Predatory Practices Persist In Missouri's Cannabis Industry, Find Investigations Into Microbusiness Licenses

Predatory practices seem to be still going on within Missouri’s social equity cannabis program.

An investigation by The Missouri Independent showed that out of the 96 microbusiness licenses granted by the state through a lottery since the program began last year, cannabis consultant David Brodsky is associated with seven, all of which are either under investigation or at risk of being revoked.

Recognized by the Missouri Cannabis Trade Association for his role in developing the Missouri microbusiness community and mentoring disadvantaged business owners, Brodsky and his partners charge up to $4,000 for consulting services to help applicants enter the state’s microbusiness lottery.

The initiative is meant to help disabled veterans, low-income individuals and those with non-violent marijuana offenses.

In Missouri, seven licenses connected to Brodsky have faced investigations, issued in July. Regulators questioned the legitimacy of the business agreements, alleging false or misleading information brought by four of them who received letters of pending revocation sent by the Division of Cannabis Regulation in October.

Read Also: Missouri Judge Spurns Cannabis Prohibitionists’ Push To Remove Marijuana Legalization From Ballot

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The Background

This trend has been ongoing for over a year. The Independent previously reported on a pattern where influential groups and individuals dominate the microbusiness lottery by enlisting people to apply and subsequently offering contracts that severely limit their share of profits and authority in the business.

Some agreements gave qualified applicants limited control, such as only one-third voting power, while others, like a 47-page contract linked to John Payne, give business partners the majority of profits and control, raising concerns about predatory practices.

Brodsky, who helped create the networking group Missouri Microbusiness Association, and his business partner Scott Wootton, did not comment on their roles in the seven licenses in an email to The Independent, "due to confidentiality clauses in the agreements, which is standard practice in business contracts."

They are also linked to dispensary and wholesale applications at the same addresses in St. Peters and Elsberry, with multiple licenses under investigation by state regulators. Moreover, the Green Zebra LLC license, granted in October 2023 to an applicant who signed a contract accepting a loan from Black Krim LLC, where Brodsky is the sole member, is also under investigation.

That said a recent investigation by The Independent revealed a case involving Destiny Brown, a Black woman who believed she was being offered ownership of a cannabis dispensary and significant financial backing to compete for a license in the state’s social equity lottery.

However, Brown unknowingly signed a contract that granted control of the business to investor Michael Halow, who was unable to do it himself due to a felony on his record.

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