Missouri licenses one marijuana testing lab within 30 miles of Kansas City

Only one of the 10 laboratories approved for Missouri licenses to test medical marijuana will be located on the far west side of the state.

The list of labs, released by the Missouri Department of Health and Senior Services (DHSS) late Thursday, shows that the testing facility nearest to Kansas City will be 25 miles to the north, run by Farma Labs in Platte City. Another approved site — Green Orchards Labs in Chillicothe — is about 90 miles northeast of the city.

Seventeen companies applied, but DHSS was only required to approve at least two. However, earlier in the year, the agency announced it would approve 10 testing facilities.

The sites will test the THC levels of all marijuana cultivated in the state, as well as infused products like edibles or oils. The sites will also check for foreign matter or dangerous bacteria, according to the agency.

It has not yet announced which applicants have been approved for the 60 cultivation licenses or 86 infused product manufacturing licenses.

Two laboratories— one in Kansas City and one in St. Joseph — were denied testing licenses, though they scored within the top ten. Both labs said they plan to appeal within the next 30 days to the Administrative Hearing Commission, which often resolves licensing disputes.

Those labs said they were eliminated because DHSS told them they didn’t meet the minimum licensing requirements for companies seeking to participate in Missouri’s medical marijuana industry. Those rules were added to the state constitution in the same ballot measure legalizing medical marijuana that Missouri voters approved in 2018.

Each lab’s rank, set by a third-party blind scorer, did not take into consideration the requirements specified in the state constitution. That analysis was done separately, according to the agency’s spokeswoman Lisa Cox.

All of the proposals were evaluated regardless of whether or not they met the basic criteria set in the state constitution. Therefore, a company could receive high marks by the blind scorer but still be considered ineligible for a license.

Green Precision Analytics was the only lab within Kansas City to apply for a testing license and was ranked eighth on the list by the blind scorer. It was denied because DHSS said it didn’t meet the minimum requirement that Missouri residents must have a 51 percent equitable or voting interest in the company, according to CEO and operating director Anthony David.

However, the lab found the denial to be based on an “uploading error” in which the document submitted to DHSS didn’t reflect the company’s “true corporate structure.”

David said the lab was “100 percent operating within the rules” and that of the four principal investors, a majority live and work in Missouri. As a Shawnee, Kan., resident, David is one of the sole outliers.

“There’s no big business that backs this company,” David said. “We are four individuals and we put in our own money. Every one of us has children that has grown up and gone to school here.”

The application uploading process was “arduous” and documents were “kicked back” if not formatted correctly, David said. DHSS extended the application deadline to better accommodate the influx of proposals submitted to its portal.

“We don’t know if (it was) a clerical error on our part or if it was an error of the system,” David said.

David said he found the initial denial to be “confusing and disheartening.”

“It is a disservice to community from the standpoint of other people in the business and standpoint of patients that there isn’t a testing facility in the Kansas City metro area,” David said.

St. Joseph’s Paradox, Inc., was denied a license because its location was within 1,000 feet of a church, according to its owner, Dr. Richard Schwarz. The state allows cities to require that medical marijuana facilities be at least 1,000 feet from state-licensed daycare facilities, schools and churches.

However, the St. Joseph City Council reduced that buffer zone to 300 feet in April. The proposed site is about 800 feet from the church.

DHSS had not been aware of the revised city zoning regulation and Paradox had not included change in its application, Schwarz said.

“It’s still the law so we would like to be reconsidered,” Schwarz said. “We don’t have anything to lose.”

Paradox’s medical marijuana testing facility will be located in the same site as Custom Industrial Analysis Labs’s new building. Schwarz opened CIA Labs in 1979 and continues to manage it with his son Paul Schwarz, and about a dozen other employees.

The FDA-certified lab, which tests CBD products, pharmaceuticals and pesticides, has the necessary equipment and standard operating procedures already, according to Paul Schwarz.

“(The lab) seems to fit that gap reasonably well,” Paul Schwarz said. “I have feeling a lot of larger labs are not going to want to deal with medical marijuana based on legality issues and what not.”

Paul Schwarz said he decided to jump into a new industry after seeing the response from locals who wanted to try their hand at other marijuana-related businesses.

“They seemed to be glad to know that there is someone in the area, hopefully,” Paul Schwarz said.

Unlike dispensaries, there are no geographic restrictions on cultivation and manufacturing licenses in the state constitution.

However, the department has offered bonus points for companies that submit applications for locations that are in high unemployment areas or 25 miles away from other applicants, incentivizing them to spread across the state, according to Jack Cardetti, Missouri Medical Cannabis Trade Association (MoCannTrade) spokesperson.

“We don’t believe it will be a concern but it will be something we will monitor,” Cardetti said, of the lack of testing facilities in far west side of the state.

If both labs are successful in their appeals, the administrative hearing commissioner will dictate DHSS’s next move, according to Cox.

“If a lab appeals and is approved, it will be up to the judge on how it’s handled,” Cox wrote in an email. “The judge could order us to issue an eleventh license.”

The other testing facilities are spread out over the state. In southwest Missouri, Botannis Labs in Springfield and Conticorp in Galena were certified by DHSS. Mid-Missouri labs will be located in Kingdom City and Fayette. There will be two testing facilities in St. Louis, and one each in Herculaneum and Moscow Mills.