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Medical marijuana business sues state over denied application to grow

Posted at 5:59 PM, Jan 02, 2020
and last updated 2020-01-02 19:20:29-05

SARCOXIE, Mo.  — A prospective medical marijuana grower suing the state of Missouri was denied a motion to put a temporary restraining order on the Department of Health and Senior Services to halt the licensing process, though the suit will move forward in court.

Paul Callicoat's family saw a treasure in the old, broken-down Sarcoxie tree nursery. It's a historic site on 70 acres of land, trees blocking the view from the highway.

"We're going to bring this thing back, and we just thought that was a good idea," said Paul Callicoat, who now owns Sarcoxie Nursery.

All its attributes are just right for the nursery's new crop: medical marijuana.

Callicoat showed 41 Action News around his cultivation site, which is under construction. The facility has space to grow and process 400 pounds of marijuana a week and will include labs for infusing and manufacturing. Geothermal hybrid greenhouses will sit next to the production building.

"We're cutting edge," Callicoat said. "We will be able to grow medical marijuana in this facility cheaper than everybody because of our technology."

Callicoat is a retired cardiologist. His son is a biologist and chemist. They brought a botanist, a HVAC specialist, and other experts on board to help prepare their facility.

They filled out their application for one cultivation license and sent it to the state.

"We were prepared for the worst but I didn’t really in my heart expect it. I expected to be granted a license," Callicoat said.

However, it came as a shock when the state denied Sarcoxie Nursery's application at the end of December. The Callicoats immediately sued, claiming the process the state used is flawed.

The state awards a 30 percent scoring bonus to businesses in ZIP codes with an employment rate of 85 to 89.9 percent, and a 40 percent scoring bonus to ZIP codes with an employment rate of 0 to 84.9 percent. Sarcoxie is not on that list.

The Callicoats said determining economic impact solely by ZIP code is inaccurate. Further, the ZIP code data was gathered from the U.S. Census Bureau from 2013 to 2017, which the suit claims is out-of-date.

They cite the state's evaluation criteria that mentions only "the potential for the facility to have a positive economic impact in the site community."

"Drive through Sarcoxie and tell me that this community would not economically benefit," Callicoat said.

A little more than 1,300 people live in Sarcoxie, which is just east of Joplin. Families make about $45,000 a year there.

Mayor Don Triplett told 41 Action News the Callicoats have put a lot of work into turning the blighted property around and is confident their business would bring jobs to the area.

Callicoat estimated they would create 35 jobs to start.

Triplett said the nursery is in an Enhanced Enterprise Zone.

In a letter to the state, Triplett said, "With my understanding of the Sarcoxie Nursery's business plan, I believe it is eligible as an 'enhanced business enterprises' because of its agricultural and manufacturing core."

The nursery is in the same boat as many of other cultivation applicants. The state awarded just 60 licenses, which his lawsuit challenges.

The nursery ended up ranking in the upper 200s.

The state's code of regulation says "the number of cultivation facility licenses will be limited to sixty (60) unless the department determines the limit must be increased in order to meet the demand for medical marijuana by qualifying patients."

Finally, the Callicoats said the state is also violating a part of the constitution which says people have the right to farm and ranch.

"Let the market dictate who succeeds and who doesn’t, otherwise you’re going to have lawsuits from now until Texas because of this," Callicoat said.

Spencer Fane is representing Sarcoxie Nursery. They went before a judge in Jefferson City on Monday. They originally asked the judge to put a restraining order on the state to stop issuing licenses, but the judge denied that motion on Thursday.

Sarcoxie Nursery released this statement:

"While we are disappointed by the ruling, we are gratified that the Court agrees that whether or not the regulations constitute a special law, impede ‘access’ to medical marijuana or violates the ‘right to farm’ are fact questions which merit further review. We are now concentrating on proceeding with litigation.”

You can read state's code of regulations on medical marijuana here.