JEFFERSON CITY — The Missouri secretary of state’s office has opened an investigation into whether someone illegally sought to raise money from investors to fund a medical marijuana venture.
“It involves a party that was allegedly seeking to raise money for a medical marijuana license operating in Missouri,” David Minnick, securities commissioner for the Missouri secretary of state’s office, told the Post-Dispatch.
He said Wednesday the securities division had opened the investigation within the past week.
Voters legalized medical marijuana in Missouri last November. The drug is still illegal at the federal level. Minnick said the office is not singling out the medical marijuana industry.
“There’s nothing necessarily specific as to marijuana that comes to mind, but if a person or an entity is soliciting investors, they need to be either registered or affiliated with a registrant,” he said when asked what was wrong with raising money for a medical marijuana business.
“And, the security they’re offering needs to be either exempt from registration, or registered,” Minnick added. “In this circumstance, we don’t know enough at this point to answer any of those questions.
“We’re investigating whether or not the person or entity is offering securities, and whether or not those securities are exempt or registered, and then if that person or firm is registered,” he said.
In addition to overseeing elections, the office of Secretary of State Jay Ashcroft, a Republican, handles complaints from investors. Investigations may result in “cease and desist orders, consent orders, censures, investor restitution, civil penalties or criminal prosecutions,” according to his office website.
“There’s been no investor complaints of any kind involving marijuana or cannabis-related ventures,” Minnick said. “This investigation was simply by means of a referral to us, which then has led us to decide to open an investigation, to gather facts.”
Minnick would not disclose who referred the case to his division.
Investors may reach the secretary of state’s office by contacting the investor hotline at 800-721-7996 or by visiting MissouriProtectsInvestors.com.
The office’s probe comes as competition heats up within the medical marijuana industry. The Department of Health and Senior Services will begin accepting applications on Aug. 3 from businesses seeking to open dispensaries, cultivation and manufacturing centers.
The state must license at least 24 dispensaries for each of Missouri’s eight congressional districts, according to the text of the constitutional amendment approved by voters.
Dr. Randall Williams, director of the state Department of Health and Senior Services, said the state would license the minimum number of dispensaries this year, meaning many businesses will lose out on winning a dispensary license.
He said that if the dispensaries are unable to meet demand, the state would consider licensing more dispensaries next year.
In the 1st Congressional District, which includes St. Louis and parts of St. Louis County, the state has received 37 pre-filed application forms.
In the 2nd Congressional District, covering parts of St. Louis, Jefferson and St. Charles counties, the state received 27 applications; and in the 3rd District, which includes parts of Jefferson and St. Charles counties, as well as parts of mid-Missouri, the state has received 44 applications.
In addition to the secretary of state, the FBI is keeping tabs on the medical marijuana program.
Some marijuana business interests have funneled donations to politicians within the last year, but it is unclear what influence the money could have in Jefferson City.
The state has decided to hire a so-called “blind scorer” to grade applications, and bids for that contract are due on Friday.