Payne was tied to more than 300 social equity business license applications.
A political operative who helped get both medical and recreational marijuana legalized in the state has been accused of taking advantage of social equity license candidates with “predatory” contracts.
The former campaign manager for New Approach Missouri, John Payne, who is white, led both the 2018 medical legalization campaign and the 2022 recreational cannabis campaign. Since then, he’s founded Amendment 2 Consultants – in reference to the ballot measure which legalized medical cannabis six years ago – and is part of the Missouri Cannabis Trade Association.
But Payne has now become a target of social equity advocates who say he is abusing his position to take control of up to six business permits that were intended for minorities harmed by the war on drugs, the Missouri Independent reported.
Payne was tied to more than 300 social equity business license applications when microbusiness permits were up for grabs, and applicants working with Payne won six of those licenses. However, some of those applicants had signed contracts with Payne that guaranteed he and his partners would get more than 90% of profits from the businesses, the Independent reported. That directly undercuts the state mandate that social equity businesses be “majority-owned and operated” by the eligible applicants, and not financiers such as Payne, the Independent reported.
Under the terms of the contract, if the social equity candidates wanted to break out of it, they’d have to pony up nearly a $1 million separation fee.
Payne contended to the Independent that none of the six applicants who won licenses signed that particular contract, but the Independent found that at least one signed a “nearly identical contract.”
“This is indentured servitude. That’s what this is,” Adolphus Pruitt, president of the St. Louis NAACP, told the Independent after reviewing the contracts.
Pruitt compared Payne’s contracts with social equity candidates to “the slave owner giving me some land to work on. It’s their company, they put up the capital, they’re preparing the applications, they’re paying the fees, they’re managing the business. And if at any time me as the slave fails to do something, I owe them.”
Another NAACP-affiliated attorney, Nimrod Chapel, said he believes the contracts meet the Missouri state definition of “predatory.”
“I find it incredibly disappointing that this section of licensees is getting monopolized by John Payne,” Chapel said, “the very person who was in the middle of the campaign for cannabis legalization and used this as a way to gain minority buy-in.”
Payne defended the use of such contracts to the Independent, and said a “relatively small number” of the 300 applications he worked on relied on such agreements.
“The applicants in these cases were typically personal contacts of our team members with whom we could envision a mutually beneficial long-term partnership,” Payne told the Independent. “I see it as a partnership.”
Nevertheless, the Missouri Division of Cannabis Regulation said it opened an official investigation into three of the microbusiness licenses given out to ensure that they remain “majority owned and operated by eligible individuals,” an agency spokesperson told the Independent.
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