Missouri’s booming cannabis industry will soon welcome new players. But far fewer people will be allowed to enter than the large number looking for a way in.
The state received 1,601 applications from Missourians who want to operate microdispensaries or microfacilities to grow or manufacture marijuana products, according to the Division of Cannabis Regulation. Only 48 applications will be accepted through a lottery process in October.
The so-called microlicenses were a novel part of the constitutional amendment that legalized recreational marijuana in Missouri last December. No other state in the U.S. had taken such forward action to allow entrepreneurs from disadvantaged or marginalized backgrounds to enter the cannabis industry.
Many critics excoriated the licenses, saying they would constrain minority entrepreneurs. Microlicense holders, while earmarked for people from certain backgrounds and with lower requirements for capital, have fewer capabilities than operations with regular licensees. The businesses are “non-vertical,” meaning they can only either sell marijuana or cultivate it. A micro wholesale facility that cultivates or processes marijuana, for example, can’t sell its product to a non-microdispensary.
Yet demand for the licenses was relatively high compared to how many licenses will become available. Just 3 percent of all who applied will receive a microlicense in October.
Still, that margin is higher than what industry leaders expected.
Abigail Vivas, chief equity officer of the state’s cannabis program, said at a June outreach event that she expected 5,000 applications, but she had also heard other estimates that all eight of the state’s congressional districts could receive 1,000 applications each, the Missouri Independent reported.
Adolphus Pruitt, president of St. Louis NAACP, says he expected many more people would apply. He believes that the 1,601 applications represent a much smaller number of actual businesses.
“I guarantee husbands and wives, brothers and sisters submitted individually to help their odds,” Pruitt tells the RFT.
John Payne, a cannabis consultant and major proponent of cannabis legalization in Missouri, says “pooling strategies” are legitimate under the laws governing the program, but each candidate would have to meet one of the qualifying criteria spelled out in Amendment 3.
That might not be too hard. If an applicant had a nonviolent marijuana offense unrelated to distributing to a minor, for example, their spouse or any of their dependents would qualify for a microlicense because of that.
“That was by design,” Payne says. “The way we thought about it was, ‘Hey, all of those people had been negatively affected by marijuana being illegal.’”
Applications require a $1,500 fee, and while applicants will get that money back if they’re not lottery winners, they will need to resubmit their applications if they want to try again.
The state will issue microbusiness licenses in three different rounds throughout the next few years, with up to 144 microlicenses awarded by 2025. The second round of 48 microlicenses will be awarded in 2024 at a date to be determined by the state.
Pruitt hopes microbusinesses will take off. Eventually each of Missouri’s eight congressional districts will have 18 microdispensaries or manufacturing facilities.
And while these businesses can only work with each other, Pruitt sees the microlicenses as an opportunity for Missouri to gain a niche market that adds new variety to the industry.
“I think that the dispensaries and the growers have a relationship with each other will create an opportunity for some unique product to come into the marketplace that you won’t get anywhere else,” Pruitt says.
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