DCR under fire for overstepping their authority and poor performance

The Division of Cannabis Regulation (DCR), a division of the Department of Health and Senior Services (DHSS), came before the Joint Committee on Administrative Rules (JCAR) this week after they were accused of exceeding their rulemaking authority and moving from being a regulatory agency to effectively becoming a roadblock for the industry to function. 

Sen. Nick Schroer and Rep. Peter Meredith were the only committee members present in person at the hearing, with various other members joining and leaving via phone throughout. While the director of DCR, Amy Moore and a few of the DCR’s key staff, represented the DCR at the hearing. 

This was not the first time JCAR and the DCR have met. Both parties, along with the MOCANN Trade Association convened towards the end of the legislative session this past May to discuss the DCR’s marijuana regulation rules and product approval process. 

After that hearing, the DCR released a sweeping new set of rules greatly increasing the regulation of marijuana sales in Missouri on July 30th. The immense new package of rules would be enforced starting September 1. Shortly after the release of the new rules, the DCR then released a multitude of “guidance letters”, which contained new specifications to some of the more broad rules they created. 

The hearing was convened after JCAR members claimed they had constituents, many of which are licensed to sell marijuana, who had a range of concerns about the approval process, the multitude of “guidance” letters, and overall questions of competency in the agency. 

According to licensees, the approval process was riddled with issues that were keeping them from putting new products on the market. JCAR also claimed that some of the guidance letters seemed to actually be new rules, disguised as guidance, that were implemented without the rule-making process. They argue that DCR lacks the authority to do. 

During the hearing, Moore explained that guidance letters were examples of what would be in compliance with the sweeping new rules, but that they were not in fact new rules but new interpretations on how previous rules would be implemented. 

“That guidance does not add anything new, there is no new requirement, there is no new policy by providing examples of what we believe would be compliant or non-compliant,” Moore said. 

Meredith questioned Moore about the guidance further and talked about what some of his constituents were telling him.  

“They are looking at one interpretation of your rules but then being told well actually we are now changing our interpretation of the rules.  That sure sounds like it would fall into the category of an unpromulgated rule,” Meredith said. 

Schroer also questioned Moore about the guidance letters and their stipulations. 

“To me, if that was a part of the rule then that’s fine. But in my opinion, that was not a part of the rule, which is now handcuffing these licensees and business owners,” Schroer said. 

Schroer also noted that this issue was seemingly non-existent when rules were created for the medical marijuana program years ago under the previous director Lyndall Fraker. 

Licensees at the meeting also disagreed with the DCR’s position on some matters. Christopher McHugh is an attorney and CEO of Vertical, a licensed marijuana distributor and retailer in St. Joseph. He spoke as a witness at the hearing. 

“I think it is important for the committee to understand that the guidance we have been talking about, whether you agree with it or not, whether you think it is understandable or not, is not new to us,” McHugh stated. 

Another key issue was the timeframe. Many licenses were concerned about the approval process taking abnormally long times. Per the rules, when a new product is submitted for approval the DCR has 30 days to respond to the applicant to let them know if the application was done correctly. If the application was done correctly, then the DCR has another 30 days to approve or reject the product. 

Following this timeline, products that were submitted on September 1 are not legally obligated to be approved until November 1. So far, the DCR has not approved a single product since September 1, out of the 1,500 applications they have received.  

Moore assured JCAR that the DCR was ahead of schedule and would be approving products before November 1.

But there were concerns about what would happen in the legally approved times, and if DCR would miss their own deadlines. Senator Barbara Washington asked Moore what would happen if a deadline was missed. Moore stated that the applicant would have to challenge that the DCR did not comply with their own rule.

There have been other concerns raised about the running of DCR since Fraker left including it taking months to approve license sales, and even months to have the address of a dispensary changed. 

However, many legislators have been raising issues of the smaller growers selling products on a large scale outside of the dispensary process which are being completely ignored by DCR.

Other business owners have complained that they have read about some of the new “guidance” letters via leaks to left-wing political websites such as the Missouri Independent before they were notified by DCR. There have been several posts on left-wing websites attacking the Parson administration while lauding the increasing DCR regulations. 

At the end of the hearing, Schroer moved that the director of JCAR write a report for the approval of the committee, stating that it is the opinion of the committee that specific guidance letters are unpromulgated rulemaking and that they have no legal effect. He reiterated that the report was just a draft and that the committee would be back to discuss this matter.

According to their website, JCAR is “charged with the responsibility to review administrative rules filed by state agencies for compliance with Missouri statutes”. The committee is comprised of five Senators and five Representatives