05/03/2026
A state audit released on February 18 found that hundreds of Missouri cannabis businesses may have gained medical ma*****na licenses in 2019 through an application and evaluation process described as flawed, inconsistent, and lacking transparency.
State Auditor Scott Fitzpatrick reported that the Missouri Division of Cannabis Regulation did not properly establish its blind scoring system when awarding 348 medical cannabis licenses more than six years ago. Out of 2,257 applicants, the division granted 192 dispensary licenses, 86 manufacturing licenses, 60 cultivation licenses, and 10 testing laboratory licenses. Most of these businesses now operate in Missouri’s $1.5 billion cannabis market, which expanded to include recreational sales in 2023, giving the original license holders an early advantage.
The 77 page audit reviewed 67 license applications, about 3 percent of the total. According to Fitzpatrick, the review showed that applicants were allowed to create their own identifying codes during the supposedly anonymous scoring process. About 18 percent used identifiers connected to their company names, making it possible for reviewers to recognize who submitted the application. These applicants were not penalized for breaking the redaction rules.
Based on the sample, roughly 405 of the 2,257 applicants may have used identifiable codes. The audit also found that about 83 percent of applicants who used company based identifiers won licenses, compared with only 15 percent of applicants overall.
However, the sample used in the audit may not accurately reflect the full pool of applicants. The selection of the 67 applications included a higher proportion of successful applicants than existed in the original pool, meaning the results could be skewed.
Despite this, Fitzpatrick maintained that the findings highlight serious problems. He said the process that was supposed to be anonymous could be bypassed by applicants revealing clues about their identity, and those applicants were far more likely to receive licenses. According to him, such issues damage trust in the fairness of the licensing system.
The audit also identified several scoring inconsistencies and procedural weaknesses that contributed to about $12.5 million in legal costs between 2020 and 2023. Appeals from unsuccessful applicants led to 68 additional licenses being issued.
Another concern raised in the audit involved Wise Health Solutions, the company hired to evaluate applications. The report stated that graders were discouraged from writing notes explaining their scoring decisions. A manual reportedly advised evaluators to follow the saying: “Say it and forget it, write it and regret it.”
In response, the Missouri Department of Health and Human Services, which oversees the Division of Cannabis Regulation, rejected many of the audit’s conclusions. In a 23 page reply signed by Director Sarah Willson and DCR Director Amy Moore, the department argued that the licensing process had already been reviewed by the state’s Administrative Hearing Commission, which repeatedly found the scoring system to be consistent and fair.
They also criticized the audit’s methodology, especially the sample of 67 applications. Of those, 42 were randomly selected while 25 were chosen intentionally by the auditor’s office. The department said this created a biased and unrepresentative sample.
Within the audit sample, 48 percent of applicants were approved and 52 percent were denied. In reality, only about 15 percent of the total 2,257 applicants received licenses, while 85 percent were rejected. Because of this imbalance, the department argued that the audit likely overstated the number of applicants who used identifiable codes.
Although the audit ultimately rated the state’s cannabis program as “fair,” Fitzpatrick said the issues uncovered still raise concerns about the integrity of the licensing process. He also claimed that the health department was uncooperative during the audit and used hostile language in its response.
Fitzpatrick said audits are meant to help improve government operations and expressed hope that the department would treat the report as a guide for improving its procedures.
The report also recommended stronger oversight of cannabis inventory to reduce the risk of products entering the illegal market. It criticized the state’s track and trace system, Metrc, saying it could not reliably detect purchases that exceed legal limits in real time. This could allow customers to buy more cannabis than permitted under state law.
Health department officials rejected that criticism as well, arguing that the auditor’s office misunderstood how cannabis regulation works. They said the state relies primarily on seed to sale data analysis rather than physical inspections to detect diversion, which they described as the industry standard in regulated cannabis markets.
While the department said it welcomes constructive feedback, it concluded that the audit’s findings were largely speculative and based on misunderstandings of the licensing system and the state’s regulatory oversight.