The root casue of this issue seems to be DNS related. The first tool I setup was on localhost and the other tools were on heroku using "custom domains". Redirecting to the custom domain on heroku just did not work, I ended up using the domain provided my heroku and it worked. Not sure if this is problem with heroku or the DNS resolution of the custom domain but either way the solutiion for me was to NOT use custom domains for the launch redirect. Hope it helps someone.
MoodleCloud
Multiple external tools using moodle cloud
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