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Green Rush: Missouri medical marijuana industry begins to take shape

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An industry is emerging in Missouri with a new frontier on the horizon.

Medical marijuana passed statewide with voters in November approving Amendment 2 backed by New Approach Missouri. With the Dec. 6 activation date for the amendment in the rear view mirror, how the new sector of commerce will look is yet to be determined.

There are some things known for certain.

On Jan. 5, the Missouri Department of Health and Senior Services will begin accepting application fees for marijuana production facility licenses. The application forms and instructions will be available until June 4.

Patients can begin to apply for registration cards on July 4, and applications for facility operations will be accepted starting Aug. 3.

“Those dates are branded into the Constitution,” said Chip Sheppard, a board member of New Approach Missouri and a lawyer with Carnahan, Evans, Cantwell & Brown PC in Springfield.

Based on the expected volume of applicants, Sheppard said the Department of Health and Senior Services’ response is key.

“The biggest hurdle coming up soonest is making sure when patients apply for their cards, the department has the infrastructure necessary to get those out,” he said.

Some states, like Florida and Oklahoma, outsource patient card production services, he said.

“It’s a bubble, so hiring a ton of staff and having to lay them off later probably doesn’t make a lot of sense,” he said.

On the medical marijuana production and facility side, Sheppard expects to see a rush of applicants before the state divvies out licenses at the end of the year.

“Our estimate is that there are going to be 600 to 700 applications filed,” Sheppard said, noting the development cost likely would weed out applicants. “It’s not something that people can get into cheaply.”

He estimated startup costs between $250,000 and $500,000 to get a license and open the doors of a cultivation facility before any medicine is sold.

“That includes your application fee, attorney fees, architectural, engineering,” he said.
 
For facilities, Sheppard suggests an indoor setting, compared to farmers growing crops outside.

“I don’t think it’s going to be wise to grow outside,” he said. “It’s a lot more of an industrial setting. You need a heck of a lot of HVAC in the winter and summer because the plant thrives at 60 percent humidity at 60 degrees. It’s better suited for a greenhouse or warehouse.”

Though the application process is yet to go live, Sheppard said, interested parties will need to act quickly.

“Speed is going to be key,” he said. “They need to be jumping on it right now to find a location. You have to have a location to get a license. They’ve got to find a bank or credit union, and I would encourage anyone interested in this industry to go on their search now.”

Planting the seed
General contractor Austin Selee’s search already is underway. Selee said he’s organized Grow-Ark Mechanical & Cultivation and plans to construct a $2 million cultivation facility in Barry County.

“I’ve been watching it for the last three years, just waiting. About a year ago, I really saw it was happening,” said Selee, who operates MoArk Renovations & Remodel in Missouri and Arkansas.

Grow-Ark launched in June 2018 to handle the operations at the planned 40,000-square-foot facility. Selee said about 30,000 square feet is dedicated to flowering or harvesting, and 6,000 square feet is set aside for curing, packing and shipping.

“There’s a couple places in mind,” he said. “It will be all-digital, state of the art, and can be run from a tablet.”

Selee said has the financial backing from a football player and a hip-hop artist, though he declined to disclose their names. He said he established the relationships through an employee who was a former teammate of the athlete and by reaching out to the musician.

Funding efforts are beginning to ramp up, he said, with $20,000 being committed so far. Selee said he hopes to secure the rest of the financing by early next year.

“The goal is to have the $2 million from the investors by the end of January,” he said.

Selee wants to train his team in Colorado, where medical marijuana has been legal since 2000. He said he might enlist the services of California-based medical marijuana dispensary MadMen Enterprises to help get the facility operational.

Selee said he would submit an application on Aug. 3.

“We have all of our ducks in a row,” he said.

More changes ahead
The medical marijuana ruling already has made an impact on municipal rulings.

Officials in the Jackson County prosecutor’s office said they would no longer prosecute marijuana possession charges after medical marijuana passed.

“This mandate from voters is directing this shift in our office,” Jackson County Prosecutor Jean Peters Baker said in a news release. “This change toward marijuana is something we have been seeing anecdotally from our juries for some time.”

Sheppard hopes that will be a statewide trend moving forward.

“Cities should not be trying to arrest patients that are trying to use medicines so they can avoid opiates and other medicines that have all kinds of side effects this doesn’t” he said. “So I think it’s a civil penalty if you’re going to take away someone’s Medicare or Medicaid benefits just because they have a patient card.”

According to the Department of Health, the specific qualifying conditions are cancer, epilepsy, glaucoma and intractable migraines, along with broader circumstances, such as chronic medical conditions and terminal illnesses.

After the first 18 months, Sheppard projects there will be 200,000 registered patients.

The day after Amendment 2 passed, dispensary-tracking website DispenaryPermits.com added Missouri to its directory. Dedicated to offering medical marijuana business plan templates and consulting on a national scale.

“You have free enterprise taking over,” Sheppard said.

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