A marijuana dispensary chain with locations in Springfield and Columbia is again facing allegations of creating a monopoly to take advantage of the Missouri recreational marijuana market.
Damon Toussaint Frost Jr. filed a class-action lawsuit May 4 in Jackson County Circuit Court against Good Day Farm, Missouri’s largest dispensary chain.
Frost, who is identified in the court filing as a Missouri resident who has purchased recreational cannabis from GDF, alleges that the dispensary chain’s and its affiliates have conspired to monopolize recreational cannabis sales in Missouri, resulting in Missouri consumers paying significantly higher prices than they would have in a free market. Frost and other class members — defined in the suit as Missouri citizens who have purchased recreational cannabis products from Good Day Farm or its affiliates in Missouri — are seeking that the “illegal conspiracy” be dismantled and that they be compensated for damages.
Frost is represented by Michael Williams of Williams Dirks Dameron in Kansas City. Williams did not respond to a request for comment as of publication.
A spokesperson for GDF denied the allegations.
“The claims in this lawsuit are baseless and without merit. Our company operates in full compliance with all applicable Missouri state laws and regulations, and we will vigorously defend that record,” the spokesperson wrote in an email Friday, May 15, afternoon. “We will not allow aggressive legal tactics to distract us from what matters most: our mission to deliver uninterrupted service and exceptional products to the patients, customers and employees who rely on us.”
This isn’t the first class-action lawsuit filed against the dispensary chain. In April, two Missouri-licensed cultivators and manufacturers alleged that GDF violated the Missouri Constitution and created a “cartel.”
Like in the April lawsuit, Frost’s lawsuit alleges that the “GDF consortium” — which includes Good Day Farm Dispensaries, Codes Dispensaries, Greenlight, 3Fifteen Primo and Fresh Karma — has control of about 25% of dispensary licenses in Missouri. The Missouri Constitution mandates that entities are limited to owning, controlling or managing no more than 10% of the total dispensary licenses in Missouri.
In order to circumvent the 10% cap, GDF “arranged for investors to invest into limited liability companies” that would then acquire already-licensed entities from owners, court records said, and would then be operated by GDF. The lawsuit alleges that GDF created four limited liability companies.
It also alleges that GDF employees, including the compliance director, general counsel and former director of investor relations, were listed on paperwork for various Codes, Greenlight and Fresh Karma dispensaries.
“Defendants anticompetitive conduct (i) robs consumers of choice and selection of products, and (ii) leaves third parties to compete for a significantly (and increasingly) small sliver of shelf space in the overall Missouri market,” the petition said. “In addition, Defendants misconduct will likely result in fewer competitive brands on the market, substantially reduced diversity of products available and sold, and, ultimately, to fewer choices, lower quality, and higher prices for consumers.”