Missouri Marijuana Regulators Say A Quarter Of Microbusiness License Winners Are Ineligible

Issues included “failure to provide documentation that the facility would be operated by eligible individuals.”

By Rebecca Rivas, Missouri Independent

Missouri cannabis regulators may revoke 11 of the 48 social-equity cannabis licenses issued in October after finding they didn’t meet eligibility requirements.

Nine were dispensaries and two were wholesale facilities.

Among those who could face license revocation is Canna Zoned, a Michigan company that secured two of the 16 dispensary cannabis licenses—in Columbia and Arnold.

Both of Cana Zoned’s licenses have been deemed ineligible, according to information the state provided to The Independent Friday evening.

State records show Canna Zoned was connected to 104 out of the 1,048 applications that were entered into a lottery selection for the dispensary licenses. An investigation by The Independent in October found applicants thought they were partnering with the Michigan investor but in reality signed agreements requiring them to relinquish all control and profits of the business.

Some applicants were recruited through Craigslist ads from around the country.

Another company that used the strategy of flooding Missouri’s lottery with applications was an Arizona-based consulting firm called Cannabis Business Advisors. It was connected to more than 400 dispensary applicants, including six winners.

The state couldn’t certify the eligibility for all six of the licenses connected to the firm’s clients.

A Missouri firm, Amendment 2 Consultants, is connected to more than 80 dispensary applicants and two winners. One of the group’s dispensary applicants was deemed ineligible.

Abigail Vivas, who oversees the microbusiness program under the Missouri Department of Health and Senior Services as chief equity officer, said in a report released Friday that the ineligibility issues included “failure to provide documentation that the facility would be operated by eligible individuals.”

The microbusiness program is meant to boost opportunities in the industry for businesses in disadvantaged communities, and it was part of the constitutional amendment to legalize recreational marijuana that voters passed in November.

Following The Independent’s October report, state Sen. Karla May, a St. Louis Democrat, demanded the state investigate what she called an “egregious exploitation” of social-equity cannabis licenses.

The other eligibility issues cited in the report included failure to provide adequate documentation to verify the majority owner met the eligibility criteria and for a disqualifying felony offense.

The constitution mandates the chief equity officer conduct an eligibility review within 60 days of the microbusiness licenses being issued and make the results available to the public.

The review was completed December 1, according to a department press release Friday.

Licenses that are not certified may be revoked, and notices of pending revocation provide a 30-day response period, according to state marijuana rules.

During that 30-day window, licensees can submit records or information demonstrating why they are eligible and should not have their license revoked. All revoked licenses will be added to the available licenses awarded in the next application timeframe, the press release states.

The department will issue a minimum of 96 additional microbusiness licenses in two separate lotteries conducted by the Missouri Lottery. Applications for the second of three total rounds are tentatively scheduled to begin in March 2024 with licenses to be issued in July.

This story was first published by Missouri Independent.

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