Missouri set to study whether marijuana industry should expand

In a request for proposals issued by the Missouri Department of Health and Senior Services Friday, the state is seeking a vendor to conduct a survey of sales and locations of the state’s regulated marijuana businesses.

“The market study may include recommendations on how to meet the demand of regulated marijuana in the state to ensure a competitive market while preventing over-concentration of marijuana facilities within any local municipality,” the request notes.

Missouri voters legalized recreational marijuana sales in November 2022. Last year, the industry surpassed initial projections for sales, revenue and the number of people who have medical marijuana cards.

Cannabis companies sold nearly $1.5 billion worth of product in 2024, resulting in $145 million in tax revenue for the state and nearly $100 million for local governments.

The industry employs an estimated 22,000 workers.

Under the constitutional amendment approved by voters in 2022, there can be no fewer than 24 dispensaries in each of the state’s eight congressional districts in order to ensure companies make the product available in all parts of the state.

The license cap was designed, in part, to make businesses less fearful of an overly saturated market.

The state also has issued microbusiness licenses, which would provide a path to legal marijuana facility ownership for individuals who might not otherwise easily access that opportunity. If the industry expands, those license holders could be the first in line for full-blown dispensary licenses.

The department is on track to issue 144 microbusiness licenses after a third round of applications is accepted later this year.

According to the request for proposals, the survey must determine whether the state should lift or ease any marijuana license limits based on the expected supply and demand for the license type.

That could mean the state’s growers and manufacturers, who also are limited by license, could expand.

Other questions that will be asked include what factors encourage a competitive marijuana market and whether any markets are overconcentrated.

“What factors encourage interest in building marijuana facilities in impoverished or underserved areas?” the request notes.

But, the main industry trade group, said Monday that the microbusiness license holders should first get a chance to compete before the industry expands.

“The first round of those licenses were issued in 2023, but unfortunately not a single microbusiness product has been sold in Missouri yet,” said Andrew Mullins, executive director of MoCannTrade. “As a trade association, we’d like to see these 144 small businesses have the ability to succeed before putting more obstacles and competition in their way.”

The final report, which is due next year, also will include the frequency of purchases made for medical and adult use and the amount of product people purchase per transaction.

A second phase of the study would outline the economic impact of the industry, including the number of type of jobs created directly and indirectly from the legalization of marijuana.