Cannabis Company Denied License in Missouri Wins $28M Lawsuit
A company hired by Missouri to score applicants for the state’s medical cannabis has lost a $28 million lawsuit brought by one of the companies denied an industry license last year, the St. Louis Post-Dispatch reports. Wise Health Solutions was sued by GMT Consulting in 2020 claiming Wise’s scoring method was flawed and “corrupt,” which resulted in the license denial.
An arbitrator found that Wise “negligently performed its consulting duties” for the state Department of Health and Senior Services (DHSS), which caused GMT “to be wrongfully denied dispensary licenses.” GMT is in court seeking to force Wise’s insurance company, Hiscox Insurance Co., to pay the $28 million judgment.
DHSS spokeswoman Lisa Cox on Tuesday told the Post-Dispatch that the ruling is not an indictment of the state’s medical cannabis industry application scoring system and “the issue appears to be a terms dispute with an insurance company and a non-execution agreement, not a decision by a court on the merits of scoring.”
The Missouri Medical Cannabis Trade Association also downplayed the outcome, saying the litigation is “between two private parties” and “doesn’t include the state.” The organization also said the decision “will have zero impact on Missouri’s more than 150,000 medical cannabis patients, our industry, or Missouri’s program.”
Wise Health had been paid $2.1 million from the state for its role in scoring industry applications but the state has paid more than $6.7 million in legal fees associated with the fallout of the company’s work, the report says. The state has had to use funds from the newly-created veteran’s fund – which is supported by medical cannabis taxes and fees – to cover some of the legal expenses.
Author: TG Branfalt