Class Action Lawsuit Claims ‘Cartel’ Manipulates Missouri Cannabis Industry
A class action lawsuit filed in Missouri contends a “cartel” owns, controls, or manages an illegally high share of the state’s dispensary licenses and uses that market power to manipulate the market for its own gain.
The lawsuit from licensed cannabis cultivators CPC of Missouri-Smithville, LLC and GF Saint Mary LLC alleges that Good Day Farm and a network of companies and investors conspired to invest in limited liability companies that then acquired additional cannabis industry licenses, all of which are actually owned, managed, or controlled by Good Day Farm.
Missouri has a 10% licensing cap written into its adult-use cannabis law, but the plaintiffs contend that the so-called cartel operates under five different brand names and operates 61 total dispensaries. The lawsuit claims Good Day Farms holds 21 dispensary licenses and is working with CODES, which operates 20 dispensaries; Greenlight, which operates 10 dispensaries; Fresh Karma, which operates six dispensaries; and 3Fifteen Primo, which operates four dispensaries.
The lawsuit contends the companies purchase cannabis from unlinked firms at artificially depressed prices, but stock their dispensaries from companies that they have links to, and shut out independently produced products from their dispensaries unless the companies agree to their demands.
In a statement, Bob Hoffman, one of the attorneys leading the litigation, said the companies’ actions are “suppressing competition in the wholesale cannabis market and enriching itself with illegal profits through an unconstitutional and clandestine business conspiracy.”
“Missouri’s cultivators and manufacturers have been suffering under this scheme for too long – many of them know something is wrong but don’t realize the scope of the Cartel’s market manipulation,” Hoffman said in a press release. “We filed this suit to restore the fair, competitive marketplace that Missourians voted for when they approved recreational cannabis in 2022.”
The lawsuit names 50 businesses and individuals as co-conspirators.