Missouri Auditor Scott Fitzpatrick has begun an investigation into the state’s marijuana program, vowing to assess whether regulators are operating “in a manner that is efficient, accountable and transparent.”
The audit is not a routine, scheduled review. It was initiated by Fitzpatrick after he pledged last year during his campaign to look into how Missouri oversees legalized cannabis.
It will cover both the medical and recreational programs, spanning back to when Missouri voters first signed off on medical cannabis in 2018. Auditors working for Fitzpatrick met with officials at the Department of Health and Senior Services for the first time on Aug. 2.
There was no formal announcement that the inquiry was being conducted, but the marijuana program was listed on Fitzpatrick’s official website on a list of ongoing audits.
Fitzpatrick, a first-term Republican from Shell Knob, said in an email to The Independent that the audit was inspired by the fact that cannabis is poised to be a $1 billion industry in Missouri and the amendments that legalized it “represent some of the most substantial changes we’ve seen to our state constitution in recent memory.”
“These provisions now make up more than one-fifth of the language in our state constitution,” Fitzpatrick said.
He added: “The rules and regulations promulgated for these programs govern hundreds of marijuana facilities all across Missouri that cultivate and sell cannabis products to hundreds of thousands of Missourians each year.”
Lisa Cox, a spokeswoman for DHSS, said the agency has been notified that it will be working with the state Auditor’s office as part of an audit of the marijuana program within the Division of Cannabis Regulation.
The auditor’s office will be just the latest to attempt to delve into the inner workings of a program that has drawn scrutiny from state lawmakers and federal law enforcement.
Medical marijuana instantly became big business in Missouri after voters passed a constitutional amendment allowing it in 2018. Competition for licenses to grow, sell and manufacture cannabis products became fierce when the state capped the number it would issue.
The Missouri House launched an investigation into the licensing process in early 2020, fueled by widespread reports of irregularities in how license applications were scored and allegations that conflicts of interest within DHSS and a private company hired to score applications may have tainted the process.
Legislators also criticized DHSS’s decision to deem license ownership records confidential, a move they argued caused problems in providing oversight of the marijuana program.
Last year, the House voted overwhelmingly to require state regulators to disclose ownership information for businesses granted marijuana licenses. But opposition from the industry sunk the plan in the Missouri Senate.
Meanwhile, Missouri marijuana regulators received three federal grand jury subpoenas in 2019 and 2020, with each redacted before being turned over to the media at the request of the federal government to obfuscate the records being sought.
At the same time, the FBI interviewed lawmakers, local officials and advocates about marijuana licensing. A Kansas City-area businessman testified in a deposition that he was questioned by federal law enforcement in 2021 about marijuana licensing in Missouri and utility contracts in Independence.
Several legislators were also interviewed by the FBI last year, including now-House Speaker Dean Plocher. The focus of the questions was lobbying efforts related to a bill that would have legalized recreational cannabis use without license caps.
The bill fizzled in the legislative session’s final weeks, and voters would go on to approve a recreational marijuana constitutional amendment months later.
While running for auditor last year, Fitzpatrick expressed opposition to the recreational marijuana amendment. He said at the time that his concern wasn’t legalization, but rather the fact that the initiative petition added so much regulation to the state constitution instead of state statute.
He also complained about the idea of the amendment bolstering a “government-mandated monopoly,” referring to provisions that automatically grant licenses to grow and sell recreational marijuana to businesses already serving the medical market.
State Rep. Peter Merideth, a St. Louis Democrat and frequent critic of Missouri’s marijuana regulators, praised the auditor for launching the inquiry, saying he believes the marijuana industry “could use more transparency, especially with respect to the licensing.”
This story was originally published by the Missouri Independent, part of the States Newsroom.
