Mississippi medical marijuana competitors claim Health Department is allowing operator to flout state regulations, crush small operators
Published 7:14 am Saturday, October 8, 2022
By Geoff Pender
One of the largest operators in Mississippi’s fledgling medical marijuana industry did not follow state regulations, according to Department of Health documents obtained by Mississippi Today.
But the department’s response so far — to write Mockingbird Cannabis LLC a letter listing “corrective actions” — has competitors crying foul. They say Mockingbird was allowed to grow and harvest a crop improperly and on the cheap in plastic- and cloth-covered greenhouses that will allow them to beat others growing in buildings to market as the state’s medical marijuana program gets rolling.
They also say the department appears to be giving big-money Mockingbird special treatment that will shut out others, particularly smaller home-grown Mississippi companies.
“(Mockingbird) has come in and thrown a lot of money around and they are expecting to be pandered to,” said Zack Wilson, chief operating officer of Good Flower Farms, a smaller grower in Potts Camp. “Pictures don’t lie. They have broken the damned law. What is the state going to do to them? That’s what everybody wants to know.”
Others in the industry shared similar sentiments but would not comment publicly. Mississippi Today was supplied photos taken from outside one of Mockingbird’s growing sites that show what appear to be violations of state regulations. One regulation is that “cultivation activities are not visible or accessible to the public.” Through a records request, Mississippi Today obtained Health Department photos and correspondence documenting other problems.
Health Department inspectors on Sept. 14, after receiving complaints likely from competitors, found that a Mockingbird grow site was out of compliance with several state growing regulations. Among the department’s findings at the site: Mockingbird was growing plants in greenhouses with tarp or clear plastic walls (some rolled up and some with large holes in them) and lax security that included a loosely chained back fence gate with a padlock.
In this photo submitted to Mississippi Today, taken outside a Mockingbird Cannabis site near Raymond, marijuana plants are seen growing in a plastic-covered ‘hoop house.’ Credit: Submitted photo
State regulations say “all cultivation activities must take place in indoor, enclosed, locked and secure facilities” that have a “complete roof enclosure supported by connecting permanent walls, constructed of solid materials extending from the ground to the roof.” The regulations also specify a long list of stringent security requirements including “commercial grade locks on all external doors.”
Health Department inspectors, records show, also found that Mockingbird was growing plants without the required state “seed-to-sale” tracking tags attached.
Mockingbird’s CEO, in a lengthy interview with Mississippi Today, said the company has corrected minor issues and that the complaints are sour grapes from competitors because the company took a “calculated risk” investing millions before a state program was approved, giving it an edge on competition. It plans to have marijuana product ready soon, likely the first major batch for the program lawmakers approved this year after years of debate and stalls.
“I will tell you we haven’t done anything we didn’t disclose to the Department of Health and in our application,” said Mockingbird CEO Clint Patterson, a former prosecutor from Oklahoma. “We feel like we have gone above and beyond to be good citizens, compliant with law enforcement and compliant with the Department of Health.”
Patterson said that of the 15,000 or so plants Mockingbird was growing at its secondary facility, only 30-50 did not have tags. He said the company had tags for the plants, but just hadn’t attached them and quickly rectified that.
Law enforcement also received calls about Mockingbird, and state Public Safety Commissioner Sean Tindell said Mississippi Bureau of Narcotics officers went out to the site and looked into it. But he said once they learned Mockingbird was a licensed grower, they backed off. He said the way state medical marijuana laws are written, the Department of Public Safety cannot participate in regulating the industry, and it would be up to the Health Department to call them in “if they felt something was egregious enough.”
Health Department officials refused to answer Mississippi Today’s questions about the company.
The greenhouse effect
It’s unclear whether Mockingbird’s cultivation license covers the former plant nursery where inspectors found issues. The site, at a property called Standing Pine, is about 12 miles away from Mockingbird’s licensed indoor growing facility outside Raymond, which is listed as its “physical address” on the state’s registry of medical marijuana cultivator licenses.
Cultivators are allowed only one growing license. Mockingbird says its license covers the Standing Pine site on Parsons Road as well as its main indoor growing facility on Springridge Road. Patterson said Mockingbird clearly stated in its application that it planned to use the Standing Pine location and supplied multiple photos, including pictures of the greenhouses it planned to use, and other information in its roughly 700-page application.
Competitors say this is bunk, that cultivation licenses are supposed to be for one location, and that they were told they couldn’t grow in greenhouses.
Wilson said he had bought 15 greenhouses before the medical marijuana program was up and running, but was later told by the Health Department he couldn’t use them, so he built a structure with 7-foot tall steel walls. He said another grower he knows was also not allowed to use greenhouses he had.
Growing in greenhouses allows faster, cheaper growth of a type of marijuana plant that can be used for processing into edibles and other products. In legislative debate and hearings on medical marijuana, proponents assured reluctant lawmakers that the state’s program would be secure and strictly regulated and growing would be “indoors” to provide more security, prevent contamination and make regulation easier. At the time, farmers in the Delta complained that they were being shut out of the program in part because of the high cost of constructing such facilities.
“I have five different places I would love to grow at right now, but they wouldn’t let me grow at five different addresses,” Wilson said. “We were told it all has to be at the same location … If somebody puts in a 770-page application, that’s not an application, that’s trying to blanket them with paperwork … What if I put something in my (application) that I wanted to use butt-naked school children for cultivation and they didn’t catch it? Just because you put something in there and the department overlooked it doesn’t mean it’s right.”
The department’s public registry of licensed cultivators lists Mockingbird’s cultivation facility for its license as “physical address” 1577 Springridge Road. State regulations say, “A license shall be issued for the specific location identified on the application, and is valid only for the owner, premises and name designated on the application and Department issued license and the location for which it is issued.” Patterson points to this regulation as allowing the Standing Pine cultivation on Parsons Road. Others point to it as clearly not allowing it.
State Rep. Lee Yancey, one of the lead drafters of the state’s Medical Marijuana Act, declined to answer most questions about the issues with Mockingbird. He said for now the Health Department is in charge of interpreting what the rules are and that, “If the statute is not clear enough, we will address it (in the Legislature).”
As for growing facilities, Yancey said, “My understanding was that it was to be an enclosed, locked facility, but how you define that — I guess that’s the issue. Right now, the Health Department will interpret what that means … I think the legislative intent was walls and a ceiling and a floor … We will be looking at tweaks to things in January.”
Sen. Kevin Blackwell, the lead drafter of the legislation, could not be reached for comment and did not respond to a message seeking an interview.
‘Hoop houses’ and ‘Dutch sunhouses’
Patterson, in a lengthy telephone interview with Mississippi Today with a Mockingbird lobbyist listening in, said he believes his company has been compliant with all regulations and “they had some corrective action for us and we complied … very, very quickly.”
“They made it very clear they weren’t issuing violations, they were issuing a corrective action,” Patterson said. “… When we applied, we were very upfront about what we were going to do and where we were cultivating. We spent $30 million in the state of Mississippi, and we hired Mississippi people and we bought our supplies in Mississippi and we did this before there was a program, because we believed in the voice of the people in wanting this law passed — they voted resoundingly on Initiative 65, a mandate … This is typical in this industry that when a program starts, whoever has taken that calculated risk, the competitors will typically complain.”
During the lengthy interview, Patterson explained that “our main structure (at Standing Pine) is a Dutch-style sunhouse, that has a permanent foundation, like a foundation you would see in a house — concrete, plumbed, has drainage in it and permanent structured walls, has retractable function.”
“When they approved our application, we assumed we were good,” Patterson said. “But when they came back out, they want hard plastic on the walls.”
Patterson said he was unfamiliar with details of Health Department photos showing walls with no covering or with thin, clear, plastic or torn cloth tarp covering. But he said all the buildings are being secured per Health Department requests and follow-up, including a teleconference between the department and Mockingbird officials.
Patterson denied that Mockingbird had been growing marijuana in “hoop houses,” which are half-circle shaped greenhouses made of curved tubing and covered in plastic sheeting.
“Greenhouses are fundamentally different than hoop houses,” Patterson said. “… We are only growing in greenhouses that have concrete foundations with draining and plumbing.”
But when sent a copy of a photo of a hoop house with open walls with marijuana plants growing at Standing Pine that was supplied to Mississippi Today, Patterson corrected his earlier statements.
“As to the picture, I’ve asked internally and it appears that was a staging area staff set up this summer to apply (plant tracking) tags,” Patterson wrote in a text message after the interview. “We spotted that with our own internal controls. Management at the facility identified that was not an appropriate building, and all plants were moved. Again, we found that ourselves. Those plants weren’t there when Dept of Health inspected us and they aren’t there today. We never flowered plants in that building.”
Also during the interview, Patterson said the medical marijuana law passed by the Legislature refers to greenhouses and 3-foot tall walls with retractable tops in the definition of acceptable growing facilities. But later, he messaged: “I checked with our legal folks and the words greenhouse and three-foot high walls was in earlier drafts, but was not in the final bill.
“However, to be clear, the definitions do allow for a permanent grow house that we operate, and as I mentioned previously, we did show the department exactly where and how we intended to grow.”
During his interview, Patterson repeatedly referred to Mockingbird’s 163,000 square-foot facility that once housed the state Department of Revenue on Springridge Road as “our indoor facility,” and said no plants were ever transferred from Standing Pine to the Springridge Road building.
“The idea that we would do that and expose plants to spiders, mites and pests and then move them to our indoor facility where it’s completely pristine … the idea that we would do that and expose our indoor to all those pollutants is ridiculous,” Patterson said.
But when asked if that meant he considered Standing Pine to be outdoor growing, Patterson said, “I’ve never called Standing Pine outdoor. A greenhouse is considered indoor in the industry. Outdoor is in a field, row cropping.”
Corrective actions, plants harvested
It’s unclear what, if anything, the Health Department — which didn’t want the task of regulating medical marijuana in the first place — will do, beyond sending Mockingbird Cannabis LLC the Sept. 21 letter telling it to take “corrective actions.”
Health Department spokeswoman Liz Sharlot, when Mississippi Today asked to interview someone at the department, initially said, “I am always happy to answer any written questions.” But after being provided written questions, she said, “I am unable to answer your questions at this time as this is an ongoing investigation.”
But the Health Department’s letter to Mockingbird didn’t indicate any ongoing investigation and said, “Please notify our office, in writing, of completion of Mockingbird’s corrective actions and provide documentation and timelines of actions taken.”
Mockingbird responded in writing to the Sept. 21 letter on Oct. 3, noting that, “While I understand that our inspection was instigated by false, anonymous accusations submitted to your department, we are nevertheless pleased that you were able to tour and inspect both of our cultivation facilities and welcome any suggestions for improvement.”
The company said it had immediately tagged the untagged plants inspectors found and “processes have been updated to ensure no future delays in applying tags.”
The company also said it has hired a new security company — prior to the inspection — and is beefing up security at Standing Pine, including “increased internet capacity, installed additional camera systems, and ordered updated siding and doors for certain greenhouses” and that it will not add new plants there until everything is updated.
“Per our discussion, Mockingbird will harvest the majority of plants at the greenhouse facility today, emptying the largest greenhouse and preparing it for security updates,” the letter said. “We have also worked to update security at the three smaller greenhouses on the property to hold any remaining plants that could not yet be harvested.”
‘This will put other people out of business’
The regulations the Health Department helped promulgate and is supposed to enforce have a “Schedule of Disciplinary Actions” including large fines, suspension or revocation of licenses for a variety of first, second and third violations. Its rule says, “In addition to any applicable criminal actions, the following schedule shall be used when administratively disciplining medical cannabis establishments for violating statutory and/or regulatory requirements.” It says the department has the right to increase the penalties based on aggravating circumstances but does not address waiving the penalties that “shall be used.”
Those penalties include a fine of $5,000 for first offense “Failure to comply with security requirements,” a fine of $5,000 for “Failure to accurately track inventory,” and a $10,000 fine and one week suspension for “Willful failure to accurately track inventory.”
Activities outside of the rules, state regulations say, “may be considered suspected illegal activities and reported to proper authorities as such.”
Wilson said Mockingbird being allowed to harvest the greenhouse plants means, “They were given a head start, a huge advantage over everyone else in the state.”
“They grew enough marijuana in that one grow to fully stock every dispensary — millions of dollars worth,” Wilson said. “… It’s funny, they were the ones that lobbied to get all these rules into place to make it harder for a small guy like me to get a license. Everything has to be indoor with solid walls … But then they just drown the state with paperwork and call their greenhouses indoors. No, hell, it’s not … If that place is legal, how come it’s not finished out yet?
“Yes, this will put other people out of business,” Wilson said. “What they have done is crush the small Mississippians in this business.”