Category: Industry

Missouri’s medical cannabis industry has come a long way since its legalization in 2018. Here is exactly how we got here:

2014: SB-491 Passes to Decriminalize Less than 10 Grams of Marijuana

In 2014, Missouri passed Senate Bill 491. This declared possession of less than 10 grams of cannabis a misdemeanor crime, resulting in a $500 fine and no jail time. The bill, however, somehow passed through without receiving Governor Jay Nixon’s signature. It did not officially go into effect until 2017. 

2017: SB-491 Officially Goes into Effect – 10 Grams of Cannabis or Less Results in a $500 Fine

This bill went into effect in January 2017.

November 2018: Missouri Legalizes Medical Marijuana

The November elections brought medical marijuana to Missouri. Amendment 2 modifies the Missouri constitution, signaling permanence and an intent to make medical marijuana accessible to eligible Missourians.

There were two other measures on the Missouri ballot. One of the losing measures, Amendment 3, set a 15% tax on medical marijuana and funds would go to researching cures and treatment for cancer and other diseases. This amendment also would not have allowed for home cultivation like Missouri’s current laws do.

Proposition C would have taxed medical marijuana sales at 2% and only allowed people with a limited list of certain conditions to qualify for a medical marijuana card. Amendment 2 passed by a margin of 66% to 34%.

December 2018: The 2018 Farm Bill Legalizes Hemp Nationwide

The 2018 Farm Bill was important to not only Missouri, but the nation as a whole. Senate Majority Leader, Mitch McConnell, spearheaded the 2018 Farm Bill, effectively legalizing hemp and removing it from the federal-controlled substances list. The bill also addressed other aspects of farming unrelated to hemp, like subsidiaries and others.

June 2019: Patients and Caregivers Begin Applying for their Medical Marijuana Cards in Missouri

According to Amendment 2, the Department had until July 6, 2019 to open applications for medical marijuana patients and caregivers. They were six days ahead of schedule on June 28. The Department has officially been taking applications for over a year, meaning many of Missouri’s patients have already gone through the annual renewal process.

August 2019: Facility Application Window Begins (and Ends)

Missouri began accepting applications for medical marijuana facilities on August 3. Immediately, the flood of applications and want-to-be cannabis businesses became apparent. There were 12 applications received in the first 48 hours. The deadline to submit applications was eventually extended, with some citing technical difficulties.

This caused a lot of uproar from applicants who felt their months of hard work preparing for the application process was undervalued and disregarded. Many applicants paid early bird fees to be ready to hit submit on their application the moment they were able to. On average, across plant-touching businesses, applications submitted per applicant equaled 1.5 with dispensaries being a little higher at 1.7.

December 2019: Facility Licenses Start Getting Approved

Testing was the first group of licenses that were awarded. The testing facilities are responsible for testing all aspects of the plant, such as THC levels, pesticide use, heavy metals, etc. Missouri awarded ten applicants licenses to test medical marijuana, eight more than Amendment 2’s required minimum of two facilities. There were 17 applicant groups for testing facilities – so seven did not receive a license.

After testing, transportation licenses were awarded. Transportation facilities are those certified to transport medical marijuana, like to the dispensaries for sale, testing facilities to test, or manufacturers to process the flower into products. What is unique about transportation licenses is the ability to apply at any time. The remaining sectors of the cannabis industry had a “one and done” application window. The majority of transportation applicants received a license during their initial application period, with 21 approved licenses and three denied.

The month of December brought one more approved license group: cultivation. Missouri approved 60 cultivation operations across the state, with 14 of them being in the St. Louis area. Only a small percentage of cultivation licenses were awarded out of the 600 applicants who applied.

December 2019: Lawsuits Begin

On December 27, Sarcoxie Nursery made headlines when they sued the Missouri Department of Health and Senior Services. Sarcoxie Nursery felt they were wrongly denied a license to cultivate medical marijuana. The founders of Sarcoxie Nursery, the Callicoats, felt large corporations took over Missouri’s medical marijuana industry and pushed Missourians and the grassroots movement aside.

“Our family, along with tens of thousands of advocates from across Missouri, fought hard to legalize medical marijuana to bring healing to patients, as well as much-need economic opportunities to our local communities and to our state,” Dr. Callicoat said. “These large corporations that now have been awarded the lion’s share of the cultivation licenses were not involved in the effort either with time or money. It is wrong, and it is not what Missourians intended when they voted to legalize medical marijuana.”

January 2020: Remaining Licenses Awarded, Restraining Order Denied

On January 10, 86 approved manufacturing licensees were notified of their win. Upon manufacturing licenses being awarded, even more lawsuits took place on behalf of those applicants who felt they were wrongly denied, Sarcoxie included. A judge ultimately denied Sarcoxie’s request for a restraining order.

Seed-to-sale licenses were awarded in Missouri on the 13th of January. Seed-to-sale systems will track plants from the beginning of their life to the sale made in a dispensary.

Missouri approved 192 licenses for medical marijuana dispensaries in Missouri on January 27. DHSS ended up having to release a revised list of approved dispensaries due to one group accidentally receiving 6 licenses, 1 license over the 5 license per group cap. The freed-up license was given to LSL Management LLC. North Medical Group was honored to be one of the 192 licenses chosen to provide medical marijuana to the people of Hillsboro.

June 2020: BeLeaf Becomes First Cultivation Operation to Put Plants in the Ground – The Industry Has Begun

On June 11, St. Louis-based BeLeaf was the first cultivation operation to begin growing plants. The company already has a hemp cultivation operation and transitioned into medical marijuana. Other companies continue to cross their t’s and dot their i’s.

What Does the Future Hold?

With nearly 200 dispensaries in the state and adult use on the horizon, the potential for the marijuana industry in Missouri is infinite.

Due to cannabis’s illegal status throughout the years, there hasn’t been a significant amount of data surrounding cannabis users – especially about where they buy their marijuana. Green Horizons, a cannabis data analytics company, released an in-depth white paper highlighting some aspects of a cannabis user’s experiences including why they use marijuana, how old they are, and more. One interesting talking point is the overview of the dispensary landscape. Here are some interesting tidbits:

Locally-Owned Dispensaries Take Precedence Over Chains and Franchises

The report surveyed people that live in a state where both medical and recreational use are legal, and therefore have the most options when it comes to purchasing cannabis. According to the report, 52% of people buy from a local, independent retail store, as opposed to 42% who buy from a franchised or chain dispensary.

This is likely due to the forward-thinking of cannabis consumers in terms of small businesses and sustainability. Cannabis consumers see the value in supporting local business owners and they develop a relationship with those working at the store.

Word-of-Mouth is the Biggest Driver of Traffic to Dispensaries

The survey showed that 47% of customers learned about the store they shop at from a word-of-mouth recommendation. In the age of digital advertising, tried-and-true recommendations to others are still powerful in this budding industry. 32% of people said they learned of their dispensary simply by walking or driving by it, proving that location is also an important factor for retail owners to take into consideration.

Google Maps/reviews are the second-highest driver of traffic, clocking in at 34%. In other words, when people search “dispensaries near me,” they choose from one of the first few listings they see on Google Maps. Surprisingly, 32% said they learned of their current dispensary because their healthcare professional recommended it to them. This is great news for the industry as it shows that more and more healthcare workers are getting on board with the truth of cannabis being a strong and effective medicine.

Weedmaps and Leafly also made the list, with 31% and 21% (respectively) learning about where they shop from these online platforms.

High-Quality Products are the #1 Reason People Choose a Dispensary

It may seem obvious, but most people choose to shop at a store that carries high-quality products. 67% of those surveyed gave this reason as their answer. The second-highest form of motivation is that a dispensary is close to their home or work – proving once again how location relates to overall success.

The third reason is having a consistent product selection, with 61% of those surveyed having said that this is important to their decision-making process. When consumers try a cannabis product and like the way it makes them feel, they buy more. When they buy more, they expect it to work the same way it did before. Offering a consistent product selection is an easy way for dispensaries to build trust among their consumers.

Additional Reasons for Choosing a Dispensary

Prices are also a part of how customers choose a dispensary. While there are six reasons that rank of greater importance in this report, 50% of those surveyed said they chose the dispensary that has the lowest-priced products.

Here are several other reasons for a consumer’s choice in where they shop:

• The store carries product brands that they prefer.
• The budtenders are very knowledgeable.
• They like the vibe the dispensary offers.
• The store always brings in new products.
• The store has a loyalty program or perks.
• They can order online to pick up at the store.
• They have a good relationship with the budtenders.

On a final note, 47% of people living in medically and recreationally legal states said they buy their marijuana from an individual. This is nearly half of users – which signals uncharted territory for dispensary owners to consider and reach out to.

The medical cannabis industry in Missouri started off with a bang. The state brought in $13 million in application fees alone, with most of these applicants not receiving licenses and losing out on thousands of dollars. The licensing fees were non-refundable, so applying for a cannabis business license was a huge risk for many applicants.

An Exceptionally Large Number Of Applicants

Missouri’s Department of Health and Senior Services (DHSS) were blown away by the amount of applications received. Randall Williams, a physician who serves as the director of DHSS, released a statement following the licenses being awarded. He said the state received an “exceptionally large number of applicants.” If the sheer number of applications is any indicator of the industry, it will be a lucrative and thriving one.

As of July 13, 2020, Missouri had over 55,000 approved patients and not a single dispensary is open. Cultivation operations are just beginning to put plants in the ground.

The current number of patients the state has approved far exceeds the number that was predicted. DHSS commissioned a study that estimated 19,000 patients would be approved during the first year, with the study predicting 22,500 to be approved by the end of 2021. There is already such a demand from Missourians for legal access to medical cannabis. It is logical to assume that as time goes on the numbers will continue to grow and cannabis as medicine will become more mainstream in the state of Missouri.

Learning from Maine

Maine legalized medical marijuana in 1999, becoming one of the first states in the US to do so. According to this resource, Maine had 51,324 medical marijuana patients as of 2018. Missouri’s population is a lot larger than Maine’s and while it makes sense mathematically that there would be a larger number of medical marijuana patients in the Show-Me State, it is interesting to look at Maine’s decades-long program. Here we can gain an understanding of just how big Missouri’s cannabis industry could really be as time goes on.

Predictions on Missouri’s Medical Cannabis Market

According to an article published in Greenway Magazine by attorney Christopher McHugh, “Some industry participants are already predicting an initial wholesale price for flower in Missouri of $4,000 per lb. or more…” Publications like Marijuana Business Daily have projected Missouri’s medical cannabis market to generate $300 million in annual sales within a few years of its launch. It is estimated that the Missouri medical cannabis industry will create around 4,000 jobs and create an economic impact of more than $500 million, according to MoCannTrade.

Missouri’s Future in the Adult-Use Cannabis Industry

New Approach Missouri has been collecting signatures in the state to put adult-use cannabis on the ballot for the November election, so it is at the beginning stages. New Approach is the same group that collected signatures to get medical cannabis on the ballot in 2018.

Unfortunately, due to COVID-19, the organization has put off collecting signatures and aims to be on the ballot in 2022. New Approach began collecting signatures in January – so they were only working at it for a few months before COVID-19 forced them to come to a halt.

“Unfortunately, while there is widespread support from Missourians to tax and regulate marijuana, there is currently no practical way during the COVID-19 outbreak to safely gather the 170,000 plus signatures needed over the remaining four weeks to put our initiative on the Missouri ballot in 2020,” New Approach’s campaign manager, John Payne, told Marijuana Moment. “We know Missourians want this and our supporters from every corner of this state will be back next cycle to put this on the 2022 ballot and finally bring Missouri the benefits of a safe and regulated adult-use marijuana program.”

The initiative would allow adults that are 21+ years of age to purchase cannabis for recreational use at a licensed Missouri retailer. It also includes the option for adults to personally cultivate up to three cannabis plants at home.

Payne continued, “We’ve seen tremendous excitement from across the state for ending the prohibition of adult-use marijuana. Missourians support taxing and regulating marijuana in order to give law enforcement additional resources to focus on serious crime. Eleven other states, including our neighbors in Illinois, are currently reaping the tax revenue from regulated marijuana that we know would be so beneficial to the Show-Me-State.”

Just a side note, Missouri isn’t the only state having to stop efforts to amend or create cannabis laws due to COVID-19. California’s initiative to amend their current cannabis laws has been put on pause, Nebraska’s attempt to legalize medicinal cannabis has been stopped, North Dakota has also stopped their efforts to legalize, and many more states have followed suit. There aren’t too many statistics available for the economic benefit of adult-use cannabis in Missouri. However, Illinois made $75 million of recreational cannabis sales in just two months of being in operation.

Head North

If you’re looking for a medical marijuana dispensary in Missouri, head North! Two North Dispensaries, in Hillsboro and Pevely, are coming soon!