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The state of Missouri recently awarded social-equity cannabis dispensary licenses to lucky lottery winners. Among them was David Huckins, a disabled veteran who learned in June that he’d be receiving 1 of 57 microbusiness licenses that the state stipulated would be awarded to disadvantaged business owners. Those who fit this description include disabled veterans, individuals with nonviolent cannabis offenses and those with lower incomes.
This program is part of the constitutional amendment to legalize the recreational use of cannabis that voters approved in 2022. Under the amendment, the program would award 33 wholesale licenses for cultivation facilities and 24 dispensary licenses.
Despite knowing that he was awarded the license, it wasn’t until last week that Huckins was notified that he’d passed the review process confirming his eligibility for the program.
A report released by the Division of Cannabis Regulation shows that only 7 of the 24 dispensary licenses were certified. The remaining winners of dispensary licenses were found to be ineligible, with the division noting that they failed to present sufficient documentation that they met the criteria. Additionally, 15 of the 33 wholesale licenses required to establish cannabis cultivation facilities were also rated ineligible.
This highlights the issues plaguing the microbusiness program, with some parties trying to cheat the system by submitting invalid applications. The Independent reveals that 14 of the dispensary licenses are likely linked to groups marijuana regulators have clamped down on previously. The groups include investors within the state as well as from Michigan and Arizona that have been accused of using disadvantaged individuals as proxies to acquire licenses. This practice involves recruiting applicants to apply for the lottery in large numbers to increase chances of winning.
In most cases, once the recruited applicants obtained licenses, investors often shut them out from the business, gaining full control and pocketing almost all if not all the profits.
Division spokesperson Lisa Cox announced that licensees that weren’t cleared received notices of pending revocation. Each licensee will have 30 days to respond to any concerns the division raised, during which they will be allowed to submit any information or records demonstrating why their licenses shouldn’t be revoked.
During the first lottery round, whose results were announced last October, it took roughly three months after issuing notices for the division to confirm revocation of licenses. In October 2023, 37 dispensary licenses were certified, with 9 out of the 11 remaining ones being revoked.
Established marijuana companies such as Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) operating in other jurisdictions are likely to applaud the measures taken in Missouri to keep undeserving individuals or entities from benefiting from the social-equity program intended to make some amends for the excesses of the era of marijuana prohibition.
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