State licenses for medical marijuana dispensaries: neighborhood-level determinants of applicant quality in Missouri

Abstract

Background When state governments impose quotas on commercial marijuana licenses, regulatory commissions use an application process to assess the feasibility of prospective businesses. Decisions on license applications are often met with formal appeals and legal challenges from rejected applicants. Although prior research has examined substate disparities in the availability of marijuana dispensaries, less attention has been given to the quality of license applications. The present study analyzed the relationship between neighborhood-level characteristics and the quality of prospective dispensary businesses. Methods During Missouri’s first applicant pool for medical marijuana dispensaries in 2019, a total of 606 census tracts contained the location site of at least one dispensary applicant. Using data from the Missouri Department of Health and Senior Services and the American Community Survey, fractional and binary logistic regression models were used to estimate the relationship between census-tract characteristics and application outcomes. Results License applications received higher evaluation scores when proposed dispensary sites were in census tracts with greater population densities and no majority in racial/ethnic composition. Census tracts with poorer socioeconomic conditions attracted a disproportionate share of low-scoring applicants from the bottom quartile of scores. These effects were stronger for certain application subsections, particularly those assessing the quality of an applicant’s business plan and on-site security. Conclusions Some communities tend to attract prospective license holders who possess better quality resources, business practices, and industry experience. State disparities in commercial licensing requirements and application processes may lead to the inequities in legal product access found in some prior studies.

Building the Prison to Legal Drug Dealing Pipeline: A Comparative Analysis of Social Equity Policies in Recreational Cannabis Licensing

“…In essence, there is a need across all existing social equity programs to assist equity entrepreneurs in opening businesses in neighborhoods where they will have access to large customer bases, tourists, and more affluent consumers. These recommendations build on observations in the literature that highlight the underrepresentation of equity entrepreneurs at all levels of the cannabis industry [36], the unique challenges they face due to inconsistencies in federal and state regulations [37,38], and disparities in equity entrepreneurs' access to the industry due to insufficient technical assistance and targeted grant and loan programs [39].…”