Social Equity Or Greedy Play? Missouri's Cannabis License Controversy Heats Up

Missouri cannabis regulators are on the brink of revoking 11 social-equity cannabis licenses, including nine dispensaries and two wholesale facilities. Among the companies involved is Canna Zoned, a Michigan-based firm that secured two licenses in Columbia, and Arnold and Cannabis Business Advisors, an Arizona-based consulting firm.

Investigation Reveals Misleading Agreements

Canna Zoned was connected to 104 of the 1,048 dispensary license applications. A Missouri Independent investigation found that applicants, some recruited through Craigslist, believed they were partnering with the investor although they were actually signing away control and profits.

Similarly, Cannabis Business Advisors was linked to over 400 applicants, including six winners, whose eligibility could not be certified. Missouri firm Amendment 2 Consultants also faced eligibility issues with its applicants.

Social Equity Program’s Integrity Questioned

Abigail Vivas, overseeing the Missouri Department of Health and Senior Services’ microbusiness program, reported ineligibility due to insufficient documentation and failure to verify majority ownership criteria, according to KOMU. The program, part of a constitutional amendment to legalize recreational marijuana, aims to assist disadvantaged communities.

State Senator Demands Investigation

Following Missouri Independent’s story, state Senator Karla May demanded an investigation into the exploitation of social-equity cannabis licenses. The department completed its review on December 1, highlighting the possibility of revoking licenses that fail to meet the criteria.

Canna Zoned Responds To Allegations

In response to Benzinga’s request for comments, Canna Zoned’s general counsel Amanda Kilroe brought up the company’s commitment to state regulations and the social equity program. Kilroe emphasized the impact revoking these licenses would have on both its operations and the social equity applicants it supports.

Canna Zoned also shared with Benzinga concerns about lottery winners and social equity applicants working with them, Aric Rybacki and Curries Floyd. Rybacki described the potential revocation as devastating, highlighting the personal significance of this opportunity.

Floyd, a veteran, expressed disappointment at the state’s actions, which he believes contradict their intent to uplift individuals like him.

Cannabis Business Advisors has not yet responded to Benzinga's inquiry for comments.

Next Steps In License Review Process

Missouri regulators provided a 30-day response period for licensees to prove eligibility. Revoked licenses will join the pool for upcoming lotteries, with at least 96 additional microbusiness licenses to be issued.