Regulators in Missouri have suspended four medical weed licenses and ordered products to be destroyed over alleged irregularities at the cannabis operators. The suspensions, which were revealed by the St. Louis Post-Dispatch on Thursday, are part of a compromise agreement that marks the end of a dispute between the licensees and state regulators over reported violations at the facilities.

The agreement reached between the director of Missouri’s medical cannabis program and the four businesses directs the licensees to transfer operational management of the facilities to a third-party management firm by June 30. The current licensees will then have until November 30 to find a buyer and exit Missouri’s regulated medical weed industry.

“The primary owners of these licenses will not be eligible to own licenses in the future,” said Lisa Cox, spokeswoman for the Missouri Department of Health and Senior Services.

Cox added that the agreement “resolves the investigation” into the licensees’ operations.

The agreement also calls for the destruction of some cannabis products now held by the facilities or that have been transferred to other licensees. Some medical pot products, however, will be processed into compliant merchandise under the terms of the agreement.

“The Department’s approval of the change of ownership or transfer of the licenses is contingent upon Licensees divesting themselves of all product currently in their possession,” the agreement reads.

The medical cannabis operators that agreed to the compromise include Archimedes Medical Holdings, a company that has used the brand name Solhaus and holds two cultivation licenses. Another cultivator, FUJM, and Holistic Health, a medical marijuana products manufacturer, are also included in the agreement. All four licenses were issued for operations in Perryville, Missouri.

Suspensions Ordered Over Alleged Violations

The order to cease operations at one of the medical weed companies lists details of the reported irregularities, including a claim that “the licensee has left medical marijuana product unattended, unsecured, and in unsanitary conditions.”

“Licensees disagree with the Department’s position,” the agreement said, according to copy provided to the St. Louis Post-Dispatch by the Department of Health and Senior Services.

The settlement between regulators and the facility was reached to “resolve the Department’s allegations” and notes that the agreement “shall not be construed as an admission of liability or wrongdoing by any Party.”

The suspension order for two of the cultivation operations includes allegations that the facilities’ “employees are using and applying pesticides without proper training or proper Personal Protective Equipment.”

The four licensees will also be required to transfer the operations to a new owner by November 30. According to the agreement, “Licensees shall submit change of ownership or transfer of license change requests to the Department” for the four suspended licenses.

“If Licensees fail to submit a timely change request, … that license will be deemed to have been surrendered to the Department, effective December 1, 2022,” the agreement continues.

In April, a medical weed company based in Kansas City filed suit against Archimedes, claiming state regulators had determined that the cultivator had trafficked cannabis into Missouri from out of state and that $1.7 million worth of inventory had been frozen. However, orders to suspend operations issued by the state last year do not include references to any such violations.

Tanner Rolfes, attorney for the licensees, wrote in an email that “Archimedes, along with individuals harmed by false accusations, will continue to seek legal action against any and all unscrupulous entities or individuals that opportunistically made and pursued false and defamatory claims.”

“My clients are pleased with the settlement agreement and looking forward to the future,” Rolfes added. “Most importantly, the settlement confirms that Archimedes et al, as well as any affiliated entities or individuals, were not involved in any unlawful conduct.”

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