Craigslist Alert: Cannabis Licensing Hopefuls Targeted By Scams, NAACP & Lawmakers Want Probe

James Harnden had been a longtime activist for cannabis legalization, especially after he was charged with a low-level felony for possession of an ounce of weed, which cost him his job and other opportunities - a situation that convicted felons often encounter. 

When he saw an ad on Craigslist “gigs” from a Michigan cannabis real estate group called Canna Zoned MLS seeking “partners who qualify as a social equity applicant” to participate in an Illinois lottery for cannabis business licenses earmarked for people impacted by marijuana criminalization, Harnden thought it sounded great.

“I spent most of my life applying for jobs and not getting them,” Harnden said. “So I’m like, ‘Okay, so maybe one of these licenses will swing my way.’”

What Harnden didn’t realize, was that he signed a contract agreeing to hold 100% ownership interest on the application, but wouldn’t get revenue or profits from the business. After the business passed through all the state and municipal approvals, the contract stated that Harnden would be required to sell his share of the business for $1 to the group or be held in breach of contract, according to a Missouri Independent story by Rebecca Rivas. 

Jeffrey Yatooma, a Michigan cannabis real estate group owner is now under fire for using social equity applicants to apply for cannabis licenses in multiple states. 

Not The First Time

Edna Patterson, a Chicago resident, was also lured by the promise of easy money and signed a contract with Canna Zoned MLS. Patterson, a shooting victim, was encouraged by Amanda Kilroe, an attorney for Canna Zoned MLS, reported the Chicago Sun-Times. Patterson later received an electronic transfer of $2,000 but, like others who fell for the scam, realized she was being exploited by the real estate company. 

State Politicians And NAACP Get Involved

Following Rivas' investigative report, Missouri State Sen. Karla May (D) sent a letter to the Division of Cannabis Regulation and Missouri AG Andrew Bailey demanding they investigate what she defined as an “egregious exploitation” of social cannabis equity licenses. Illinois Rep. La Shawn Ford (D) said the state needs to devise more safeguards to prevent this type of situation from happening.

The Missouri NAACP says the so-called agreement signed by Harnden defrauds the state and violates the spirit of social equity programs. “The very people who were victimized by cannabis laws in the first place are yet again on the losing end of what appears to be a distinctly inappropriate power grab,” said Nimrod Chapel, attorney and president of the Missouri NAACP. He added that the group is considering litigation to get a cease and desist order on the entire microbusiness program in Missouri.

Lisa Cox, spokeswoman for the Missouri Division of Cannabis Regulation, did not say if the division had seen the agreements between Yatooma and the applicants.

Stay tuned for more developments as the issue unfolds.

Photo: Benzinga edit of images by Matthew Brodeur and Jon Tyson on Unsplash