‘Secretive’ Wyoming companies win Missouri marijuana social equity licenses

Applicants for adult-use marijuana social equity business licenses in Missouri are crying foul after it was revealed that nearly half the licenses awarded in the Kansas City area went to companies registered out of state.

According to The Kansas City Star, “secretive” limited liability companies registered in Wyoming won microbusiness permits over local, Black-owned operators.

Wyoming state law shields ownership information from being publicly disclosed.

Not Missouri’s first social equity controversy

This is only the latest round of controversy for adult-use social equity licensing in Missouri, where voters legalized recreational cannabis in November 2022.

Adult-use sales launched the following year at existing medical marijuana dispensaries.

This past March, Missouri regulators revoked nine of 48 social equity permits awarded in an initial round after it was discovered that companies based in Arizona and Michigan turned in hundreds of applications.

Accusations of predatory deals – where a moneyed interest used social equity-eligible applicants as strawmen – also have plagued the program.

Critics now worry that a third round of social equity licensing planned for 2025 will experience the same problems as the first two, according to the Star.

One lawmaker told the newspaper that the state’s cap on business permits was the catalyst for the “shady deals” clouding the limited number of available microbusiness licenses.

State still verifying eligibility

A spokesperson for the Missouri Department of Health & Human Services (DHSS), which regulates marijuana in the state, said the agency had verified eligibility for the 57 winners of a so-called microbusiness license.

Fifteen of those permits went to applicants seeking to open in Kansas City – and half of those were connected to companies based in Wyoming, the Star reported.

According to the newspaper, at least one of the licenses is connected to a person who owns a nightclub in Dallas.

However, the DHSS also is currently conducting a 2-monthlong “verification process” to ensure eligibility, spokesperson Lisa Cox told the Star.

Missouri residency not required

By law, states can’t favor local applicants over those from another market.

Cox also pointed to a 2022 U.S. Court of Appeals ruling that found residency requirements in Maine unconstitutional.

That case has led to other states ditching regulations that favor state residents – and a white couple based in Los Angeles to seek social equity permits nationwide.

Critics across the country have long said that well-intentioned social equity processes are too easily subverted by moneyed interests.

For example, nearly half the applicants for marijuana social equity licenses in Minnesota are from out of state, though regulators there said they will disqualify aspiring candidates connected with multistate operators or other owners that social equity programs are not meant to benefit.