As the country further legalizes cannabis and simultaneously attempts to right the many systematic and societal wrongs of previous cannabis policies and prohibitions, the implementation of social equity measures in the usually flourishing cannabis industry is very necessary. To the some state’s credit, they have been passing widespread social equity measures within their own state’s industry. With the opening of various cannabis consumption lounges throughout Nevada, the state’s industry allocated a certain number of lounge licenses for those who may qualify as social equity applicants. Illinois announced a detailed social equity plan when they legalized in 2020 in which they support social equity applicants from offering the Direct Forgivable Loan Program and providing technical assistance in the always arduous licensing process.
Being the latest state to legalize, Missouri has seen astronomical initial sales within their own industry. With very generous daily purchasing limits of over three ounces in flower, Missouri cannabis businesses were able to sell over $250 million in adult-use sales just within the first three months of legalization. On average, the state is selling about $4 million in cannabis per day and a current total of 11,000 jobs have been created. The Show Me State is proof that even in states as otherwise conservative as Missouri, the cannabis industry could still be a tremendous success that reaps several layers of economic benefits.
However, although Constitutional Amendment 3 passed by a six percent margin, no social equity measures were included whatsoever in the legislation. There was an expungement clause of the legislation for Missourians previously convicted of victimless cannabis offenses to have their records cleared, but any language describing a social equity-like program as part of the Missouri cannabis industry is absent from the measure. To remedy this situation, Missouri cannabis regulators and state officials announced a cannabis microbusiness lottery to award 48 cannabis licenses to “marginalized or under-represented individuals.”
If all 48 licenses were surely guaranteed entirely to social equity applicants, then this would definitely be a major step forward in the name of equality of opportunity in this flourishing multi-billion dollar industry. Unfortunately, there may have already been misconduct occurring in this new application process, as a Missouri lawmaker recently wrote a letter to the state’s cannabis regulatory body, Missouri Division of Cannabis Regulation, alleging “egregious exploitation” occurring in this nascent application process.
State Senator Karla May wrote a letter on official Legislature letterhead directly to the director of the MDCR, Amy Moore, detailing the many damning details published in a Missouri Independent reporter Rebecca Rivas detailing the alleged exploitation. Even worse, the exploitation and deception weren’t even committed within Missouri’s borders, instead occurring in Michigan, Illinois and the borderless and lawless world of the internet.
“This article is highlighting some unscrupulous practices by certain applicants who, instead of contributing to the intended opportunities, have devised schemes to exploit and manipulate the system for personal gain.” wrote State Senator May. The practices detailed in the letter and in the report took place over unregulated and unmoderated “job boards” such as Craigslist. Apparently, applicants living as far away as northern Illinois were deceivingly used to apply for social equity licenses via “gig job” postings on Craigslist by supposed cannabis “real estate companies” such as the Michigan-based Canna Zoned MLS. One of the postings explicitly read: “If you are eligible and provide the required documentation, we will give you $2,000, just for helping us submit the lottery application! If we win the lottery and secure a license, we will give you an additional $20,000!”
However, there was a secretive and certainly exploitative clause in what Canna Zoned MLS wrote about them. Even if a potential social equity applicant found through these sketchy posts were to have total control over their application, they would receive no revenue or profits from the canna-business whatsoever. After the business passed through all the state and municipal approvals, the contract stated that the applicant must sell their share of the venture for $1 to Canna Zoned MLS or be held in breach of contract.
Furthermore, the contract allowed Canna Zoned MLS to use the applicant’s information to apply for social equity licenses in other states that the applicants may not even live in. Not too surprisingly, one of the social equity programs impacted by this deceptive fraud was Missouri’s microbusiness program.“The citizen-initiated ballot language, carefully crafted to level the playing field and create avenues for those historically marginalized by drug-related policies, has faced a blatant subversion by individuals seeking quick profits without genuine, long-term commitment to the cannabis industry.” wrote May. “These opportunistic actors have taken advantage of partnerships with qualifying individuals, acquiring licenses at a fraction of their true value and ultimately undermining the spirit and intent of the constitutional amendments.”
In the letter, May lists the many reasons why a thorough investigation is desperately needed in this dishonest matter, including fraud and deceiving both the licensing process and people who would be deserving social equity applicants otherwise. In fact, May is so dedicated to rectifying this cheating of the Missouri application process that the lawmaker that spent over a decade in the Missouri House of Representatives will be consulting with the highest legal office in the state.
“A copy of this letter will also be sent to the Attorney General of this state with the intended goal of curbing exploitative practices and reinforcing the commitment to fostering a diverse and inclusive industry that benefits all Missourians.”