Missouri could revoke weed licenses connected to company accused of predatory behavior
Missouri’s health department may revoke two coveted marijuana micro-licenses connected to an out-of-state company that has been accused of predatory practices and had listed the licenses for resale.
The two micro-licenses, awarded to Seashore Rhythm, LLC in Arnold near St. Louis and Frankenstein Enemy, LLC in Columbia, are among 11 licenses that could be revoked over questions about their eligibility for a program aimed at helping small and minority-owned businesses break into the market.
The Missouri Department of Health and Senior Services announced on Friday that it could not verify the eligibility of 11 of the 48 companies or individuals it awarded marijuana micro-licenses to in October. The state has not yet stripped the licenses, but has sent letters to the license holders giving them 30 days to respond and provide records to prove why they should not be revoked.
Canna Zoned MLS, a Michigan-based marijuana real estate company, had listed the two Missouri micro-licenses for sale in October, The Star previously reported. Jeffrey Yatooma, the company’s owner, is listed as the main contact for 104 of the more than 1,000 marijuana micro-license applications submitted to the state, records show.
The state, in an email to The Star, did not say explicitly why the two licenses were at risk of being stripped. But Yatooma’s company has come under fire recently for offering to pay eligible people to enter lotteries awarding licenses for underserved groups in Missouri, Illinois and Maryland, The Star, Missouri Independent and the Chicago Sun-Times previously reported.
The company’s tactics, as well as its attempt to sell two licenses in Missouri, have sparked outrage from some state lawmakers, including from state Sen. Karla May, a St. Louis Democrat and candidate for U.S. Senate, who in an October letter to DHSS demanded an investigation.
Amanda Kilroe, an attorney for Canna Zoned MLS, said in an email to The Star that the company “worked meticulously on these applications and any additional information that the state has requested.”
“It is every applicant’s responsibility to understand and follow those guidelines and we are confident that we have,” she said.
On top of the two connected to Canna Zoned MLS, more than half of the licenses at risk of being stripped are tied to Cannabis Business Advisors, an Arizona-based consulting firm. Maxime Kot, the president and part owner of the company, is listed as the main contact for six of the 11 licenses that could be stripped.
One of the licenses connected to Cannabis Business Advisors, Potluck THC LLC, applied to start a marijuana dispensary in Kansas City but was not registered as a business in Missouri, The Star previously reported. The company registered with the state 12 days after The Star’s report, listing its home state as Arizona, records show.
Kot did not immediately respond to a request for comment on Monday.
Another license that the department could not verify was awarded to Higher Love KC, LLC, which applied to start a marijuana wholesale — or cultivation — facility in Kansas City. The company also did not respond to an email on Monday.
Of the 11 licenses that the department could not verify, nine were dispensary licenses and two were wholesale — or cultivation — licenses, Friday’s report from the state said.
The health department found issues including failure by the license holder to provide documentation to verify “the majority owner met the eligibility criteria,” a disqualifying felony offense and failure “to provide documentation that the facility would be operated by eligible individuals.”
One of the rules for the program required applicants to apply for and obtain only one micro-license to operate a marijuana facility. A Joplin man was denied a refund on his $1,500 application fee for violating this rule.
Missouri awarded 48 marijuana micro-licenses divided across the state’s eight congressional districts after the agency conducted a random lottery.
The program was designed to help lower income individuals and minority groups break into the market, which has been dominated by large companies. Applicants had to meet one of several requirements, including having a net worth less than $250,000 or having a prior marijuana-related charge.
This story was originally published December 18, 2023 at 11:53 AM.
