by | Feb 18, 2026
A state audit says Missouri’s marijuana program has what it calls significant flaws in the application and scoring design process. State Auditor Scott Fitzpatrick said the flaws undermined “blind scoring” due to inconsistencies.
“I give credit to the Department of Health and Senior Services for standing up a program of this enormous scope in such a short period of time. It was a monumental task and I know it was not easy but at the same time it’s clear there were some significant issues with how license applications were evaluated and scored that cast a shadow over the program and ultimately cost the state millions of dollars,” said Auditor Fitzpatrick. “What was meant to be a blind scoring process was able to be circumvented by applicants who provided indications of their identity throughout their applications, and the numbers show applicants who did that won licenses at a greatly increased rate compared to those who followed the rules and remained anonymous. These sorts of issues undermine the confidence applicants and taxpayers have in the legitimacy of the license granting process.”
The report found that applicants were allowed by the Division of Cannabis Regulation (DCR) to create their own unique identifier to upload supporting documents, which meant all reviewers familiar with an applicant could potentially determine the applicant’s identity, risking anonymity during the process.
The report also found flaws with procedures and a lack of documentation used by a firm contracted by the state to help with the process of the multi-billion dollar industry.
The review of a sample of applications identified significant scoring inconsistencies during the application process and blames the issues for resulting in significant legal costs.
From the State Auditor’s Office:
From 2020 through 2023, the DCR incurred over $12.5 million in costs associated with litigation and administrative appeals based on the 2019 licensing process. In total, as a result of appeals, 68 additional licenses were awarded in addition to the 348 original licenses granted via the medical licensing process, representing a 19.5% increase in the total number of license being granted.
Auditor Fitzpatrick said the report also highlighted “derogatory and inflammatory language used in the response provided by the Department of Health and Senior Services in an effort to discount the report’s findings.”
The report indicates DHSS personnel has been uncooperative with the State Auditor’s Office. DHSS maintains various information in the report is inaccurate. The Auditor’s office said DHSS has yet to provide documentation to support its position.
“I was surprised and disappointed by the adversarial tone the department took with our audit team and the repeated attempts agency officials made to undermine the legitimacy of this report. An audit is meant to be a helpful tool to enhance government efficiency and I am confident our report found several areas where the department can and should improve. I sincerely hope they will change their attitude and view this report as the beneficial roadmap it is meant to be,” said Fitzpatrick.
Fitzpatrick issued a “fair” rating to the state’s Marijuana Program.
The report recommends DCR improve its procedures for oversight and monitoring of licensed marijuana facilities, as well as the overall marijuana market.
The audit found dispensaries retain confidential information from customers without obtaining consent from the customer to retain this information. State regulations require dispensaries to obtain appropriate identification from all users to confirm the customer is old enough to purchase cannabis, but regulations do not require data be retained from customers.
The report also concluded the statewide track and trace system, Marijuana Enforcement Tracking Reporting & Compliance (Metrc), cannot spot purchases over the legal transaction quantity limits in real time. The report states: As a result, marijuana customers are able to purchase more cannabis than what is allowed by the Constitution, and there is an increased risk of diversion and a public safety concern.
Missouri Department of Health and Senior Services Spokesperson Lisa Cox provided Missourinet with this response:
The Auditor’s characterization of appeal-related costs is misleading because costs incurred during appeals are a normal and necessary part of due process under Missouri law, and DHSS does not have discretion to avoid these costs since applicants have a statutory right to challenge licensing decisions.
Legal and administrative expenses tied to appeals were anticipated and budgeted as part of implementing a constitutionally mandated program. DHSS disputes any implication that these costs represent inefficiency or mismanagement; rather, they reflect compliance with constitutional and statutory requirements as demonstrated by the outcomes of these cases, which were overwhelmingly in favor of DHSS.
For this audit, we received 160 requests for information and complied with all of them within established deadlines or within extended deadlines set collaboratively with auditing staff. Over the course of 2.5 years, at least 73 staff collectively dedicated thousands of hours responding to these requests, participating in at least 20 interviews and other meetings, training auditing staff in our systems, educating auditing staff on rules and law and subject matter, and coordinating hosting auditing staff for 15 onsite facility inspections, among other things.
We were not aware at any point that this level of cooperation was considered insufficient, and we are proud of the hard work, expertise and patience our staff committed to this project while simultaneously ensuring we met all deadlines for a rapid and complicated program implementation.
We will take what is beneficial and constructive from this audit and continue to make improvements, as we always have.
The complete audit can be found here.
Missourinet has updated this story to include comments from DHSS.
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