Group of medical marijuana growers must destroy product, surrender licenses

By Jack Suntrup

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    JEFFERSON CITY, Missouri (St. Louis Post-Dispatch) — A group of politically connected marijuana growers in Missouri must destroy their cannabis products and give up business licenses as part of an agreement to resolve a dispute with the state.

An eight-page agreement, signed in May between the licensees and the director of the state’s medical marijuana program, said state regulators and the licensees reached a “compromise” over alleged regulatory violations in an effort to end legal proceedings.

The licensees in question that signed onto the agreement — Archimedes Medical Holdings, FUJM, and Holistic Health Capital — are all based in Perryville.

Archimedes Medical Holdings controls two cultivation licenses and has used the brand name Solhaus, FUJM controls one cultivation license and Holistic Health holds a manufacturing license.

Alleged issues noted in suspension orders ranged from “pervasive irregularities” that prevented the state from confirming that any product from the licensees’ three grow facilities had been properly tested to “numerous outages” on security cameras that went unreported to regulators.

Orders to suspend operations at two facilities in question also noted “employees are using and applying pesticides without proper training or proper Personal Protective Equipment.”

An order to suspend operations at one facility says, “the licensee has left medical marijuana product unattended, unsecured, and in unsanitary conditions.”

“Licensees disagree with the Department’s position,” the agreement said, according to a copy the Department of Health and Senior Services provided to the Post-Dispatch.

The settlement is to “resolve the Department’s allegations” and says the agreement “shall not be construed as an admission of liability or wrongdoing by any Party.”

“My Clients are pleased with the settlement agreement and looking forward to the future,” Tanner Rolfes, attorney for the licensees, said in an email. “Most importantly, the settlement confirms that Archimedes et al, as well as any affiliated entities or individuals, were not involved in any unlawful conduct.”

Hayley Rosenblum Dudney is the registered contact for Archimedes; she is the daughter of well-known St. Louis defense attorney Scott Rosenblum. Rolfes works for Rosenblum’s law firm.

Dudney’s husband, Blonie Dudney, contributed $5,000 to Gov. Mike Parson’s political action committee in 2019.

More recently, this year, Blonie Dudney gave $2,650 to Secretary of State Jay Ashcroft’s campaign; Ashcroft, a Republican like Parson, is expected to run for governor in 2024.

While Hayley Rosenblum Dudney signed the agreement as a manager for Archimedes, Blonie Dudney signed the agreement as a manager of FUJM LLC.

Blonie Dudney also signed the agreement as a manager for Holistic Health Capital.

Jason Buchheit, who also signed the agreement as a manager for Holistic Health and FUJM, has also contributed to Parson’s campaign.

“The primary owners of these licenses will not be eligible to own licenses in the future,” said Lisa Cox, spokeswoman for the Department of Health and Senior Services.

A Kansas City company that sued Archimedes in January said the state had determined the company trafficked marijuana from out of state, but orders to suspend operations from the state, dated between Sept. 22 and Oct. 8, do not reference such findings. Clovr, the company, said $1.7 million in inventory was frozen.

“Archimedes, along with individuals harmed by false accusations, will continue to seek legal action against any and all unscrupulous entities or individuals that opportunistically made and pursued false and defamatory claims,” Rolfes said.

Cox said the agreement “resolves the investigation” into the licensees, and said there are no investigative reports tied to the matter.

The agreement directs the licensees to transfer operational duties of the facilities in question to a third-party management company by June 30.

While some of the product in question was set to be destroyed under the agreement, some product was allowed to be processed and sold.

By the end of November, the agreement says, “Licensees shall submit change of ownership or transfer of license change requests to the Department” for the four licenses in question.

“If Licensees fail to submit a timely change request, … that license will be deemed to have been surrendered to the Department, effective December 1, 2022,” the agreement said.

“The Department’s approval of the change of ownership or transfer of the licenses is contingent upon Licensees divesting themselves of all product currently in their possession,” the agreement said.

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