11 of Missouri’s 48 Cannabis Microbusiness License Winners Deemed Ineligible

Nearly a quarter of Missouri’s cannabis microbusiness license winners may never receive their permits to operate following a state-mandated eligibility review.

Missouri’s adult-use cannabis program launched in February through the state’s existing medical cannabis operators, and combined medical and adult-use sales have since surpassed $1 billion for 2023.

The Missouri Department of Health and Senior Services (DHSS) accepted applications for new microbusiness licenses during a two-week period that ran from late July through early August.

The licenses, meant for marginalized or underrepresented individuals looking to participate in Missouri’s cannabis industry, fall into two types: dispensary and wholesale. A microbusiness dispensary licensee can sell cannabis to both medical patients and adult-use consumers, and a microbusiness wholesale licensee can cultivate cannabis or manufacture products for both markets.

The Division of Cannabis Regulation (DCR), which operates within the DHSS, announced the names of 48 microbusiness license winners in October, roughly a month after random lottery drawings were held for a pool of more than 1,600 applicants.

Six microbusiness licenses were awarded within each of Missouri’s eight congressional districts, including two dispensary licenses and four wholesale facility licenses within each district, for a total of 16 dispensary licenses and 32 wholesale facility licenses.

The constitutional amendment that voters approved in the November 2022 election to legalize adult-use cannabis in Missouri mandates that individuals who meet at least one of several eligibility requirements can apply for a microbusiness facility license.

According to DHSS, the eligibility criteria for majority owners includes:

• Applicants claiming a net worth of less than $250,000 and low income
• Applicants claiming a service-connected disability
• Applicants claiming an arrest, prosecution or conviction for a nonviolent cannabis offense
• Applicants claiming residency in a ZIP code or census tract area where either 30% or more of the population lives below the federal poverty level or the rate of unemployment is 50% higher than the state average
• Applicants claiming residency in a ZIP code or census tract area where the historic rate of incarceration for cannabis-related offenses is 50% higher than the rate for the entire state
• Applicants claiming graduation from a school district that was unaccredited, or had a similar successor designation, at the time of graduation
  

Prior to awarding the licenses in October, the DHSS reviewed the applications drawn in the lottery to determine whether the applicants chosen were eligible to receive a license. Then, within 60 days of awarding the licenses, the state’s chief equity officer was responsible for conducting a review to certify that the microbusiness licenses were issued to eligible applicants.

The review was completed Dec. 1, and the DHSS announced Dec. 15 the published results of the eligibility review.

The results revealed that 11 of the 48 microbusiness license winners, including nine dispensary and two wholesale facility licensees, have been deemed ineligible and could have their awards revoked.

These licensees have 30 days to submit records or information demonstrating why the license is eligible and should not be revoked. All licenses that are revoked after the 30-day response period will be added to the pool of available licenses that will be awarded during the next application period.

The DHSS will issue a minimum of 96 additional microbusiness licenses in two forthcoming lotteries. The application period for the second of the three total licensing rounds is tentatively scheduled to open in March 2024, with licenses issued in July.

Issues resulting in licensees’ ineligibility included failure to provide adequate documentation to verify that the majority owner met the eligibility criteria selected on the application, a disqualifying felony offense, and failure to provide documentation that the facility would be operated by eligible individuals, according to the results of the review.