The state's health department cited eligibility concerns, amid allegations of exploitation.
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Missouri regulators denied certification for a slew of social equity marijuana licenses issued in a recent lottery, citing eligibility issues.
The state health department announced last week that only 25 of the 57 microbusiness licenses issued in June were certified as eligible.
“Licenses that are not certified as eligible are subject to revocation,” the department said in a news release.
Licensees have 30 days to respond and “may submit records or information demonstrating why the licensee is eligible and should not be revoked.”
“All revoked licenses will be added to the available licenses awarded in the next application timeframe,” the state said.
The Missouri Independent found at least 14 of 24 dispensary licenses may be linked to groups previously flagged for using disadvantaged individuals as fronts.
Microbusiness licenses, created by Missouri’s 2022 marijuana legalization amendment, are meant to give smaller operators and disadvantaged individuals a path into the cannabis industry.
The state’s program distributes licenses across Missouri’s eight congressional districts, with each district receiving two microbusiness dispensary licenses and four microbusiness wholesale facility licenses.
The process has faced criticism, however. Last summer, critics questioned the data used to determine affected ZIP codes, arguing it failed to fully consider the impact of the war on drugs on disadvantaged communities.
That following October, the first round of microbusiness licenses was issued. Of the 48 licenses awarded then, 37 were initially certified. Nine of the remaining 11 were eventually revoked.
John Payne, a key figure in the 2022 legalization campaign, also has been criticized for actively playing the system to get in on the social equity scene. Payne, who is white, was tied to more than 300 social equity applications submitted earlier this year, winning six of the 24 dispensary licenses selected through the June lottery.
The Independent found that Payne’s company used contracts that would give him and his partners 90.1% of profits and majority control of some businesses, in conflict with the constitutional mandate requiring licenses to be “majority owned and operated” by eligible applicants.
The department ended up opening an investigation into three microbusiness licenses awarded last October and connected to Payne.
The state plans to issue at least 48 more microbusiness licenses in 2025, “after a third round of applications.”
There’s been no update on new Missouri state auditor Scott Fitzpatrick’s formal investigation into the state’s oversight of its medical and recreational marijuana industries, launched last August.
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