{"id":73852,"date":"2024-04-08T11:41:35","date_gmt":"2024-04-08T19:41:35","guid":{"rendered":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2024\/04\/08\/missouri-warns-marijuana-license-applicants-of-predatory-practices-around-social-equity-status\/"},"modified":"2024-04-08T12:45:15","modified_gmt":"2024-04-08T20:45:15","slug":"missouri-warns-marijuana-license-applicants-of-predatory-practices-around-social-equity-status","status":"publish","type":"post","link":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/2024\/04\/08\/missouri-warns-marijuana-license-applicants-of-predatory-practices-around-social-equity-status\/","title":{"rendered":"Missouri Warns Marijuana License Applicants Of \u2018Predatory Practices\u2019 Around Social Equity Status"},"content":{"rendered":"<\/p>\n

\u201cYou have to ask yourself\u2014if it\u2019s that competitive on the microbusiness licenses, then really what\u2019s going on?\u201d<\/em><\/p>\n

By Rebecca Rivas, Missouri Independent<\/strong><\/p>\n

Veterans John and Kara Grady received a Facebook message last week from a man who was \u201clooking for a female veteran to be part of our dispensary license.\u201d<\/p>\n

Being a veteran is one of the seven categories that makes people eligible to win one of the state\u2019s social-equity marijuana licenses<\/a>, called \u201cmicrobusiness licenses.\u201d The other categories range from having a lower income or living in an area considered impoverished to having past arrests or incarcerations related to marijuana offenses.<\/p>\n

When the Gradys\u2014who run Slaphappy Beverage Co., which sells hemp-derived THC drinks\u2014turned him down, the man began attacking them on their social media pages.<\/p>\n

\u201cI was like, \u2018What kind of tactics are these?\u2019\u201d John Grady said in an interview with The Independent. \u201cYou have to ask yourself\u2014if it\u2019s that competitive on the microbusiness licenses, then really what\u2019s going on?\u201d<\/p>\n

Just hours before Grady received that message, the Missouri Division of Cannabis Regulation issued a warning about \u201cpredatory practices\u201d in social-equity marijuana licensing throughout the country.<\/p>\n

And those tactics are likely escalating, with the next round of applications running April 15 to 29.<\/p>\n

\u201c[The Division of Cannabis Regulation] has become aware of solicitation efforts by companies to apply for microbusiness licenses on behalf of qualified individuals with promises of future ownership in the license,\u201d the agency said in a press release last week.<\/p>\n

The division warned that some groups are scamming eligible people by giving them, \u201cno agreements in place that would actually result in the eligible individuals being the owners of the license.\u201d<\/p>\n

The division recently revoked nine of the 48 social-equity cannabis licenses<\/a> issued in October\u2014following an investigation by The Independent that found some applicants thought they were partnering with the Michigan investor<\/a> but in reality signed agreements requiring them to relinquish all control and profits of the business.<\/p>\n

The revocations came just as the division was gearing up for the second round of microbusiness applications, and now the state is urging applicants to be extra careful regarding whom they partner with.<\/p>\n

\u201cEligible individuals should exercise caution in accepting such arrangements as some of the solicitations may be predatory in nature,\u201d the division\u2019s Thursday press release<\/a> states.<\/p>\n

Because only 39 of the 48 microbusiness licenses were ultimately issued from the first round, the division will award one additional wholesale license and eight additional dispensary licenses in the upcoming round.<\/p>\n

The owners of the revoked licenses have vowed to appeal, though nothing has been filed as of yet.<\/p>\n

Guidance from state regulators<\/strong><\/p>\n

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<\/a> in November 2022.<\/p>\n

The program was designed for these licensees to hopefully develop their businesses, so it will put them in a good position to obtain regular licenses, or what the state calls comprehensive licenses.<\/p>\n

By law, the state cannot issue any new comprehensive licenses until June 2024. If the state decides to allow for more regular licenses at that point, then 50 percent of them must go to microbusiness license holders.<\/p>\n

\u201cThe clear intent [of the constitution] is that a microbusiness license should provide a path to facility ownership for individuals who might not otherwise easily access that opportunity,\u201d the division\u2019s press release states.<\/p>\n

The microlicenses must always be majority owned and operated by people who meet the eligibility criteria.<\/p>\n

The division gave examples of behaviors that may indicate predatory arrangements:<\/p>\n