Missouri poised to revoke 11 marijuana social equity licenses

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Missouri regulators could revoke up to 11 of the 48 marijuana social equity licenses issued earlier this fall after discovering the applicants were ineligible.

In October, the state issued 48 microbusiness licenses reserved for “marginalized and under-represented individuals” who were selected by lottery from a pool of more than 1,600 applicants.

Applicants needed to meet at least one of several criteria to be eligible.

But after an eligibility review, Abigail Vivas, chief equity officer for the Missouri Department of Health and Senior Services, “identified indications of ineligibility for two microbusiness wholesale licenses and nine microbusiness dispensary licenses.”

Vivas disclosed in a Dec. 15 report that the reasons for the ineligibility rulings included failure to:

  • “Provide adequate documentation to verify the majority owner met the eligibility criteria chosen at application.”
  • Disclose a “disqualifying felony offense.”
  • “Provide documentation that the facility would be operated by eligible individuals as required” by state law.

In at least two instances, out-of-state companies tried to win permits “flooding Missouri’s lottery with applications,” the Missouri Independent reported.

One of those, Arizona-based Cannabis Business Advisors, was connected to more than 400 applications, including six winners. The state couldn’t verify eligibility of all the winners, the Independent reported.

A second out-of-state company, Canna Zoned MLS of Michigan, submitted 104 applications and won two retail licenses.

The state has since ruled both operators ineligible, according to the Independent.

Earlier investigations found that Canna Zoned’s “applicants” signed predatory agreements that required them to “relinquish all control and profits of the business.”

The 11 licensees declared ineligible have 30 days to submit documentation demonstrating their eligibility.

If they can’t, their licenses will be revoked and reissued to eligible applicants.

At least 96 more licenses are scheduled to be awarded, also via lottery, beginning in March.

Missouri voters approved an adult-use market in November 2022, and sales launched in February at existing medical marijuana dispensaries.