A bold class action lawsuit rocks Missouri’s booming cannabis market. Two cultivators accuse Good Day Farm and allies of forming a secret cartel that snaps up over 60 dispensary licenses. This breaks state rules and crushes smaller players, they claim.
Cultivators CPC of Missouri-Smithville, LLC and GF Saint Mary LLC filed the suit on August 23, 2024, in Clay County Circuit Court. They say a cartel led by Good Day Farm controls way too many dispensaries. The group holds 61 spots, smashing past the strict 10% cap set by voters in 2022.
The plaintiffs grow cannabis but struggle to sell it. Small shops favor the cartel’s cheap, high-volume flower, they argue. This squeezes out fair competition.
Good Day Farm sits at the center. Owned by Canadian firm TerrAscend Corp, it runs 21 dispensaries directly.
Cartel Uses Shell Companies to Dodge Cap
Missouri’s Amendment 3 limits any company to 10% of all dispensary licenses. With about 200 licenses out now, that caps one player at 20 max. But plaintiffs paint a sneaky picture.
They claim Good Day Farm funnels cash into shell LLCs. These grab extra licenses while staying under the radar. Brands like CODES, Greenlight, Fresh Karma, and 3Fifteen Primo pop up as fronts.
Here’s a quick look at the alleged holdings:
| Brand | Dispensaries |
|---|---|
| Good Day Farm | 21 |
| CODES | 20 |
| Greenlight | 10 |
| Fresh Karma | 6 |
| 3Fifteen Primo | 4 |
| Total | 61 |
This network lets them control nearly a third of the market, the suit says.
Investors and managers stay the same behind the scenes, per court papers. They share staff, software, and deals.
Cultivators Feel the Market Squeeze
Plaintiffs say the cartel buys huge batches from its own growers at rock-bottom prices. Then they dump it on shelves, undercutting everyone else. Independent cultivators like CPC and GF can’t match that.
One key charge: The cartel rejects premium flower from outsiders. They push volume over quality to keep prices low and lock in customers.
Missouri’s market hit $1.2 billion in sales last year, per state data from early 2024. That growth draws big money, but small growers fear it’s a rigged game.
A single sentence sums up their pain: Loyal customers walk away when cartel flower floods stores.
State Regulators Stay Quiet So Far
The Missouri Department of Health and Senior Services issues licenses. They enforce the cap on paper. Yet no probes into Good Day Farm have surfaced publicly.
Plaintiffs demand the court void 41 extra licenses. They also want triple damages for lost sales. Discovery could reveal emails, contracts, and ownership ties.
TerrAscend bought Good Day Farm in 2022 for $29 million. The company touts clean expansion in filings with Canadian regulators. No comment yet on the suit.
Experts watch close. Cannabis attorney Omar Figueroa called similar cases “the Wild West of weed law.” Missouri’s cap aims to stop monopolies like in other states.
Broader Fight for Fair Play in Weed Wars
This suit spotlights cracks in new markets. Illinois and Oklahoma faced license battles too. Voters wanted small businesses to thrive, not corporate giants.
Missouri cultivators shipped 1,500 pounds weekly in peak 2023, state reports show. But dispensary choices decide who eats.
- Cartel perks: Bulk buys, shared logistics.
- Small grower woes: Higher costs, no shelf space.
- Market fix? More enforcement, say critics.
If proven, this could reshape who sells your next joint.
The case heads to early hearings. Watch for motions to dismiss or class certification.
Missouri’s cannabis dream hangs in the balance. Voters greenlit adult use to spread wealth wide. Now, growers fight to keep it real. This cartel claim stirs outrage over lost chances for families and farms.