Missouri’s microbusiness cannabis licensing program, designed to help victims of the War on Drugs, has been clouded by controversy, as out-of-state companies and industry insiders exploit local applicants to gain control of licenses.
Recent investigations published in the Kansas City Star have revealed that nearly half of the social equity licenses awarded in the Kansas City area went to companies registered out of state, including several ‘secretive’ limited liability companies based in Wyoming, where ownership information is shielded.
This development has sparked concerns about predatory practices and whether the licenses are truly benefiting disadvantaged communities.
One prominent case involves Destiny Brown, a disabled veteran who was recruited by cannabis investor Michael Halow.
Halow promised her financial backing to run a dispensary, but Brown later discovered the fine print in her contract gave Halow full control of the business.
Halow’s felony record disqualified him from directly holding a license, so he used Brown’s qualifications as a front to secure the license. Once Brown became aware, she hired a lawyer and submitted documents to Missouri regulators, which led to the revocation of six licenses connected to Halow.
This type of exploitation is not an isolated case. Out-of-state companies have flooded the social equity licensing process, submitting hundreds of applications, often using disadvantaged individuals as strawmen to secure licenses.
In fact, earlier this year, Missouri regulators revoked nine out of 48 social equity permits awarded after discovering similar predatory arrangements involving companies from Arizona and Michigan.
The Kansas City Star reported that 15 microbusiness licenses were awarded in the Kansas City area, and half of those went to out-of-state entities, raising further questions about the integrity of the program.
In response, Missouri’s Department of Health & Human Services (DHSS) is currently conducting a two-month verification process to ensure that the winners meet eligibility requirements.
Despite these efforts, critics fear that the third round of social equity licensing, planned for 2025, will face the same issues as the first two rounds, where local applicants were overshadowed by moneyed interests from out of state.
The post Controversy Surrounds Missouri’s Microbusiness Cannabis Licenses as Outsiders Profit appeared first on Business of Cannabis.
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