Missouri Officials Update Cannabis Industry Rules to Address Middlemen Concerns

New cannabis industry regulations proposed by the Missouri Department of Health and Senior Service’s Division of Cannabis Enforcement would require the registered designated contact for all the state’s cannabis microbusiness licenses to be the owner or partial owner of the company, the Missouri Independent reports.

Under the state rules, each microbusiness operator assigns a person to be their designated contact with the state. The proposed rulechange aims to prevent “predatory” middleman business practices, according to the agency, where a person registered as the designated contact for a cannabis licensee can intercept official communications, keeping the operator in the dark about some business and licensing dealings.

“These revisions are intended to ensure microbusiness licenses are issued to eligible individuals… and to address the trend of predatory arrangements in microbusiness licensing. Specifically, these draft rule revisions should mitigate the ongoing efforts of ineligible entities to acquire licenses by taking advantage of eligible individuals.” — Division of Cannabis Enforcement statement, in a press release

The designated contact role was originally designed to improve communication between industry operators and officials.

Notably, many individuals are currently registered as the designated contact for multiple cannabis entities, including one Missouri consultant who appeared on 329 social equity license applications last year and a Michigan-based attorney who was listed on another 94, the report said. Of the designated contacts registered with the state, 68 have appeared on multiple applications, accounting for nearly three-quarters (74%) of the total applications received in April.