KANSAS CITY — The Missouri Court of Appeals for the Southern District has reversed a lower court judgment that upheld the denial of multiple medical marijuana facility licenses to Hippos LLC, directing that the Missouri Department of Health and Senior Services grant the company 13 licenses it previously sought.
In a decision filed March 10, the appellate court ruled that the circuit court erred in affirming determinations by the Administrative Hearing Commission that found Hippos ineligible for the licenses.
The appellate panel concluded the commission made errors when evaluating certain application scores and held that correcting those errors would have resulted in the licenses being awarded.
The case stems from applications Hippos submitted after Missouri voters approved Article XIV, Section 1 of the Missouri Constitution on Nov. 6, 2018, establishing the right to access medical marijuana.
Following the amendment’s adoption, Hippos applied to the Department of Health and Senior Services for three cultivation licenses, six infused products manufacturing licenses, and five dispensary licenses.
On Dec. 26, 2019, the department awarded Hippos one cultivation license but denied its other two cultivation applications.
Hippos appealed those denials to the Administrative Hearing Commission on Jan. 24, 2020.
The department also denied the company’s six infused products manufacturing applications on Jan. 10, 2020, and its five dispensary applications on Jan. 23, 2020. Hippos filed separate appeals with the commission challenging those denials in February 2020.
The Administrative Hearing Commission ultimately determined that Hippos was not eligible to receive the additional licenses.
The circuit court later affirmed the commission’s decisions, leading Hippos to appeal to the Missouri Court of Appeals.
In reviewing the case, the appellate court applied the constitutional and statutory standards governing judicial review of administrative actions.
Those standards require courts to determine whether agency actions are authorized by law and, when hearings are required, whether decisions are supported by competent and substantial evidence on the whole record.
The appellate court found that errors occurred in the scoring of Hippos’ applications during the licensing evaluation process.
According to the court’s opinion, the commission improperly relied on certain scoring determinations while disregarding other scores that should have been used under the established evaluation methodology.
The appellate panel reversed the circuit court’s judgment affirming the commission’s decisions denying the 13 license applications.
The court remanded the case with instructions for the circuit court to order the Department of Health and Senior Services to grant the cultivation, manufacturing and dispensary facility licenses Hippos had applied for.
Missouri Court of Appeals, Southern District case number: SD38218
