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Oct. 17, 2023 |  By: Rebecca Rivas - Missouri Independent

Missouri regulators aware of ads seeking to sell microbusiness cannabis licenses

marijuana

By Rebecca Rivas - Missouri Independent

Missouri’s Division of Cannabis Regulation said last week that it’s “become aware” that some people who recently received small-scale cannabis business licenses — which are meant to boost opportunities for businesses in disadvantaged communities — are now trying to sell them. 

On Oct. 2, the state issued 48 licenses to the winners of a lottery that determined who gets to participate in Missouri’s microbusiness program. 

The division warned in a guidance issued on Oct. 10 that if winners try to sell the licenses, the businesses must continue to be majority owned and operated by individuals who meet the eligibility qualifications. 

There are seven categories where people could qualify for a microbusiness license, ranging from having a lower income level or living in an area considered impoverished to having past arrests or incarcerations related to marijuana offenses. 

When asked how many licenses the division is aware of being posted for sale, spokeswoman Lisa Cox said in an email to The Independent that the division is “aware of two advertisements.”

“We spoke directly with the licensees, and they explained they are seeking investors and do not intend to sell the licenses prior to becoming operational or without department approval,” Cox said. “Seeking additional investors prior to being operational is allowed, if the change in ownership does not exceed 50%.”

In the guidance, the division said any application to change ownership “must also include eligibility documentation for any new individual whose voting or financial interest will contribute to majority ownership.”

If ownership changes hands without the division’s approval, it “may result in penalties, including fines, suspension or revocation.”

The microbusiness program was approved by voters in November through the constitutional amendment that legalized recreational marijuana.

“It is imperative that the microbusiness program operate as the voter-approved law was intended,” division Director Amy Moore said in a press release Friday. “Regulations around microbusiness ownership ensure marginalized or under-represented individuals are leading and benefiting from this portion of the legal marijuana market.”

The division posted the list of the final winners on Oct. 2, but not much is known about them. While the division normally posts contact information for licensed facilities on its website, it didn’t do so with the microbusiness license holders. 

Cox said the division is working on posting that information. 

Six winners were selected in each of Missouri’s eight Congressional districts. 

Of the six in each district, two will be microbusiness dispensaries, and four will be microbusiness wholesale facilities – where the owners can grow up to 250 plants.

In many cases, the winners – including names like “Cannarooted LLC” and “Frankenstein Enemy, LLC” — are not names registered as legal businesses in the state of Missouri. 

In one district, the winner is nameless and only identified as “individual.” 

John Payne, founder and managing partner at Amendment 2 Consultants, said he worked with a number of clients who applied for microbusiness licenses throughout the state. None of his winning clients are trying to sell their licenses, he said, but he’s aware that “some licenses are being shopped.”

In total, the state received applications from 1,625 people from July 27 to Aug. 10. 

The state has not yet said which categories of eligibility were the most prevalent in the applications, but it will likely be included in the chief equity officer’s annual report due by Jan. 1.

Any applicant not chosen by lottery is eligible for a refund of the $1,500 application fee, which must be requested by submitting a microbusiness application refund request form. Requests for a refund will be accepted beginning Nov. 2, and the microbusiness application refund request form and refund instructions will be available on the division’s website by that date.

An additional 48 licenses will be issued in both 2024 and 2025. For more information about microbusiness licensing and application requirements, visit Cannabis.Mo.Gov.