By Rebecca Rivas, Missouri Independent
After The Independent published a report last week on a company which recruited license applicants from out-of state via Craigslist , a St. Louis legislator demanded that Missouri regulators look into what she called “egregious abuse” of social cannabis licenses.
St. Louis Democrat State Sen. Karla may sent a Letter to Missouri Attorney General Andrew Bailey and the Division of Cannabis Regulation on Thursday, demanding that they take action.
The microbusiness program was approved by voters in November last year as part of the constitutional amendment legalizing recreational marijuana. May wrote that this program was designed to “rectify injustices of the past” in marijuana criminalization.
May said, “I condemn these acts as an insult to the principles which guided the citizens initiative.” The people of Missouri have made it clear that they support a fair and inclusive cannabis industry which addresses historical disparities. It’s disheartening when bad actors try to exploit the system to gain personal benefit, thereby undermining opportunities that we worked to create.
May’s letter came hours after The Independent reported that a Michigan-based real estate group called Canna Zoned MLS offered to pay people who were eligible to enter lottery drawings for social equity licenses to be awarded in Illinois and Missouri.
Two applicants told The Independent they did not realize that the contracts of the company forced them to give up all control and profits.
On October 2, Missouri issued 48 licenses as the result of a state lottery. The winners were chosen to take part in Missouri’s Microbusiness Program. The Michigan group won two out of the 16 licenses, one in Columbia and another in Arnold.
May stated that “the schemes orchestrated by the applicants could involve fraudulent activities.” They were “gaming” the system in order to obtain licenses, leveraging the legacy advantages the ballot language was intended to reduce.
Jeffrey Yatooma is the designated contact for licenses related to the Michigan group. He told The Independent that “we reject any allegations that we have defrauded state.”
Yatooma, in response to May’s email, told The Independent that he still stands by the statements he made previously.
Amy Moore, Director of the Division of Cannabis Regulation, responded to May via a email on Friday morning.
Moore stated that the division shared the senator’s wish that the program “be implemented exactly as it was designed, and that unscrupulous individuals be permitted to subvert the laws.”
She said that the law mandated a verification process to determine whether microbusiness licences were granted to qualified applicants after licensure.
Moore stated that the division will complete its “post-licensure” verification for the 48 license recipients in early December. The results of this process will then be made public.
Moore stated that if we find that a license was issued on the basis of a false or misleading application, it may be revoked.
Investigations are conducted by the division with broad powers.
A new rule, which went into effect July 30, gives the Department the authority to subpoena licensed marijuana businesses or third parties to provide records and information during an investigation.
The rules stipulate that “Applicants and licensees are required to cooperate with any investigation by the Department.”
Moore wrote in her letter that the division would refer any information “that we believe is concerning but not within our jurisdiction” to the proper authority.
The Attorney General’s Office, which received the same letter, has not responded to a comment request.
Ashley Bland Manlove, a Kansas City Democrat and state representative, read The Independent’s piece. She called the actions “predatory” and “criminal.”
She said: “I urge all states to revoke licenses and issue them to real residents who meet the requirements.” “I would like to see criminal prosecutions for the attorneys who created the Craigslist fraud posts and the Craigslist contacts.”
Jack Cardetti, spokesperson for the Missouri Cannabis Trade Association said that it was up to the division to verify the laws and regulations were being followed.
He said that Article 14 of the Missouri Constitution gives the agency the responsibility to implement the program approved by the voters. “We hope they do this,” he added.
This article was originally published by The Missouri Independent.
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