Opinion: A 6-month look-in to Missouri’s rec marijuana industry – Springfield Business Journal

Opinion: A 6-month look-in to Missouri’s rec marijuana industry – Springfield Business Journal

Due to the passage of Amendment 3 in the November 2022 election, it became legal on Dec. 8, 2022, for anyone age 21 or over to purchase, possess or be under the influence of marijuana in Missouri. However, it was not until February that licensed dispensaries were authorized to sell marijuana to the public. The demand far exceeded expectations.

Big business
In February and March, dispensaries reported to the Missouri Department of Health and Senior Services over $165 million in adult-use sales and an additional nearly $64 million in medical sales, for a revenue total topping $229 million. By year’s end, dispensary sales are estimated to exceed $1 billion.

Use whatever pun comes to mind to describe this industry, but the numbers are no joke. Marijuana is big business in Missouri. Thousands of jobs already have been created statewide, and it is estimated the industry will produce an additional 16,000 jobs in Missouri this year alone. In addition to job creation, there is significant tax revenue for the state of Missouri and municipalities. While state sales tax on adult-use marijuana is set at 6%, local governments can impose an additional tax of up to 3%. A number of cities and counties passed such a tax in April elections.

Licensing, round two
A frequently asked question now is whether there will be additional commercial licenses issued. Under Amendment 3, every current holder of a commercial medical marijuana license – in the cultivation, manufacturing, dispensary and testing categories – may convert their existing license to a comprehensive license that allows them to operate in the medical and adult-use spaces. DHSS controls the number of commercial licenses issued, subject to the minimums set forth in the Missouri Constitution. To date, there has not been an indication from the state that additional commercial licenses will be issued.

However, there does remain a pathway to enter the commercial side of the industry: microbusiness licenses.

Amendment 3 provides that the department must issue at least 144 microbusiness licenses in a phased rollout that begins this year and ends in 2025. Initially, the department will issue no fewer than six microlicenses per U.S. congressional district. Those microlicenses will be awarded via a lottery, and if an applicant is unsuccessful, their $1,500 application fee will be refunded, assuming they met the criteria to apply.

The microlicenses application forms are scheduled to be available in June at Cannabis.Mo.gov. To qualify, an applicant must fall within one or more identified categories, such as having a net worth of less than $250,000, being a service-disabled veteran or residing in an economically distressed area.

While these microlicenses are designed for those negatively impacted by prior marijuana prohibition and/or those of lower economic means, those fortunate enough to win the lottery will face the same hurdles as any another license holder: the need for significant capital resources to build out their facilities and comply with the state’s regulations.

This poses an issue because marijuana remains illegal under federal law and, as a direct result, traditional forms of financing are not available.

Legal pacing
With the adult-use industry being only a few months old, the landscape, including the legal landscape, is ever changing. Local governments are passing ordinances concerning public use, and bills are being drafted to address the proliferation of Delta 8 THC products, which are similar to traditional Delta 9 THC products that are sold in dispensaries. 

The marijuana industry is undoubtedly big business, but it is also ever changing and evolving.

With the majority of Missouri’s neighboring states having only medical marijuana programs, or none at all, Missouri is emerging as a leading state in the Midwest for marijuana.

Jay Preston is an attorney and shareholder with Carnahan Evans PC. He can be reached at [email protected].

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