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Cannabis regulators concerned about predatory practices in Missouri's social equity program • Missouri Independent

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Cannabis regulators concerned about predatory practices in Missouri's social equity program • Missouri Independent


Cynara Velazquez became familiar with Michael Halow over the summer. 

Velazquez is an organizer with the California nonprofit called Cannabis Education Project that San Diego County hired in March to implement its social-equity cannabis program. The group largely helps people who were imprisoned for cannabis apply for a license to sell or grow marijuana. 

That’s how her team met Halow. 

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At one of the county’s informational sessions, organizers saw Halow pass out business cards, she said, that led to an online form for potential applicants and looked identical to the application form used by the county. 

Halow or his brother Brandon would call the applicants, Velazquez later learned, and offer to help them navigate the system in exchange for 49% of the potential company’s profits.

“We called every single applicant,” to warn them, Velazquez said in an interview with The Independent. But a few applicants, she said, had already “fallen for the scheme.”

Then, she saw an article in The Independent last month about a Black disabled veteran who filled out an inquiry form to get a microbusiness license in Missouri and ended up signing a contract with Halow. She claims she didn’t realize the contract aimed to take full control and profits of the dispensary. 

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“We said, ‘Oh my God, these guys are even more insidious than we thought,’” Velazquez said.

Since Missouri voters approved recreational marijuana in 2022, state regulators have used a lottery system to award 96 microbusiness licenses — a program sold to voters as a way to help victims of the War on Drugs get a toehold in the burgeoning cannabis industry. 

But of the 96 licenses issued so far, 41 have been either revoked or are currently at risk of being revoked. Another three are under investigation. 

A majority of those 44 licenses are connected to groups or individuals who flooded the lottery by recruiting people to submit applications and then offering them contracts that limited their profit and control of the business.

Halow, for example, is connected to more than 700 of the 3,600 applications submitted for Missouri’s lottery since the program began. He’s associated with 22 awarded licenses, but every one has been either revoked or was denied certification earlier this month by the Division of Cannabis Regulation.

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In all those October notices of pending revocation connected to Halow, the division stated the licensee entered into an agreement that would result in someone besides the eligible applicant “becoming an owner of this and 15 other microbusiness licenses.”

In total, groups flooding the lottery have made up about 1,400 of the 3,600 applications submitted since the program began, meaning they’ve represented about 40% of what’s gone into the lottery and come away with nearly 40% of the licenses.

NAACP leaders in Missouri are calling it a “predatory attack” on the state’s social-equity cannabis program, which voters intended to allow marginalized or under-represented individuals to participate in the legal marijuana market. 

“If a Black license owner is not making the most money off the operation, then they’re being robbed of the opportunity to create generational wealth,” said Adolphus Pruitt, president of the St. Louis City NAACP. “That’s what the microbusiness program is about. And that’s what’s being robbed.” 

Division of Cannabis Regulation Director Amy Moore said her team shares the concern about predatory practices, and that’s why the division previously issued warnings to applicants.  

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We put out quite a bit of education and warnings about predatory practices, she said, because we know that is happening, and it’s not just happening here in Missouri.

By the time applications get to state regulators “a lot of agreements have been signed,” Moore said. “Financial transactions have happened. So, I really appreciate that there are other voices also speaking up, so that some of that damage perhaps could be prevented and mitigated before we get to applications being submitted to a government agency.”

In an email to The Independent, Halow denied that his actions are predatory and says he’s transparent with applicants he’s worked with in “a number of states.” 

“Applicants engage me for the same reason people hire tax preparers,” Halow said. “Navigating through government paperwork can be a daunting task in any situation. I am very proud of the resources and expertise I provide across the country…”

Halow said the intake form on his website for San Diego was a “marketing tool,” and “it was not meant to mimic the county’s official process.”

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“As for the criticism regarding ‘flooding the lottery,’ it’s important to recognize that more applicants is actually a sign of greater participation in a government program,” he said, “which is a positive outcome.”

By law, the state must award a total of 144 licenses to disadvantaged business owners. But there’s not a definitive deadline to meet that goal, Moore said.

Pruitt believes the division needs to re-evaluate the rules around the application process to “fix the problem,” even if it means a delay in issuing the next round of licenses. A short pause, he said, could also give the NAACP and other community leaders an opportunity to try to create pathways to business capital so business owners aren’t as vulnerable to predatory practices. 

“It’s a very simple question with a simple answer for me,” Pruitt said. “Or would you rather continue to try to catch everybody who’s speeding?”

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More than half not certified

Amy Moore, right, director of the Missouri Division of Cannabis Regulation, talks with attendees at the National Cannabis Industry Association’s summit on March 28 in St. Louis (Rebecca Rivas/Missouri Independent).

The state issued its first round of 48 microbusiness licenses last year. 

These applicants were picked out of a lottery of 1,600 submissions, and then the division verified they met the basic qualifications — which includes having a low income, a nonviolent marijuana charge on their record, being a disabled veteran or living in a low-income ZIP code. 

But getting the license is actually just the beginning of the verification process. 

The licensees must then pass through a rigorous 60-day investigation into all financial and operating agreements to make sure the license will continue to be majority owned and operated by an eligible person, as the state constitution requires.

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After the investigations last year, the division ended up issuing 11 notices of pending revocation. 

The licensees had a few months to respond to the division’s concerns, but ultimately all six licenses connected to Halow were revoked — along with two connected to a Michigan-based group — because they couldn’t prove the business would be run by an eligible person.

The revocations were the division’s attempt to prevent what some legal experts have called “fronts,” or arrangements where the profits and ownership weren’t going to people that regulators had certified were eligible. 

“Most people’s reactions to our revocations was that it was a very strong move and was very clear why we did it,” Moore said. “So it seems that that did not have as much of an impact as we hoped.”

In July, the division awarded another 57 microbusiness licenses. But after the 60-day investigation that ended earlier this month, regulators sent out 32 notices of pending revocation.

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This table was included as part of an Oct. 10 report from the Division of Cannabis Regulation’s Chief Equity Officer on her eligibility review of the microbusiness licenses. (Courtesy of the Division of Cannabis Regulation).

Half of the 32 pending revocation letters went to licensees connected to Halow. 

But Halow’s strategy is not unique. Neither are the results. 

Last year, The Independent revealed a Michigan-based company called Cana Zoned was recruiting people on Craigslist to enter Missouri’s social equity license lottery using contracts forcing them to eventually relinquish all control — and profits. 

The company landed two dispensary licenses last October and both were revoked earlier this year, though the company is appealing that decision. 

Despite those revocations, Canna Zoned was awarded another license through the July lottery, and once again received a notice of pending revocation this month. 

John Payne also received six notices of pending revocation this month for licenses where he serves as the designated contact. Payne led the campaign to legalize recreational cannabis in 2022 and is connected to nearly 500 applications and 12 licenses since the program’s inception. 

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But Payne has come under fire in recent months after The Independent revealed that for some applicants he’d recruited eligible Missourians and had them sign a 47-page contract that would ultimately give him and his partners 90.1% of profits and majority control of the business. 

Despite only owning a fraction of the business, under state law the applicants would bear the lion’s share of the regulatory scrutiny. If they ever want to walk away from the deal, they would be required to pay a nearly $1 million fee.

In addition to the six notices of pending revocation this month, three current licenses connected to Payne are under investigation by state regulators. According to case documents for these three cases, the division questioned whether the eligible person who submitted the application will continue to be the majority owner and operator of the business.

“It’s certainly not in the best interest of individuals or in the interest of the program or the implementation of the law to be issuing licenses every round and doing notices of pending revocation for more than half,” Moore said. “So yes, we are considering what changes we need to make.”

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Notices tripled from last year

Roz McCarthy, CEO and founder of the national organization Minorities for Medical Marijuana, said it’s troubling that the number of pending revocation notices the division issued has tripled from the first round of licenses a year ago to the second round this year. 

The division or a legislative committee, she said, should hold a public meeting to get feedback from residents and social-equity experts about how to address the issue.

Missouri regulators are looking into several solutions, Moore told The Independent. However, many of them would require a change in the state’s administrative rules –- and that would require a public hearing before a legislative committee for approval. It would also delay a third round of licenses, she said.

Having applicants take an online training course that addresses predatory practices is among the possible new requirements, Moore said.

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“Those kinds of front-end educational efforts, they’re very good for individuals who are interested in them,” Moore said. “It just probably would have to be one factor of a bundle of actions.”

Let us know what you think…

Velazquez said San Diego County will now likely require eligible individuals to submit the application themselves, and not through a consultant in order to curtain predatory practices.

Velazquez says she doesn’t want California to follow in the footsteps of Arizona’s social equity program — where Halow’s actions have also been criticized. Arizona Senate Majority Leader Sonny Borrelli, a Republican, spoke about Halow and other investors’ impact on the state’s program during a legislative committee hearing in February.

We now have here in Arizona, he said, a situation where 24 of the 26 of these social equity licenses are now fully controlled by companies or people who do not belong in these special groups to get this license.

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Borrelli proposed legislation to return these licenses to their original owners, alleging private investors and cannabis corporations used predatory tactics to seize control of them. It passed the Arizona Senate but didn’t make to a House vote.

Social-equity cannabis programs nationwide, McCarthy said, largely aim to provide business opportunities for people who reside in highly-policed areas where cannabis has been criminalized.

A contract where an applicant only gets 9% or no profits of the business is “so unfair,” she said.

“People will take our community’s pain and then turn it around and create a business around it,” McCarthy said. “They do it under the guise of equity, but it’s a lie.”

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32 notices of pending revocation

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Missouri

Family releases details of Missouri prisoner who suffocated to death

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Family releases details of Missouri prisoner who suffocated to death


The family of a prisoner who died in a Missouri prison said that the man was “brutally killed” by members of the correctional facility in a lawsuit.

The family of Othel Moore Jr. have raised a lawsuit against the Missouri Department of Correction and the Jefferson City Correctional Facility after the 38-year-old died in Jefferson City on December 8, 2023.

The family’s lawsuit writes that Moore Jr. was “brutally restrained and mummified” by the defendants, named as being members of the correction center’s emergency response team.

It adds that they “ignored his struggle to breathe, and left him to slowly and painfully suffocate.”

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According to the lawsuit, the prisoner, who was Black, was pepper-sprayed and shocked by a type of glove used in prisons by officers to help with inmate compliance.

Oriel Moore describes her life without her brother, Othel Moore Jr., to reporters on December 19, 2023, at the Missouri Capitol in Jefferson City. The family of Moore Jr. filed a lawsuit against the Missouri…


Summer Ballentine/AP

He was also reportedly restrained, and given a spit hood—which prevents a person from being able to spit—as well as a helmet and leg wraps.

He was then allegedly confined to a restraint cart and isolated in a small, enclosed space known as a dry cell, the lawsuit adds.

It continues that Moore Jr. had said repeatedly that he was unable to breathe, and accuses the defendants of ignoring his pleas.

The lawsuit writes that Moore Jr. was “left to die alone in a cell, deprived of the basic dignity of medical care and human attention. Moore should not have died. He just needed someone to care about him.”

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It also alleges that Moore Jr.’s death was not “an isolated incident, but rather the product of a systematic pattern of coercion, brutality, intimidation, reckless disregard and deliberate indifference fostered the Missouri Department of Corrections’ highest-ranking officials.”

It was reported in the lawsuit that these events were recorded on video and “witnessed by many.” The lawsuit was filed on October 24.

In the video released by the family, guards are seen holding Moore Jr.’s arms as he kneeled on the floor and lay face down.

They then bound his legs, covered his face and strapped him into a cart. Moore Jr. did not appear to struggle with the guards.

Moore’s movements gradually slowed until he became motionless. It was 10 minutes later a nurse went to check on him and found him dead.

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“This graphic video evidence shows the unjustified and brutal murder of Othel Moore, a 38-year-old Black man, by correctional officers at the Jefferson City Correctional Center. This is one of the most egregious prison death cases in America,” attorney Andrew M. Stroth, managing director of Action Injury Law Group, a Chicago -based civil rights law firm, told Newsweek.

In a statement released by the Missouri Department of Corrections, the center said that Moore Jr. died while “in a restraint system designed to prevent injury to himself and others.”

The department has reportedly stopped the use of the restraint system Moore was held in since the incident of his death.

In the update shared in June 2024, the correction center reported that Cole County Prosecuting Attorney had pressed felony charges against five former corrections staff members in connection with Moore’s death.

In total, ten people were reportedly involved in the incident, and those individuals are allegedly no longer employed by the department or its contractors, the report added.

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Per the Missouri Department of Corrections report, Moore was serving a 30-year sentence for convictions of second-degree domestic assault, possession of a controlled substance, two counts of first-degree robbery, two counts of armed criminal action, and violence to an inmate or employee of the Department of Corrections.

Newsweek has contacted the Missouri Department of Corrections via email for comment.

Update 10/31/24, 2:22 p.m. ET: This story was updated with comment from attorney Andrew M. Stroth.

Do you have a story Newsweek should be covering? Do you have any questions about this story? Contact LiveNews@newsweek.com.

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Hawkeyes Dominate Missouri Western in Exhibition

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IOWA CITY, Iowa – The University of Iowa women’s basketball team kicked off their season with a commanding win against Missouri Western, 110-55 in an exhibition at Carver-Hawkeye Arena on Wednesday night. It was head coach Jan Jensen’s first game at the helm.

Iowa had five players score in double digits, led by junior Hannah Stulke and freshman Teagan Mallegni with 18 points each. Kylie Feuerbach and senior Lucy Olsen contributing 14 points apiece. This game marked the first career start in an Iowa uniform for both Olsen and Mallegni.

The Hawkeyes jumped to an early lead, ending the first quarter with a 33-14 advantage. Key contributions came from Stuelke, who scored seven points in the first quarter alone, followed by Olsen with six, and Feuerbach, who added three points and three rebounds.

The second quarter saw Iowa continue to dominate, extending their lead to 57-26 by halftime. Olsen scored 11 points and grabbed four rebounds in the first half. The Hawkeyes’ defense was equally impressive, forcing six turnovers and limiting Missouri Western’s scoring to 12 points in the second period. Iowa allowed one two point field in the first 20 minutes of action.

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The second half was more of the same as Iowa maintained their intensity. The third quarter ended with Iowa leading 84-42, thanks to a strong performance from Mallegni, who scored 9 points in the quarter. The Hawkeyes’ bench also played a significant role, contributing 48 points overall.

In the final quarter, Iowa continued to apply pressure, closing out the game with a 26-13 run. The Hawkeyes shot 83.9 percent from the line with all available players contributing to the stat sheet. Senior Addison O’Grady added eight points and two rebounds, and Taylor McCabe downed two threes tallying eight points and four assists in her first career start.

POSTGAME NOTES
– Junior Hannah Stuelke recorded 18 points, a team-high seven free throws, and five rebounds.
– Lucy Olsen dished out a team-best six assists and scored 14 points in her debut as a Hawkeye.
– Freshmen Ava Heiden, Teagan Mallegni and Taylor Stremlow combined for 34 points, 16 rebounds, and five assists.
– Stremlow led the Hawkeyes with nine rebounds.
– Mallegni shot 50 percent from deep (4-9) and netted 18 points.
– Kylie Feuerbach scored 14 on 5-of-7 from the field and recorded seven rebounds and two steals.
– Iowa had five players register double figures. (Feuerbach, Heiden, Olsen, Mallegni and Stuelke)
– Tonight’s game marks the second exhibition sellout in Iowa women’s basketball history. (14,998)
– It is the largest crowd in program history for an exhibition game.
– Iowa is 2-0 all-time in exhibitions against Missouri Western. (2007)
– The Hawkeye defense held Missouri Western scoreless for the last 3:40 of the first quarter. Iowa went on a 13-0 run during that span making 7-of-9 field goal attempts.
– Seven different Hawkeyes scored in the first period.
– Iowa shot 40 percent (4-10) from three-point land in the first quarter.
– Olsen was the only player in double figures at halftime with 11 points, four assists, and four rebounds.
– UI led 57-26, at the break connecting on nine 3-pointers. (9-20)
– Six players had six or more points at halftime.
– Tonight’s contest never saw a tie or lead change, the Hawkeyes were in control for all 40 minutes.
– Iowa had 20 assists on 36 field goals.
– The Hawkeyes held Missouri Western to 24.2 percent from the field in the first half. (8-33)
– Iowa allowed one two-point field goal in the first 20 minutes of action.
– All active players scored in the game.

QUOTING SUE P. BECKWITH, MD, HEAD COACH JAN JENSEN
“I worked with the best in my opinion—not just the best coach, but the best person. I am grateful to have a team that did what they should’ve done tonight. It’ll be a different feeling when the games count, and when we start playing our caliber of players, but I’m grateful to have this win. Personally, it’s huge, and it’s everything I wanted so many years ago. Thanks to my great boss, Beth Goetz, and Barbara Wilson. I’m so thankful, and the players did such a great job tonight.”

FOLLOW US
Make sure to follow Iowa women’s basketball on Twitter, Instagram, and Facebook (@IowaWBB) for news and updates all season long.

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UP NEXT
The Hawkeyes open the regular season Nov. 6, hosting Northern Illinois at 6:30 p.m. (CT). The contest will stream on B1G+ (subscription required) and the Hawkeye Radio Network.





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Lawsuit filed against Missouri City, police department details crash that killed mother, son

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Lawsuit filed against Missouri City, police department details crash that killed mother, son


MISSOURI CITY, Texas – The Missouri City police officer who was involved in a crash that killed a mother and son has now been indicted for his fault in the collision.

The family filed civil lawsuits against the city of Missouri and its police department in July for the deaths of Angela Stewart and her 16-year-old son, Mason Stewart in June.

On Wednesday, the former Missouri City police officer, 27-year-old Blademir Viveros, was indicted for manslaughter in connection with a crash that claimed the lives of the Stewarts.

BACKGROUND: Former Missouri City officer indicted for manslaughter following crash that killed mother and son

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The Fort Bend County District Attorney’s Office confirmed the manslaughter charges following a grand jury’s decision.

Lawsuit details of crash

According to the lawsuit, Angela Stewart and Mason Stewart died because of the negligence and gross negligence of Vivero of the Missouri City Police Department.

On June 20, Angela and Mason Stewart were exiting the parking lot of the Dollar Tree store, located at 1681 Cartwright Road, at around 8:45 p.m.

READ: Mother, 16-year-old son killed in crash involving Missouri City PD officer have been identified

Upon exiting the parking lot, the vehicle the Stewarts were traveling in was struck by Viveros, who was in a 2021 marked Missouri City Police SUV.

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The lawsuit states that Viveros was negligently traveling at a high rate of speed, above the posted legal speed limit, and without emergency lights or sirens on. Because of his high speed, the impact of the collision reportedly caused the destroyed vehicles ended up roughly 300 feet away from the point of impact.

‘A cop killed him’: Family shares emotional response after mother, son were killed by Missouri City PD officer

As a result of the collision, Angela and Mason died.

READ: Robbery suspect arrested by Houston PD may also be linked to Missouri City chase that resulted in mother and son’s death

Read the full lawsuit below:

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Copyright 2024 by KPRC Click2Houston – All rights reserved.



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