The Missouri House is considering a measure that would legalize adult-use cannabis in the state, while an initiative petition process that worries industry advocates circulates the state. (File photo)

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The advocates who successfully campaigned for a constitutional amendment to legalize medical marijuana in Missouri in 2018 are continuing to push the state toward recreational legalization of cannabis, but sharp disagreements have arisen over fairness in the market.

The House Rules Committee on Tuesday afternoon advanced HB2704, called the Cannabis Freedom Act. It awaits full consideration on the House floor. The bill would legalize recreational adult-use marijuana in Missouri, double the number of license holders statewide and open the door for nonviolent marijuana offenders to petition for expungement. 

Meanwhile, an initiative petition process dubbed Legal MO 2022 is circulating across Missouri in an effort to be placed on the November 2022 ballot. 

Proponents of the petition say it would open the market quickly to every adult in the state, while opponents worry about ensuring equity as the industry expands. 

Missouri’s entrance into the cannabis market has been fraught. The Department of Health and Senior Services, which oversees the state’s medical marijuana market, has been accused of an opaque application process that leaves business owners in the dark about the reasons their applications are denied. A Missouri commission recently granted a license to a previously denied applicant after DHSS processes were described as giving “intentionally vague guidance.” 

Rep. Ashley Bland-Manlove, D-Kansas City, is working closely with Rep. Ron Hicks, R-St. Charles County, HB2704’s sponsor, to fight for what she describes as fair implementation. But she has been discouraged by amendments added to the bill, which she said would fold in language from the initiative petition and undermine some of the original efforts of the bill. 

Critics of the medical marijuana market model want a more open process

The main point of contention is license caps. Missouri’s medical legalization in 2018 capped the number of licenses at 338 for growing, processing and selling cannabis across the state. 
Under the Legal MO 2022 proposal, current medical marijuana license holders would get first dibs at recreational marijuana licenses in Missouri, stoking worries of shutting out smaller, less-established operators. Under the measure, new licenses would be awarded through a lottery process. The proposal is backed by the state’s cannabis trade lobby, which testified in opposition to HB2704.

“Eighty percent of the licenses will go to persons who already have a medical license,” Bland-Manlove said. “So that means nobody else new gets into this industry, which is heart-wrenching since so many people I know – people who actually put blood money, like their settlements from car accidents, to try and get into the medical industry.” 

She added that the initiative petition proposal would allow individual existing license holders to own up to 10% of the market. “So again, just further hunkering down on the monopoly that has already basically started,” she said. 

HB2704, which Hicks calls a free-market approach to the expanding Missouri market, was originally written without any licensing caps. But amendments changed the anatomy of the bill, and now it would allow double the amount of licenses that are currently issued. Hicks opposes the amendment. 

Bland-Manlove and other supporters of HB2704 point to a provision that would require monthly reports from license holders in the state. This approach, she said, would help ensure proper regulation without creating barriers to entry and competition.

Fears of black-market growth

Missouri is approaching full adult-use legalization of recreational marijuana as other already-legalized states wage new fights against the black market, or selling the product underground to skirt government regulations. Illegal selling expanded rapidly in neighboring Oklahoma after minimal regulations left the industry wide open. 

One school of thought, represented by advocates of Legal MO 2022, is that license caps would keep the market from becoming oversaturated and prevent excess marijuana from infiltrating the black market. 

Ben Hartley, founder of Real Legalization Missouri, a group pushing for the end of marijuana “prohibition” in Missouri, says overregulation will only encourage black-market participation. 

“License caps always serve and protect an isolated market,” Hartley said. “And if you make it impossible for small operators, they’re going to grow underground. It’s not going to stop. It’ll be bigger and badder. And, you’ll have a situation like California, Oklahoma, you name it, black markets, just destroying the legal market. Better prices, better product.” 

Advocates place special emphasis on equity in recreational market

Bland-Manlove pointed to worries about the lack of inclusion of smaller or minority-owned businesses and fears small operations may get squeezed out of the evolving market if the state does not make an effort to focus on equity. She pointed to the medical marijuana amendment from 2018. 

“For the medical, there was no equity language in the actual ballot initiative,” she said. “So then when we as the Black Caucus tried to put equity points…that language was then rejected.” 

Under Legal MO 2022, a certain number of fully operational licenses would be issued. Alongside those operations, microbusinesses would be approved to enter into the market. Those are defined as businesses whose owners bring in less than $250,000 a year, reside in high-poverty areas or have been prosecuted for or convicted of a nonviolent marijuana offense. 

Those businesses would be limited to 250 plants. Hartley said overhead costs would be daunting, and the measure would do little to bring smaller businesses into the market.

“I think it’s a carrot for the voters,” he said. “And I think it’s to give the appearance that we stand for the little guy and so on.” 

“We have people that put hundreds of thousands of dollars, $100,000, $500,000 per applicant, their life savings, to be denied a license,” Hartley added. 

HB2704 would attempt to assist minority- and women-owned businesses by offering no-interest loans. But an amendment added in committee would prohibit transgender women from taking advantage of the loans. Bland-Manlove and others are trying to get the amendment removed.

Joani Harshman, a Kansas City-based cannabis attorney, said she was excited about HB2704, but its amendments have dampened her support. 

“Clearly, there was a lot of language that was added or edited.  I don’t know who was behind the amendments,” she said, and added that considerable lobbying has taken place in Jefferson City regarding the bill. 

A clean slate for people with marijuana possession convictions

Harshman represents patients, current operators and new applicants. She is hoping for some changes in the expungement language, which is included in both measures for those with nonviolent convictions. 

Under Legal MO 2022, anyone who is currently on probation or parole for possessing less than a certain amount of marijuana would have those crimes automatically expunged. 

For those currently incarcerated with convictions, or those who are no longer on probation or parole, petitions would need to be filed with the courts for those expungements to be removed. 

HB2704 would not automatically expunge nonviolent offenses, but anyone could enter a petition with the court at any time to have their record expunged. 

Bland-Manlove wants to include language in the bill that would dedicate 20% of the revenue that comes to the state from legalization to expungement efforts. Still, Hartley is worried that new laws could continue to disproportionately affect communities of color in Missouri. 

“My concern is that the bill is going to be tainted,” he said. “I really was willing to use my energy, creativity and platform because we originally were fighting for equity. So no license caps, make it a low entry and allow people to participate, especially our underprivileged African American community that’s been excluded nationwide from getting in the cannabis market.”

With the clock running out on the legislature’s 2022 session, HB 2704 is in a race to get passed, Bland-Manlove said. Regardless of its fate, she said she won’t support Legal MO 2022. 

“Just like any other campaign that is not good for my community, I stand up against it, and so right now, I’m standing up against the Legal MO ‘22 petition,” she said. 

If the petition fails to gain the required amounts of signatures, “I’ll take that as a win,” Bland-Manlove said. “Because the petition is just not good.”

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MEG CUNNINGHAM is The Beacon’s Missouri Statehouse reporter. Previously, Meg worked as a national politics reporter for ABC News in Washington, D.C., where she covered campaigns and elections. Meg is...