A joint committee of state legislators said the state cannabis regulator overstepped its authority when it issued highly specific guidance on marijuana product packaging, according to a report from the committee.
The Joint Committee on Administrative Rules, a bipartisan body of Missouri state senators and representatives, sent the report to the Missouri Division of Cannabis Regulation on Nov. 15. The report centered around highly specific guidelines published alongside its rules governing marijuana product packaging.
The joint committee report said the guidelines were an overreach of authority and would have adverse effects on the industry, according to the report. The committee has asked the cannabis regulator to remove any guidelines outside of promulgated rules from its website and publications. The committee has sent its report to groups governing appropriations and the Governor's Office.
The committee's report seeks to limit the authority of the Missouri cannabis regulator in its rulemaking process. At the same time as the report, the Division of Cannabis Regulation finds itself in the midst of a controversy surrounding a three-month-old recall that has left more than 48,000 products in quarantine across the state.
The Division's packaging rules include details, such as whether the “shape of a human includes figures such as an alien or robot,” or the color to be used for QR codes, according to the committee's report.
“What we had happen here was a department was too aggressive in their rulemaking process,” said state Rep. Alex Riley, a Republican who represents part of Greene County. “The regulations that started getting pushed down from the department went well-beyond the authority granted to them in the Constitution.”
Springfield legislators speak out
Riley, who is a member of the Joint Committee, said regulators are allowed to fill in the blanks when it comes to enforcing regulations, but they can't create new laws. That's essentially what the Division of Cannabis Regulation had done in this case, Riley said by phone Nov. 15.
“It's our job to provide some checks and balances and hold the department accountable and that's what we did today,” Riley said.
Sen. Curtis Trent, who represents Barton, Dade, Webster and part of Greene County, is also a member of the joint committee and said he is hopeful the Division will review its practices.
“Hopefully the next step is that the agency, you know, reviews what it's doing in light of the hearing and the letter and everything and make some tweaks to its processes that ... make it basically more reliable, better for the producers to follow,” Trent said by phone Nov. 16.
The Division of Cannabis Regulation ‘disagrees'
The Division of Cannabis Regulation disagrees with the report's legal analysis and conclusions, spokesperson Lisa Cox said in an email Nov. 17.
“The Missouri Supreme Court has made clear that guidance like the Department’s is an expression of our interpretation of the law,” Cox said in the emailed statement. “In other words, guidance is not law; it is a communication regarding how the Department understands its rules.”
The regulator also questioned the authority of the joint committee report.
“The report from the Joint Committee on Administrative Rules is not a ruling,” Cox said. “It does not have any legal effect for the Department.”
If the department is not allowed to use guidance, then it “would never be able to answer its licensees' questions about how to comply with rules,” Cox said.
“This would cause significantly higher noncompliance in the cannabis industry, driving up the state's enforcement costs, increasing licensees' costs in penalties and remediation of violations, and harming the public,” Cox said.
Legislative action in 2024?
Riley said that if the department did not adhere to the joint committee's guidance, legislators would have to take action against the department when the legislative session starts in January.
“If they continue to go beyond their authority, then the legislature as a whole will have the ability to take action against the department,” Riley said. “There's certainly ways that we can put pressure on them through the budget.”
Riley added that the legislature could strike “the whole rules” governing marijuana packaging once the session starts.
Cannabis regulator faces recall that has riled the industry
At the heart of the issue is a state regulator that has faced turmoil on multiple fronts as it grapples with the appropriate way to handle a booming industry in its first year of existence.
As it faces the committee's ruling, the DCR is in the midst of a three-monthlong recall that has riled the industry, leaving producers across the state sitting on hundreds of thousands of dollars worth of finished products and millions in marijuana distillate.
The state regulator revoked the license of the producer at the heart of the recall, effective Dec. 2, but the fate of the 48,000 products still being held under the recall remain in question.
Adult-use recreational marijuana sales totaled a record $98 million in September, according to data from the state. Since the first medical sale in the state in 2020, cumulative recreational and medical sales totaled $1.6 billion in September.
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