Next Steps for Missouri Medical Marijuana Dispensary Operators

Great opportunity awaits future operators of medical marijuana dispensaries in Missouri, and with the deadline for filing license applications having come and gone, the work has only just begun.  On August 19 the state’s Department of Health and Senior Services (DHSS) closed its call for medical marijuana license applications, with over 2,100 applications filed across four categories.  The state plans to license 60 cultivation facilities, 192 dispensaries, 86 medical marijuana-infused manufacturing facilities and 10 testing labs. This article addresses challenges to be faced in coming months by those who have applied for dispensary licenses.

Dispensaries are expected to begin operating in Missouri sometime in mid 2020.  Through the application process, applicants will have offered commitments related to regulatory compliance, store operations, product sourcing, packaging, marketing employee training and security – commitments they will have to make good on.

PLAN TO SUCCEED

As stipulated by Constitutional Amendment 2, the DHSS must have rules, procedures, licensing and oversight in place for the medical marijuana system by December 31, 2019.  The Emergency Rules published on July 1 (https://health.mo.gov/safety/medical-marijuana/rules.php) established procedures for application and license approval processes and laid a foundation for the forthcoming permanent regulations.

Over the past two months, applicants have acquainted themselves with these procedures and studied how to maintain compliance with state regulations. While the specifics of the final rules are not yet known, it is certain that those who have made successful bids for dispensary licenses will have to deal with the following challenges:

1. Building a Workforce

You’re already behind if you haven’t begun recruiting employees for your dispensary. In addition to the right skillset – whether it is in treatment, sales or security – your future employees need to be trustworthy and hardworking.  Furthermore, the law requires they pass criminal background checks.

Experience is also hugely important, particularly in the areas of pharmaceutics and treatment, and because Missouri is new to the regulated medical marijuana industry, operators with the ability to recruit out-of-state talent are at a competitive advantage.

If you need resources for hiring, Cova’s cannabis retail job description template (https://www.covasoftware.com/cannabis-retail-job-descriptions) provides direction on hiring qualified, competent employees for your marijuana dispensary.

2. Employee Training

If you are a viable candidate for licensure, then you already have a plan in place for training employees. This looks good on paper, but are you prepared to execute this plan? Have you adequately budgeted for implementing your training program?  If you are outsourcing training, have you identified which program(s) you will use? Do you have agreements in place with the facilitators of these programs? Have you addressed the logistics? Ideally, if your management team is in place, they are already engaged in training. The following are examples of courses offered at various locations around the United States that could be of interest to licensees:

https://leafygreenagency.com/budtender-brand-ambassador-seminar

https://www.greencultured.co/cannabis-dispensary-training/

3. Sourcing Product

Dispensaries in other jurisdictions that have adopted regulations for medical marijuana or legal marijuana have inevitably run into problems with sourcing, with many dispensaries scrambling to get their hands on product from suppliers short on inventory.  With so many new manufacturers, growers and dispensaries acquiring licenses, it would be prudent to plan for multiple scenarios, good and bad.  License applicants should have already established relationships with suppliers and should be nurturing these relationships as well as establishing new ones. You should already have deals in place that are contingent on your receiving a license. Well thought out agreements with multiple suppliers will ensure product availability – and variety – to your future customers. Ideally, you’ll be well positioned to build your inventory immediately upon receiving your license.

4. Facility Prep

As part of your application, you will have already spent time considering how to create a facility that meets compliance standards.  However, with dispensaries set to open in mid 2020, you will have plenty of work to do to fully prepare your facility.  If you can’t start work on your facility immediately, work with contractor(s) toward getting your work on their calendar.  Have alternative contractors in mind in case these contractors cannot get started on time (or at all).   Additionally, try to lock in prices for materials and labor ahead of time.  Any approvals necessary for designs (architectural review, etc.) should be obtained as well.  Finally, ensure that all construction involving design is coordinated with the installation of the necessary security controls.

5. Streamlining Operations

You will need to implement software for streamlining sales, inventory and employment data. Vendors such as Cova Software (https://www.covasoftware.com/pos) provide tools for handling this, and most prospective licensees have already settled on a solution. The next step is getting it up and running. If any customization is necessary, this should be implemented as soon as possible.  Further, you may find that you are best off using multiple software solutions for handling point of sale, inventory, security and fulfillment and any other component of operating a successful dispensary. If this is the case, has all the software been integrated onto a platform that provides the functionality you need? Have you adequately tested the system? Have you familiarized yourself with administrating the software?

The central theme is that prospective dispensary operators cannot afford to sit idle during the license review period. Preparations and arrangements cannot be put on hold as you wait to find out whether you’ve been awarded a license. For one thing, each applicant has made commitments under oath, and failing to fulfill these promises could result in stiff penalties. Compliancy aside, gaining an edge in what is certain to be a highly competitive marketplace will be key to creating a successful medical marijuana enterprise.

For more information, contact Mark Balestra, lawyer licensed to practice law in Missouri with Segev LLP, at m.balestra@segev.ca.

Disclaimer

The above blog post is provided for informational purposes only and has not been tailored to your specific circumstances.  This blog post does not constitute legal advice or other professional advice and may not be relied upon as such.