As lawmakers on the Missouri House Oversight Committee prodded state medical marijuana czar Lyndall Fraker and his deputy director, Amy Moore, with pointed questions about the legal cannabis program on Wednesday, local activist Trish Bertrand watched via smartphone in a south Springfield living room.
Bertrand — who helped write the medical marijuana Amendment 2 that voters approved in 2018 — shared pizza with a friend as they followed along with the conversation in Jefferson City.
They also shared looks of incredulity.
When the hour long hearing was finished, Bertrand told the News-Leader that she found the session “explosive,” and in her view, it marked the beginning of a flow of new information that could bring corporate conflicts of interest to light and call into question the integrity of the state marijuana program’s design and implementation.
“The last 20 minutes of the hearing is just a small oversight of a large cluster of errors in the cannabis facility license process,” Bertrand said.
Many activists and would-be marijuana entrepreneurs have balked at Missouri’s process for handing out 348 constitutionally required licenses to sell, grow, test or manufacture lucrative cannabis products.
Roughly 2,200 applications came in, meaning most applicants were destined to fail. Regardless, many of those rejected applicants think mistakes were made along the way.
For example, Springfield-based Wholesome Bud Company owner Desmond Morris — whose company won no dispensary or other licenses — told the News-Leader last month that his team’s application responses received widely varying scores, despite being written identically across the different applications for cultivation and manufacturing.
Morris’s scores, along with everyone else’s, were “blind scored” by a third-party company based in Nevada, Wise Health Solutions.
Wise Health already was the subject of much conversation two days ago when Sen. Doug Libla (R-Poplar Bluff) took the Missouri Senate floor to talk medical marijuana.
In a dialogue with Sen. Lincoln Hough (R-Springfield), Libla called Missouri’s marijuana business licensing process a “big debacle” and said “it was one of the biggest boondoggles I have seen in my business life.”
Hough said Monday, “What I think has been brought to our attention is the discrepancies within those applications, and I think again this just goes back to the human element of this process. But in this situation, when you’ve got actual people looking at these applications, maybe there’s a level of inconsistency there.”
“Well,” Libla replied, “you’re assuming people were actually looking at the applications.”
That comment from Libla was a “mic-drop” moment for the pro-cannabis community, at least in the view of Nate Bullman, a popular video blogger who frequently makes online postings about Missouri medical marijuana.
Also on Monday, Libla called out Missouri marijuana authorities and business practices conducted by the third-party “blind scorer.”
“I think they were sold a bill of goods, personally,” Libla said, referring to blind-scoring services provided to state authorities. “I don’t think they knew this boondoggle would happen. There’s a little due diligence problem there along the line.”
Wise Health was also the subject of much of the questioning state marijuana authorities faced two days later from Rep. Nick Schroer (R-O’Fallon) during the House oversight hearing.
On Wednesday, Schroer closely questioned Moore, DHSS’s deputy marijuana director, about the company: whether Wise Health went through background checks. (Yes, Moore said, but she would “have to refer back to the contract.”)
Schroer also wanted to know about Wise Health’s corporate parentage. Moore said it was a partnership from Veracious Consulting Solutions, of Nevada, and Oaksterdam University, of California.
“Those two came together in a new partnership to form Wise Health Solutions,” Moore said.
Schroer pressed Moore on the cannabis community’s accusations that the Oaksterdam portion of Wise Health was conducting “boot-camp” trainings in early 2019, allegedly teaching companies how to successfully write the very applications that Wise Health itself would later score.
“No,” Moore said. “We have heard those discussions as well.”
Once awarded the state contract, she said, Wise Health was subject to the contract’s provisions on conflicts of interest. That “prohibited them from doing anything like that.”
“We’ve heard a lot of allegations about potential conflicts,” Moore said. “Some have been vague, some have been specific.”
When medical marijuana authorities got a specific accusation, they looked into it, she said. One question was whether Oaksterdam wrongfully trained anybody after its Wise Health partnership was awarded its contract.
“We investigated that,” Moore said. “We do not believe that is true.”
She also said, “Any training of anyone who would have been involved in applications — if it happened, and I’m not aware of applicants who took their training (…) but it would have been before that was awarded. And we know they weren’t continuing.”
Reached by the News-Leader for comment, Wise Health principal C.W. Westom provided a written response noting that his company “was the highest scoring vendor for this unique contract, by far.”
“The State of Missouri designed a very impressive and rigorous license scoring system with numerous layers of protection to ensure a fair and objective blind scoring process for the license applications,” Westom wrote.
He rejected lawmaker claims that human scorers didn’t read the marijuana business applications, calling his team a “remarkable and unprecedented” group possessing advanced credentials including master’s degrees, law degrees and PhDs. He said they followed proper procedure.
“The layers built into this blind scoring process also included criminal background checks for all personnel and signed statements regarding confidentiality and conflict of interest,” Westom wrote, calling the process “above reproach.”
“Any claims contrary to the process and facts outlined above are irresponsible, frivolous and libelous,” he wrote.
Westom did not respond to a question sent late Wednesday about accusations that Oaksterdam trained companies that later applied for business licenses scored by Wise Health.
Deloitte’s role in Missouri marijuana
Lawmakers also asked about a consulting firm engaged by DHSS in the early moments of the marijuana program “to assist … in our organizational design,” in Moore’s words.
The consulting company was Deloitte. Headquartered in London, England, it’s considered one of the world’s “big four” accounting and consultancy firms. It won its contract through a typical bidding process, DHSS officials told lawmakers.
But it appears Deloitte’s name may have never been mentioned before in public comments from DHSS officials during more than 120 verbal presentations they made on Missouri medical marijuana to various stakeholders since early 2019.
A state health department spokeswoman told the News-Leader late Wednesday that Lyndall Fraker, medical marijuana section director, “wasn’t sure” whether “Deloitte had been brought up in public or not.”
“They helped us flesh out what we already had a skeleton to,” Moore said.
She said Deloitte’s work was so detailed it went “down to the level of how many facility agent ID applications we could expect per week” once it came time to permit individual employees for businesses like dispensaries or commercial grows.
Lawmakers said they’d continue with a hearing next week.
Gregory Holman is the investigative reporter for the News-Leader. Email news tips to firstname.lastname@example.org and consider supporting vital local journalism by subscribing. Learn more by visiting News-Leader.com/subscribe.