the money is first used to pay operating expenses, which turned costly last year as the state’s licensing program for medical marijuana businesses came under fire. According to the St. Louis Post-Dispatch, the state has spent $1.3 million defending itself against legal challenges filed by would-be medical cannabis businesses whose applications were rejected by the state. Of 853 administrative appeals filed against the state, a DHSS spokeswoman told the paper, 785 remained unresolved as of last Wednesday. Before the COVID-19 pandemic put the state legislature on pause, lawmakers had held a series of hearings on the licensing process, which critics have alleged was subjective and unfair. “It’s not yet clear from those hearings,” the Kansas City Star Editorial Board wrote in March, “whether the obvious scoring issues reflect simple human error, serious incompetence, or something more sinister such as conflicts of interest or corruption.” The state medical marijuana program had generated $19 million as of this past December, the Post-Dispatch report notes, “meaning the state spent nearly 7 percent of fees collected last year on legal expenses.” The program had also, as of December, spent another $3.1 million on administrative fees.
State Rep. Peter Merideth (D) said the state’s opaque licensing process and “arbitrary cap” on the number of licenses available served to undercut the program’s economic promise, which is part of what sold voters on legalization. “There are businesses across our state ready to get off the ground, and the government’s getting in the way and stopping them from doing it,” Merideth told the Dispatch. “Instead of raising money for veterans, from this whole business development in our state, we’re spending that money to pay lawyers and fight to keep businesses from opening.”