CPC of Missouri-Smithville, LLC and GF Saint Mary LLC, licensed cannabis growers and manufacturers in Missouri, filed a lawsuit in the Circuit Court of Jackson County on behalf of independent wholesalers, alleging that Good Day Farm (GDF) and its network of conspiring companies and investors were harmed by an intentional, coordinated and unconstitutional scheme. The complaint alleges that the “GDF Cartel” illegally controls or manages the state’s share of dispensary licenses and uses that market power to manipulate Missouri’s $1.52 billion cannabis market for its own profit.

GDF and its co-conspirators allegedly built the cartel by arranging for third parties to invest in limited liability companies (LLCs) that then acquire additional dispensaries, cultivation and processing facilities, all of which are owned, operated or controlled by GDF. The result: The alleged cartel exercises effective control over at least 61 dispensaries, nearly triple the 22 allowed by the Missouri Constitution, with more than 10% of dispensary licenses “under substantially common control, ownership or management.” With 224 dispensaries currently licensed statewide, the alleged GDF Cartel controls more than one in four dispensary licenses in Missouri. But its influence is even greater, with alleged Cartel dispensaries accounting for more than 40% of wholesale cannabis in the state, giving it significant — and illegal — influence over all independent growers and manufacturers forced to sell through its network.

To avoid the Missouri Constitution’s 10% licensing limit and avoid regulatory oversight, the alleged cartel operates under five different brand names:

• Good Day Farm (21 dispensaries),
• CODES (20 dispensaries),
• Green light (10 dispensaries),
• Fresh Karma (6 dispensaries), and
• 3 Fifteen Primo (4 medications).

But they’re all part of a single, coordinated operation, the complaint says.

• Purchase cannabis products from non-Cartel wholesalers at artificially depressed prices;
• They supply their 61 dispensaries with the same products—mainly those produced by Cartel growers—significantly excluding products from independent wholesalers;
• Force independent drug wholesalers to purchase the Cartel’s finished products as a condition for their wholesale products to be placed on the Cartel’s drug store shelves; and
• Boycott non-cartel wholesalers who refuse to agree to anti-cartel demands.

Bob Hoffman, one of the attorneys leading the case, said: “The GDF Cartel is removing competition from the wholesale cannabis market and enriching itself with illegal profits through a counterproductive, clandestine business conspiracy. Missouri growers and manufacturers have been suffering under this scheme for a long time; many of them know something is wrong, but we don’t realize how the cartel has manipulated the market through this manipulation framework. Missourians to approve recreational cannabis in 2022 They voted for a fair and competitive market. Missouri licensed cannabis businesses that have suffered these practices should join us because they may be entitled to substantial damages.”

The complaint alleges the financial toll the Cartel has taken: Since the Cartel began illegal price-fixing, it has used its collective market power to lower wholesale prices by more than 20%, and continues to squeeze wholesalers and threaten the viability of their operations.

The unconstitutional complaint alleges that GDF knew its plan to build cartels could create legal risks for the company under the Constitution’s 10% licensing limit. The complaint quotes from a document provided by GDF to potential investors: “There can be no assurance that the Missouri Department of Cannabis Regulation will not dispute the number of marijuana dispensaries operated or supervised by the operator or its affiliates…”.

This action is brought on behalf of a putative class that includes all licensed independent wholesalers in Missouri that are not members of the alleged GDF Cartel for purposes of injunctive relief. Wholesalers who believe they have been financially harmed by the alleged Cartel’s practices should join the case because they may be entitled to substantial damages. The putative class is represented by the law firms of Feuerstein Kulick LLP and Bryan Cave Leighton Paisner LLP.

Source: Feuerstein Kulick LLP and Bryan Cave Leighton Paisner LLP

State licensee Medical marijuana companies can apply for federal protections In line with the Trump administration’s cannabis reprogramming process.

The Drug Enforcement Administration’s “Medical Marijuana Dispensary Registry Portal” went live Wednesday morning.

The move comes after the Justice Department announced that last week Marijuana Schedule I through III of the Controlled Substances Act (CSA), in stages.

Pursuant to an order signed by Attorney General Blanche, marijuana products regulated by a state medical cannabis license were immediately moved to Title III.

III. State-licensed medical cannabis dispensaries that wish to take advantage of the new legal protections and tax benefits that come with annexation status must first file an application with the DEA requesting information about their processes for storage, ordering, distribution, inventory, record keeping and other aspects of their business.

For each activity below, indicate whether the company has a standard operating procedure (SOP):

• • the order
  • receiving
  • Inventories
  • Marijuana storage
  • security
  • Distribution (including delivery services)
  • to divide
  • Destruction/Disposal
  • Reporting Theft/Loss
  • Due diligence (including provider/patient/professional verification)
  • Corresponding Liability
  • Record keeping”

The application asks about specific details of security measures such as vaults, safes, secure storage, access controls, alarm systems and on-site security personnel.

Applicants can choose whether to apply for administration of marijuana, marijuana extracts, or naturally derived delta-9 THC.

Currently, with only medical marijuana moving to Schedule III, the application asks potential registrants whether their businesses handle or provide recreational marijuana.

According to last week’s DOJ order, an expedited administrative hearing process will be held beginning June 29 to consider the broader cannabis reorganization.

The DEA application, meanwhile, also asks companies to submit information about their state’s cannabis licenses and to answer questions about their criminal and disciplinary history.

It also asks, “Has anyone involved in the ownership or operation of the business previously manufactured, distributed, and/or provided a controlled substance without a DEA registration authorizing such activity?”

Allegedly every illegal cannabis company operating in the state today has key employees who have done so, medical marijuana was a Schedule I substance whose manufacture, distribution and general distribution was not permitted by the DEA until just a few days ago.

Applicants must also list the suppliers from whom they plan to procure marijuana, and report whether they plan to repackage or relabel cannabis products.

They must also provide lists of people whose business they expect to have “access to controlled substances,” including their dates of birth, social security numbers, and drug-related criminal histories.

“Provide the following for each person you plan to acquire controlled substances:

• • The name
  • Title(s)
  • date of birth
  • Social Security number
  • DEA registration numbers, if applicable
  • State/territory permits to manufacture, distribute, dispense, or otherwise handle controlled substances
  • Has this person been subject to one or more federal, state, territorial, or tribal disciplinary actions?
  • Has this person been convicted of federal, state, territorial, tribal, or local offenses related to controlled substances?

There is also $794 per year the application fee, currently only payable through PayPal, although DEA ​​”expects to have additional payment methods in the coming weeks.”

Application fees are non-refundable.

Separately, the DEA has launched a new web page on its website that contains key information about the new federal rescheduling move for cannabis, including copies of Federal Register orders outlining the process for the amendment and the upcoming litigation.

Blanche’s reorganization order last week said that to comply with the international drug control treaty’s “requirement that a government agency act as the exclusive purchaser of cannabis production,” the DOJ is setting in motion a process by which the federal government technically buys from marijuana producers and then sells to them or related entities.

“Registered growers must store the crops in a DEA-accessible facility until that transaction is completed, and each grower’s registration must specify the area in which the grow is allowed,” he said.

“All manufacturers registered under this subsection shall establish a nominal price for the purchase of their marijuana crops. The Administration shall then purchase the entity’s crops at that price and resell the crops to the entity, or a related or supporting entity, at the same price plus the administrative fee calculated in section 1318.06(a)..”

Meanwhile, the US Treasury and Internal Revenue Service (IRS) said they plan to issued new tax guidelines for the marijuana industry after the reorganization announcement.

The reorganization will benefit state-licensed marijuana businesses by allowing them to take federal tax deductions that are currently prohibited under IRS Code Section III, known as Section 280E.

White House Press Secretary Karoline Leavitt said the administration is moving forward with the marijuana overhaul because Cannabis reform is “very popular” with voters and because doing so will help people who need access to the drug for medical purposes.

At the press event held in the Oval Office last week, President Donald Trump spoke about the medical benefits of marijuana.

“A lot of people are facing big problems, and that seems to be the best answer,” he said. “They’re very happy. So the reorganization begins, and that’s a big thing, the reprogramming.”

The president stated that his administration’s rescheduling of cannabis came about after his friend Howard Kessler told him about his use of medical marijuana.

“He had some medical difficulties, and it came about by chance, kind of,” he said. “He had to go through a lot of different medications, and he said this was the one that was so much better than anything else. And so he lived through that. He didn’t benefit from it, because now he lives much better from the perspective.”

“So we hope you don’t have to,” Trump said. “But if you must, I hear it’s the best of all alternatives.”

Separately, the president asked Congress to take action changing the law that threatens to federally recriminalize hemp-derived full-spectrum CBD products later this year

“We need to do this STRAIGHT and FAST, especially for those who have found CBD helping them,” he said in a social media post. “Also, I’m told it will help our BIG FARMERS that we love and will always be around.”

A few days ago, Trump denounced this Federal officials were “slowly” pursuing his cannabis warrant.