ST. LOUIS — Recreational cannabis businesses raked in $1.13 billion and created nearly 10,000 new jobs in their first year of sales in Missouri, outperforming many other states’ first-year numbers and setting up Missouri as a serious market competitor to neighbors like Illinois.
The state’s first-year sales totals surpassed those of Illinois, Colorado, New Mexico and New York. Since adults became legally able to buy marijuana for recreational use here in February 2023, Missouri has generated more than . Combined with almost $300 million in medical marijuana sales last year, the state saw over $1.4 billion in total sales.
“Never in our wildest dreams did we imagine $1.4 billion,†said Jack Cardetti, spokesman for industry group MoCannTrade, on moving from medical to recreational cannabis sales. “It takes most states months, if not years, to make that transition.â€
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And even as the novelty of legal marijuana wears off, industry leaders have high hopes for the market in 2024 as they aim to avoid the plateauing sales of other states.
Missouri voters passed medical marijuana in November 2018, then recreational use for adults 21 and over in November 2022.
Since last March, adult-use sales have not dipped below the $90 million per month mark. In January, sales of both recreational and medical cannabis passed $2 billion since medical sales started in 2020.
And about 11,200 jobs have been added to the state since November 2022, bringing the total of Missourians licensed to work in cannabis to 19,029. Some 10,000 of those were created in the past year, according to state figures.
To the east, Illinois saw just $670 million in recreation sales in its first year in 2020, despite having double the population of Missouri. Colorado, the first state to legalize recreational marijuana, reported nearly $700 million for its first year in 2014. More recently, New Mexico announced $300 million in sales in its first year ending last April and New York brought in over $137 million in its first year, in 2023.
Missouri applies a 6% tax on the retail sale of adult-use cannabis. Already, the state has seen over $64 million in sales tax, which goes to state administrative expenses, the expungement of marijuana charges from criminal records, Missouri veterans, the public defender system and drug addiction treatment grants, as outlined in Missouri’s constitution, said Lisa Cox, spokesperson for the state Department of Health and Senior Services.
Local taxes and growth
Some cities and counties voted to tack on an additional 3% sales tax to recreational cannabis sales, beginning last October.
Municipalities are just now beginning to see that revenue. It won’t be a windfall, but local officials said it will help.
Florissant has seen around $38,000 in tax revenue since last fall, said Andy Quinones, the city’s government affairs/senior communications manager. The money is put into a general revenue fund used for miscellaneous projects and amenities, he said.
“It’s better than zero, so any amount of money is good,†Quinones said. “It’s like free money to better our community.â€
St. Ann City Administrator Matt Conley said the city, which has two dispensaries, has seen over $28,000 in taxes since October.
“This is not a plethora of money that’s going to appear,†Conley said. “It’ll settle down, but it’s not going to be this large sum of money.â€
Conley said the money gets put in St. Ann’s general fund to pay for necessities like roads and police. He anticipates the tax revenue will help the city offset inflation on things like property insurance — and even toilet paper and gas.
Since last October, ºüÀêÊÓƵ County has seen about $852,000 in sales tax.
County spokesperson Doug Moore said based on this, it looks like the county will meet or exceed its initial estimate of $3 million per year in recreational cannabis tax money.
To the west, St. Charles County brought in $410,000 during October, November and December. Communications director Kevin Killeen said the county predicted it would make $800,000 for the year, so seeing half of that in three months is promising.
Plus, Killeen said, regular sales tax saw zero growth this past year, so the extra money offers “a little ray of sunshine.â€
A plateau ahead?
In states with mature markets, pot sales often plateau after the first year of legal sales as enthusiasm fades, said Raul Molina, chief operating officer of Mint Cannabis, which has a shop in St. Peters.
In Arizona, where Mint Cannabis is headquartered, numbers a year and a half after legal sales began in January 2021. But Missouri doesn’t appear to be in danger of following suit.
“Usually people stop coming, but Missouri has better retention and is maintaining that bump,†Molina said. “There’s usually a slight decline six or seven months after (legalization), but Missouri has maintained a little longer.â€
John Mueller, CEO of Greenlight Dispensary, which has several area locations, said incremental growth of 1% to 2% monthly would be a big deal in almost every other industry.
“I think we could easily see a billion and a half dollars coming out of the state of Missouri in 2024,†Mueller. “The version of plateauing is different if you’re in the widget or the wheat business.â€
Mueller said he was proud of how Missouri performed, noting that it was the first state to get to a billion in sales as quickly as it did. And he, too, is optimistic about 2024.
“I think you’ll see a slow steady growth of sales throughout ’24 … but you’re obviously not going to see the hockey stick [growth] you saw in 2023,†Mueller said. “I think we’ll have incremental growth this year and hopefully next year.â€
He credited nearby states that have yet to legalize adult-use marijuana, such as Iowa, Kansas, Arkansas and Tennessee, in helping to drive sales into Missouri, something the company has tracked based on the phone numbers and addresses customers use when signing up for loyalty programs. And some of the traffic that was going to Illinois retailers is now heading west as people take advantage of Missouri’s lower tax rate, he said.
Courtney Kruis of St. Peters was buying edibles at Mint Dispensary near the Mid Rivers Mall on a recent afternoon. She said she was shocked when the legalization measure passed in 2022.
“I was really happy,†she said. “It is nice to be able to get whatever I want when I want.â€
She said she buys from the dispensary — often edibles, THC cartridges for vape pens and wax concentrates that can be smoked — about every other week and is always surprised by how busy the store is.
“Most people will continuously buy,†Kruis said. “I’m sure it’ll taper off but it’ll keep booming for a while.â€
Fellow shopper Dylan Harmon said he didn’t vote for the legalization but is now a frequent customer at Mint. Harmon said he knows a few people who had never consumed marijuana before last year but are now regular smokers to self-medicate their stress.
“Even my 94-year-old grandma uses chews,†he said.