Missouri’s cannabis industry is the new “gold rush,” said St. Louis couple Tiffany and Anwar Lee, and they’re considering buying a ticket for the lottery to get in.
Their ticket is a $1,500 application fee for a spot in a lottery making them eligible for a limited number of cannabis microbusiness licenses, and it’s refundable if they don’t get picked. The program is meant to boost opportunities in the industry for businesses in disadvantaged communities, and it was part of the constitutional amendment to legalize recreational marijuana that voters passed in November.
“In that industry, there’s going to always be room to make money, or at least to maintain a decent standard of living,” Anwar Lee said during an interview at an outreach event in St. Louis last month organized by state marijuana regulators.
The Lees were among those gathered at the event to hear from Abigail Vivas, Missouri’s new chief equity officer, who addressed the eligibility requirements for a microbusiness license. She held three other outreach events recently in Jefferson City, Lee’s Summit and Springfield.
But even if the Lees meet the eligibility requirements, their shot at winning is slim.
In August, six license winners will be picked by the Missouri Lottery in every one of the state’s eight Congressional districts in Missouri — for a total of 48 licenses. In each district, two will be for dispensaries and four will be for wholesale/grow licenses.
Vivas, who oversees the microbusiness program through the cannabis regulating agency within the Dept. of Health and Human Services, estimates there could be up to 5,000 applicants statewide. But she’s heard other estimates that it could be 1,000 per congressional district.
Not A Minority Program
As proponents of the marijuana legalization amendment were making their case to voters last year, the microbusiness program was the primary retort when opponents argued the law would cement an already distrusted, inequitable business licensing system in place in order to ensure the rich just get richer.
Supporters boasted that the microbusiness program will be the first of its kind in the nation and will help diversify the White-dominated industry.
However, Vivas said that goal wasn’t exactly spelled out in the constitution.
“Equity is not really mentioned in the microbusiness program, as far as the constitution is concerned,” Vivas said, “but I think that’s where we go back to the spirit of things.”
Adolphus Pruitt, president of the St. Louis City NAACP and one of the drafters of the microbusiness provision in the legalization amendment, said the word “equity” doesn’t need to be in the constitution’s definition of the microbusiness program.
“When you look at the categories and the qualifications, there’s no doubt that overwhelmingly the qualifications are geared up for people who were impacted by the unjust enforcement of marijuana laws,” Pruitt said. “No one would dispute that that population, in most cases, are African Americans.”
In his conversations with DHSS leaders and Vivas, Pruitt said state regulators are “clear” on that point as well, but qualifications allowing disabled veterans and anyone with a net worth of less than $250,000 to apply, certainly there will be a lot of non-minority candidates, eligible to, and applying for the licenses.
Not everyone is eligible to apply. There are seven categories where people can qualify for a microbusiness license.
– if they have a net worth less than $250,000 and earned less than 250 percent of the federal poverty level in at least three of the past 10 years.
– if they, or a parent, guardian or spouse, have been arrested, prosecuted or convicted of a non-violent marijuana offense, as long as the offense didn’t involve providing marijuana to a minor or driving under the influence. The arrest, charge or conviction must have occurred at least one year before recreational marijuana becomes legal.
– if they’re a disabled veteran.
– if they live in a financially disadvantaged ZIP code where 30% or more of the population lives below the federal poverty level, where the rate of unemployment is 50% higher than the state average rate of unemployment, or where the rate of incarceration for marijuana-related offenses is 50% higher than the rate for the entire state.
– if they graduated from or lived in ZIP code with an unaccredited school district for three of the past five years.
In addition to not being a minority-exclusive program, some critics say the microbusiness licenses create an unequal class of businesses that will have to compete with large, well-known brands that were allowed to sell recreational marijuana several months before microbusinesses had any chance at a license.
Others worry how microbusinesses will sustain themselves in the long run.
Microlicense brands can only sell to and purchase from other Missouri microlicensees. This may be difficult, especially in the early stages, with only four growers per congressional district each limited to growing no more than 250 plants.
But unlike the requirements for medical marijuana licenses, there is no liquidity requirement for microbusiness applicants. In other words, applicants do not have to have a certain amount of cash to be eligible.
“This gives leverage to applicants who would otherwise have to give up a portion of their ownership interest in order to get the money they needed up front to show on their license application,” McCracken says.
Applications are also unscored (the medical license scoring drew complaints and even lawsuits).
Some cannabis consultants are advising applicants to apply in more rural districts where they’ll be more likely to receive a license. There are no residency requirements. Out-of-state applicants are also eligible.
If you’re interested in applying, you can go online to: https://bit.ly/3CWDGQT.
Amy Moore, director of the Missouri Division of Cannabis Regulation, told the Springfield News-Leader that, “This is the first implementation of a new applicant type, and it is an application type for which we are instructed to provide technical assistant other resources to ensure eligible applicants are successful in navigating the process. We want to do everything in our power to ensure we are fulfilling the responsibility, and allowing for more time in the application processing time period is one way to do that.”
More to Know About Missouri Cannabis Microbusiness Licenses
A microbusiness is a marijuana facility license issued only to eligible individuals and entities. They are limited in scope and size.
There are two types of microbusiness licenses: Dispensary and wholesale. Wholesalers can cultivate and manufacture marijuana products. Cultivators are limited to 250 flowering plants at any time.
The application acceptance period for the first round of microbusinesses will be July 27 through Aug. 10, with applications only accepted through the online registry portal. First round licenses will be issued in October 2023.
The state will issue microbusiness licenses in three different rounds throughout the next few years, with up to 144 microlicenses awarded by 2025.
For any outstanding questions, reach out to the Facility Application Services Unit at CannabisFAS@health.mo.gov.
There are felonies that disqualify people from applying.
By law, microbusiness applications are selected via random lottery drawing.
Individuals can only apply for and receive one license.
The microbusiness application fee is $1,500. If you don’t receive a license, you can apply for a refund of the application fee.