Missouri Regulators Deny Certification Of Most Marijuana Social Equity Microbusiness License Winners

“Most of us feel like this is a social-equity program to benefit people that are socially disadvantaged, not a way for millionaires to get richer.”

By Rebecca Rivas, Missouri Independent

David Huckins, a disabled veteran from Leavenworth, Kansas, threw his name into the lottery this spring for a chance to win a social-equity marijuana dispensary license in Missouri.

In June, he learned he landed one of 57 microbusiness licenses meant to benefit disadvantaged business owners—including disabled veterans, those with lower incomes and people with nonviolent marijuana offenses.

The microbusiness program was part of the constitutional amendment to legalize recreational marijuana that voters passed in 2022.

Huckins was among one of the 24 dispensary licenses and 33 wholesale licenses for cultivation facilities handed out as part of a second lottery held in June—out of more than 2,000 applicants.

But Huckins wasn’t officially in the clear until Thursday afternoon, when he received a notice that he passed the rigorous review process to confirm his eligibility.

For him, it wasn’t a surprise.

“I got a letter from the Department of Veterans Affairs saying that I have a disability rating that qualifies me for the application process,” he said. “This one was a slam dunk for the state, I feel like.”

Huckins was an outlier, with only seven of the 24 dispensary licenses that managed to get certified by the Division of Cannabis Regulation on Thursday afternoon, according to the division’s report.

The other 17 dispensary license winners were deemed ineligible, largely because of “failure to provide adequate documentation” that the licensee met the criteria.

Fifteen of the 33 wholesale licenses needed to create marijuana grow facilities were deemed ineligible as well.

That means less than half—25 of the 57 licenses—were certified.

That’s a significant decrease from the first round, issued last October, when 37 of the 48 were certified. Out of the 11 that weren’t, nine of them were eventually revoked.

While on the surface it sounds like a problem of technicalities, it could speak to the larger problem of the predatory practices surrounding Missouri’s microbusiness licenses—which the division itself has warned about.

“My first impressions are that most of the licenses that weren’t issued,” Huckins said, “were probably due to people or groups with vast resources that have tried to cheat the system by putting in sometimes hundreds of invalid applications.”

The division declined to provide The Independent with a list of the certified licensees.

However, of the 24 dispensary licenses selected through the lottery in June, The Independent has identified 14 that are likely connected to groups cannabis regulators have cracked down on previously.

The groups include investors from Arizona, Michigan and within Missouri accused of using disadvantaged people as fronts to gain licenses. The strategy involves recruiting applicants to flood the lottery and increase chances of winning.

The Independent has obtained contracts that these groups have circulated to potential applicants, revealing the investors are aiming to shut out the disadvantaged applicants from most of the profit and control of the business.

Lisa Cox, spokeswoman for the division, said the licensees who weren’t certified today were sent notices of pending revocation.

They will have 30 days to respond to the division’s concerns, “during which licensees may submit records or information demonstrating why the license should not be revoked,” she said.

In the first round, it took about three months after the notices were issued to confirm those being revoked, Cox said.

For Huckins, the entire situation is problematic.

For one, he said, it means less growing facilities that the dispensaries will be able to rely on. But it also impacts the dynamic of the microbusiness marijuana community. Huckins hosts weekly calls among the licensees so they can share knowledge and help each other.

“The general feeling in the community among other people like myself,” who aren’t connected to big investors, he said. “Most of us feel like this is a social-equity program to benefit people that are socially disadvantaged, not a way for millionaires to get richer.”

This story was first published by Missouri Independent.