Jeanne Kuang
The Kansas City Star
WWR Article Summary (tl;dr) As Jeanne Kuang reports, “Those without ready capital face a steep climb for a spot in the legal market. Because weed remains illegal at the federal level, bank loans aren’t usually an option. Black-owned businesses in general face disproportionate difficulty securing financing, studies show.”
Kansas City
Marne Madison said she’s just about done trying to open a dispensary in Missouri.
The former president of Missouri’s chapter of Minorities for Medical Marijuana was denied two licenses in the state’s fledgling program, one for her own dispensary, the other for cultivation as part of a collective.
She said she lost $70,000 just putting together her dispensary license application.
Knowing that they would have to compete for a limited number of licenses, many applicants paid top dollar to consultants with experience in legal marijuana markets for help with applications and detailed business and security plans. Madison, a hotel night auditor at the time, also used savings to lease an empty building for months to show she had a location ready for operation.
Like many who were denied, she said high costs and license caps created an industry accessible only to those with money and connections. She’s disappointed that she doesn’t see more Black-owned marijuana businesses, given the disproportionate impact of the War on Drugs on communities of color.
Those without ready capital face a steep climb for a spot in the legal market. Because weed remains illegal at the federal level, bank loans aren’t usually an option. Black-owned businesses in general face disproportionate difficulty securing financing, studies show.
It was easier, Madison said, to get a dispensary license for lightly regulated Oklahoma, where she paid $2,500 for an application and received approval in 60 days. The nonrefundable fee in Missouri to apply for a license was $6,000 (it will be $3,000 next year) and annual renewal is $10,000.
“When we talk about facility ownership, we talk about a complete disconnection between those disenfranchised, disproportionately Black and brown families and this multimillion-dollar industry,” Madison said.
In Oklahoma, Madison sees an easier path toward ownership for Black entrepreneurs, calling its system a “game changer.”
Opposing views
John Mueller, CEO of Greenlight Dispensary, said he understands Madison’s view but doesn’t agree. Proponents of the current system are quick to point out that officials in unlimited-license Oklahoma are struggling to contain what they say are illegal operators who have taken advantage of lax regulations and low industry barriers to grow for the black market in other states.
A Missouri native, Mueller got into the business as an investor, then opened cultivation plants and dispensaries in Nevada and California. He sold his Las Vegas business for $70 million in 2019 before applying for licenses in Missouri. Greenlight’s indoor marijuana farm, in a converted industrial building in southeast Kansas City, is one of Mueller’s three cultivation facilities in Missouri. The company lists 15 dispensaries across the state and operations in three other states.
“Eighty-five percent of the people were unsuccessful in the application process, so I totally understand,” he said. “I think anybody that truly loves the plant would want to see it regulated and taxed and get it out of the black market.”
Mueller, a board member of MoCannTrade who helped draft the Legal Missouri 2022 proposal to legalize marijuana for recreational use, acknowledges “challenges” for entry into the industry. Those behind the proposal have sought to address them, he said, through a social equity provision that allows new licenses for “microbusinesses.” Those with lower net-worth, cannabis convictions or who are veterans or residents of disadvantaged neighborhoods are eligible.
‘You need six figures’
Madison says illegal market concerns can easily be addressed with a regulation requiring “seed to sale” tracking. The state tags each plant and traces it from grow room to harvest to its final product and sale from a dispensary. Missouri uses this system for medical marijuana.
She said she doesn’t believe the social equity provisions of the Legal Missouri proposal will be enough. The plan, which Legal Missouri hopes to get on the ballot next November, allows currently licensed medical marijuana businesses to get first pass at a recreational license before the state grants any more. Madison said she wanted to see programs specifically geared toward Black ownership.
“There’s no need for social equity (programs) if we have an already inclusive industry,” she said. “It’s not a welcoming industry for Black people when you say, ‘Hey you need six figures … to apply.'”
All of it has left Madison distrustful of Missouri’s limited market and its advocates. With her license denials still on appeal, she said she’s shifted her focus away from Missouri’s medical marijuana industry. Instead, she runs a telehealth clinic where a doctor certifies patients for medical cards. She also works as a consultant advising clients on writing applications, setting up home cultivation and helping people of color open businesses in the myriad markets that will grow around legal weed, such as packaging, graphic design and paraphernalia.
“There’s a million other opportunities that do not require us to touch the flower,” she said. “I just want the Black community to understand we can still win without being a dispensary.”
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Distributed by Tribune Content Agency, LLC.
