Missouri Recreational Marijuana Sales to Legally Begin in February

Missouri Recreational Marijuana Sales to Legally Begin in February

Recreational Pot Sales in Missouri Could Hit $900 Million in 2026

Sales of recreational marijuana are set to begin in Missouri on February 6. This follows the passing of Amendment 3, the Marijuana Legislation Initiative, after 53% of the state’s voters approved it on November 8, 2022. (Source: “Missouri Amendment 3, Marijuana Legalization Initiative (2022),” Ballotpedia, last accessed January 23, 2023.)

This makes Missouri the 21st U.S. state to legalize recreational cannabis.

The new measure allows adults over the age of 21 to purchase marijuana for recreational use. The measure also allows people with certain cannabis-related offenses to petition for release from prison or parole and probation, and to have their records for those offenses expunged.

This is a step up from the policy that Missouri enacted on December 8, 2022, in which adults can legally possess up to three ounces of marijuana. (Source: “Adult Use FAQs,” Missouri Department of Health & Senior Services, last accessed January 23, 2023.)

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On December 8, retail sales of recreational cannabis still weren’t legal in the state. The Missouri Department of Health & Senior Services only started accepting requests from existing medical marijuana facilities to transition into recreational marijuana dispensaries that day.

The department has 60 days to approve those types of requests, which means recreational cannabis sales could begin in Missouri in early February. Once approved, each retailer can determine when it will start selling recreational pot.

Missouri had previously become the 32nd U.S. state to legalize medical marijuana after voters approved Amendment 2, the Medical Marijuana and Veteran Healthcare Services Initiative, in the November 2018 midterm elections. (Source: “Missouri Amendment 2, Medical Marijuana and Veteran Healthcare Services Initiative (2018),” Ballotpedia, last accessed January 23, 2023.)

Medical cannabis sales in Missouri only legally began on October 16, 2020.

Amendment 2 allows patients with cancer, epilepsy, HIV, and certain other conditions to access medical marijuana. The measure allows veterans with post-traumatic stress disorder to use medical marijuana.

The amendment also allows individuals with a medical marijuana license to grow up to six plants at home. Caretakers can legally grow up to 18 cannabis plants.

At the end of 2022, Missouri had issued 204,165 medical marijuana licenses to patients. (Source: “Data and Reports,” Missouri Department of Health & Senior Services, last accessed January 23, 2023.)

At the same time, the state had approved 357 marijuana business licenses, including 50 for cultivation facilities, 78 for manufacturing facilities, eight for testing facilities, 26 for transport facilities, and 195 for dispensaries.

Legal cannabis sales are expected to add a lot of money to Missouri’s government coffers.

Amendment 2 set a medical marijuana sales tax at four percent, with a portion of the proceeds funding veterans’ health care. Amendment 3 set a six-percent tax on the retail price of recreational weed.

Medical marijuana sales in the state were $215.1 million in December 2021 and rose to $605.3 million in December 2022. (Source: “Monthly Medical Marijuana Dispensary Cumulative Sales,” Missouri Department of Health & Senior Services, last accessed January 23, 2023.)

Depending on the source, legal recreational cannabis sales in Missouri are projected to reach $277.0 to $550.0 million in their first year. In 2026, recreational marijuana sales in the state could hit $800.0 to $900.0 million. (Sources: “2022 Midterms Cannabis Recap: The Good, the Bad, and What It Means for Legal Weed,” BDSA, November 10, 2022 and “Marijuana Legalization Wins in Maryland and Missouri, but Industry Loses Elsewhere,” MJBizDaily,” November 9, 2022.)

Analyst Take

While medical marijuana has been legally sold in Missouri since October 2018, sales of recreational cannabis in the state are only expected to begin this February.

Missouri is uniquely positioned to capture a large portion of recreational cannabis sales. The production tax rate in nearby Illinois is significantly higher than in Missouri, and there’s no legal recreational pot industry in the nearby states of Iowa, Kansas, Nebraska, and Tennessee.

This all means Missouri is forecast to bring in millions of dollars of new tax revenue.

The November 2022 recreational cannabis electoral wins in Missouri and Maryland (and city-level wins for pot decriminalization measures in Texas) show that marijuana legalization is something that both sides of the political aisle want in the U.S.