Are There Costs to Missouri’s Rush to Begin Adult-Use Cannabis Sales?

    On February 2, Missouri state regulators announced a surprise decision to issue their first adult-use cannabis dispensary licenses the following day, a few days earlier than expected. It allows already-operational medical marijuana businesses—which were approved in 2018—to get a head start by selling to non-medical customers before anyone else. There are fears that this could make it hard for smaller businesses, including those operated by social equity applicants, to compete in the years to come.

    On February 3, the state’s cannabis regulatory division issued hundreds of licenses across the industry, including for manufacturing and cultivation, with 207 licenses alone for “comprehensive retail.” Sales began immediately.

    Missouri already has 212 licensed medical marijuana dispensaries, and according to MJBizDaily, nearly all applied to expand their operations so they could sell to adult-use customers. Although many states have offered “early mover” privileges to medical dispensaries in the process of fully legalizing, Missouri may be unique in terms of how completely its medical market is transitioning.

    Cannabis dispensaries in the state made $12.6 million in revenue just over the first weekend of adult-use sales, according to the Missouri Cannabis Trade Association (MoCannTrade), with two out of every three dollars spent by non-medical customers.

    Missouri’s law has protections, absent in other states, that may promote geographically widespread access.

    Prices in Missouri are much lower than in neighboring Illinois, which implemented adult-use legalization at the beginning of 2020. The St. Louis Post Dispatch estimated that a one-eighth ounce package costing $70 in Illinois is just $40 in Missouri, and prices can be lower still. This is partly because the Missouri’s 6 percent state tax on retail sales is one of the lowest in the nation. Any additional local tax must be approved by a ballot initiative first, and is capped at 3 percent.

    And there’s no doubt business in Missouri will benefit from the fact that Illinois aside, none of the eight states it borders have legalized for adult use, while some, like Kansas, don’t permit even medical use. 

    In a welcome step, Missouri’s law has protections, absent in other states, that may promote geographically widespread access. Cities and towns cannot ban local cannabis stores at all easily. A municipality would have to hold a ballot measure to implement a ban, which would have to pass with at least 60 percent of voters in support. States like New York and New Jersey, in contrast, allow city and town governments to ban stores without asking voters. The result is a “gerrymandered” map of cannabis stores in New Jersey, where seven out of ten municipalities completely banned adult-use dispensaries.

    But the question of who gets licenses in Missouri is an area of concern. The measure that voters approved in November 2022 meant the state agreeing to issue a limited number of new dispensary licenses. But most will go to the couple hundred licensed medical marijuana dispensaries that have priority access.

    On top of that, however, the state will also add 144 “microbusiness” licenses, which are reserved for “historically disadvantaged populations.” According to The Kansas City Star, these will be awarded by lottery, and the eligibility requirements include metrics for low income, unemployment and nonviolent marijuana arrests and convictions, as well prioritization for disabled veterans. More guidelines will come in June, and applications should open in September. The144 licenses will be divided between dispensaries and wholesale facilities, and after reaching the total the state may decide to issue more, but isn’t required to. 

    Medical marijuana companies get a years-long head start before others can compete for market share.

    These microbusiness licenses will then be slowly doled out, starting in October 2024 and continuing into 2026.

    In other words, medical marijuana companies get a years-long head start before others can compete for market share. Because of this and other concerns—including over the efficacy of record expungement provisions—major organizations like the Missouri Democratic Party, the state NAACP chapter and the St. Louis American chose neither to endorse nor oppose the legalization ballot measure.

    Right now, it’s too early to be certain whether Missouri’s rules will create the highly consolidated cannabis market that some activists fear, or to what extent the microbusiness licenses will eventually benefit disadvantaged Black, Brown and low-income applicants.

    Relatedly, it remains to be seen how many cities and towns will ban cannabis stores despite the challenging process to do so. If we reach a point where vast swathes of rural Missouri shut their doors—and dispensaries are forced to cluster in major urban areas like Kansas City and St. Louis, with much higher commercial real estate costs—that will also have a big impact on the fight for an equitable cannabis market.



    Photograph by Pablo Flores via Wikimedia Commons/Creative Commons 2.5

    • Alexander is Filter’s staff writer. He writes about the movement to end the War on Drugs. He grew up in New Jersey and swears it’s actually alright. He’s also a musician hoping to change the world through the power of ledger lines and legislation. Alexander was previously Filter‘s editorial fellow.

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