State ready to issue testing facility licenses

Come Dec. 19, the owners of the sole business venture to apply for a medical marijuana testing facility in Springfield will learn the fate of their potential business.

Botannis Labs Mo. Corp. – owned by entrepreneurs from St. Louis and New York – is one of 17 applicants seeking a testing facility license in Missouri. But it’s one of only two groups with testing facility plans in southwest Missouri.

Missouri Department of Health and Senior Services officials say they’ll dish out 10 testing facility licenses – the first in a series of dates through Jan. 31 to announce nearly 350 winning licenses for medical marijuana facility bids.

Operators of the testing facilities will look for contaminants in the medical marijuana products that are created in the state – either by cultivation or infused-product manufacturing facilities, according to the Missouri Register. After the product is tested, it can be sold in dispensaries.

Botannis Labs officials are planning a testing facility in a 5,000-square-foot space at 215 N. Grant Ave. for an undisclosed amount, said labs spokesman and lobbyist Jeffrey Altmann.

“Testing facilities are what keeps the Missouri public safe from potentially tainted, adulterated or dangerous substances,” said Altmann, who founded lobbying firm Viceroy Government Relations LLC.

Locally, Altmann lobbies for Morelock Builders & Associates Inc. and, in the medical marijuana industry, former NFL player Grant Wistrom’s planned Revival 98 LLC.

If licensed, Botannis Labs will work closely with the cultivators and manufacturers in the region. In the Springfield area, 11 cultivation applications and 15 infused-product manufacturing applications were submitted, including one of each from Revival 98 LLC and Desmond Morris’ The Wholesome Bud Co. and Wholesome Extracts LLC.

One other local group, dubbed ContiCorp LLC, applied for a testing facility license in Stone County, with plans to open shop in Galena. Officials with ContiCorp declined to comment.

Spread-out competition
Thirteen of the 17 testing facility applicants looked to St. Louis, Kansas City or mid-Missouri to set up shop.

Chip Sheppard, board member of New Approach Missouri, which wrote the 2018-approved medical marijuana amendment, has said the number of facilities to be awarded were written as a minimum of two. State officials chose to increase the testing facilities licenses to 10 statewide.

During Springfield Business Journal’s Dec. 9 CEO Roundtable interview on medical marijuana, Sheppard said if the winning bids are solely in Kansas City and St. Louis, there’s potential for an additional location in southern Missouri, per the state’s approval.

“If either one of them don’t get it, everybody’s going to be driving quite a ways,” Sheppard said of the Springfield and Galena applicants. “We’re hopeful that the department will say this isn’t right. They shouldn’t be up and down I-44 all the time with that much weed.”

Lyndall Fraker, director of Missouri’s medical marijuana program, said in the CEO Roundtable interview the state decided to license 10 facilities to allow cultivators, manufacturers and dispensaries easy access to testing facilities throughout the state.

Altmann said he isn’t surprised by the lack of competition in the Springfield area because he said the Ozarks are often overlooked by out-of-state entrepreneurs.

“We knew exactly what we were doing when we wanted to open this lab in downtown Springfield,” Altmann said. “So many times, people look to Kansas City or St. Louis, and 417-land is forgotten about.”

The winning bids will be based on the overall scores on the applications. Facilities with employees experienced in pharmaceuticals and chemistry will receive a higher score on their application, according to the Missouri Register. All employees are required to undergo training.

In the case of Botannis Labs, Altmann said co-owner Matt Wolf has experience in pharmaceutical manufacturing. He pointed to Wolf’s 20-plus years at New York-based Contract Pharmacal Corp., where he’s CEO. Wolf could not be reached by deadline.

The state also has received more interest in the medical marijuana program than anticipated. Over 2,100 business applications were received in August for the nearly 350 licenses that will be awarded, according to state data.

As of Dec. 11, the state had received 25,878 medical marijuana patient card applications and some 23,920 have been approved, said Health Department spokeswoman Lisa Cox. That exceeds the estimate of 22,500 qualified patients the state expected through 2021.

Facility requirements
According to the Missouri Register, the highly regulated testing facilities can’t be owned by individuals who are majority owners or managers of dispensaries, cultivation facilities or infused product manufacturers.

Among the facility requirements, security is a high priority. Testing locations have required security measures, such as video cameras and controlled access to the testing areas. That’s an investment on top of the testing equipment, which can cost up to $600,000, according to Forbes reporting.

While Altmann says Botannis Labs Mo. is ready to hit the ground running, the facility has yet to purchase the required equipment.

“Many of these pieces of equipment cost hundreds of thousands of dollars, and while we’re incredibly optimistic, we’re waiting on that until the state gives us the green light,” he said.

Sheppard said the testing process will slow down the start of marijuana sales in Missouri. That means that come Jan. 24, when dispensary licenses are announced, there’s a chance the product won’t immediately hit the shelf.

“No one’s going to be able to get it sold until it passes a test,” Sheppard said. “You have to go through a testing facility with every batch. Then that testing facility has to test it, and say it’s OK, and then you can sell it. It’s going to be hard to start too quickly.”