More than 20 Missouri cannabis licensees have a lawsuit ready to file against the state marijuana regulator.
If the Missouri Division of Cannabis Regulation (DCR) does not act to resolve a recall before more than 48,000 recalled products’ shelf-lives expire in early 2024, multiple people familiar with the matter, who spoke on the condition of anonymity due to the confidential nature of the information, say more than 20 licensees will sue the regulator in effort to protect millions of dollars in products.
With a total of 371 cannabis licensees in Missouri, according to DCR data, excluding microbusiness, that means more than 5% of licensees will take part in the lawsuit if it is filed. More licensees may join the suit before the issue is resolved, according to people familiar with the situation.
It is in the Springfield Daily Citizen’s policy to use unnamed sources in very rare instances. In this case, it is because licensees are potentially the parties in a lawsuit and could incur legal expenses and/or loss of business and/or loss of product inventory due to their participation.
One-year shelf-life
The shelf life for most infused products, such as vapes, gummies and tinctures, is about one year, said Jason Bach, general manager at Revival 98, a Springfield retail dispensary. That includes the one-gram packages of distillate — a product made by distilling marijuana plants into a liquid that is used to make cannabis products — sold directly to customers. Revival 98 is not part of the group considering a lawsuit against the state government.
Most infused products held under quarantine were manufactured in the early-second quarter of 2023, according to people familiar. Most of the raw distillate held in quarantine across the state was also made at that time.
With a one-year shelf-life expiring in the early second quarter of 2024, the recalled products need to be released with enough time before expiration that they can be sold to customers, people familiar say. The distillate on hold needs to be released with enough time before expiration that it can be used to make infused products.
If the products are not released from quarantine with enough time before their shelf-lives near expiration, more than 20 licensees say they will sue the Missouri Division of Cannabis for the release of the products, people familiar say.
Administrative Hearing Commission
Earlier in December, DCR revoked the marijuana manufacturing license of Robertsville-based Delta Extraction, the producer at the heart of a widespread recall. DCR has agreed to not order any cannabis licensee to destroy any recalled products “until this issue is ultimately resolved,” according to a joint motion before the Missouri Administrative Hearing Commission.
“However, cannabis licensees may voluntarily destroy [Delta Extraction’s] products and [DCR] will communicate with licensees regarding the circumstances under which destruction of [Delta Extraction’s] products will be allowed,” according to the joint motion.
The recall and Delta’s license revocation will be debated during a hearing before the Administrative Hearing Commission. There is not a set date for the hearing, but a pre-hearing conference is scheduled Dec. 7, according to the commission.
The resolution to the recall “depends on litigation initiated by Delta, and is not in the sole control of the DCR,” Missouri DCR spokesperson Lisa Cox said in an emailed statement to the Springfield Daily Citizen.
Until a resolution is reached, “the product remains in recall status and will continue to be on hold unless a licensee requests destruction or until final resolution of the pending litigation,” Cox said.
The Administrative Commission will deliver a final decision after the hearing between DCR and Delta. Either party “can seek review of that decision” once it has been delivered, Cox said.
There are 371 cannabis licensees in the state of Missouri, including 215 retail dispensaries, 89 infused-product producers and 67 cultivators.
Adult-use recreational marijuana sales dipped 2.7% month-over-month to $96 million in October, according to data from the state. Medical and adult-use marijuana sales totaled $113 million in October, the third straight monthly decline and the lowest monthly total since the the market launched in February.
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