Analysis: State of the Missouri cannabis industry
Despite uncertain market conditions and unprecedented challenges, the Missouri cannabis market has experienced strong growth since medical sales launched in late 2020, with dollar sales nearly doubling in 2022 alone. Results from the 2022 midterm elections were a win for cannabis reform advocates in the state, with the passage of Amendment 3 legalizing adult-use sales and allowing for the creation of a commercial adult-use market, which saw its first legal sales on February 3, 2023.
While there has been great awareness of other upcoming launches in bigger markets like New York, the fast-growing Missouri cannabis market should not be overlooked. With the addition of adult-use sales, the state is primed for rapid growth and long-term success.
Missouri Cannabis Market Performance
The state of Missouri has extensive retail availability. In March 2023, the medical program had around 3.7 retailers per capita, which is much higher than in other recently launched adult-use markets. For example, New Jersey had less than one retailer per capita as of its launch of adult-use cannabis in April 2022. As of March 2023, the Missouri market has 230 retail stores (207 of which are licensed for adult-use sales), 87 processors and 67 growers, which is a strong foundation for continued expansion.
Missouri, like many other cannabis markets, experienced significant price compression throughout 2022. The comparable average retail prices fell nearly 39% in the Missouri market Between January 2022 and January 2023, a steeper decline than what was seen elsewhere, even in some more mature markets. However, monthly dollar sales in the Missouri market continued to grow despite the drops in average retail price (ARP), reaching an all-time high of about $40 million in December 2022.
Brand and Product Insights
Missouri boasts an impressive selection of brands. BDSA Retail Sales Tracking data shows there were 183 brands in the market as of January 2023, with independent and local brands comprising eight of the top 10 spots. This thriving brand landscape is driven by less restrictive licensing in the state and business-friendly regulators. Despite consumer preference for home-grown brands, MSO’s interest in the Missouri market remains high.
Flower in the state holds a dominant share of category dollars, making up 51% of dollar sales in January 2023 per BDSA Retail Sales Tracking data. Concentrates make up around 25% of total sales, while edibles take 17% and pre-rolled joints take 6%. This share of sales is similar to that seen in other medical markets like Pennsylvania and Maryland. Vape products hold the majority of sales within the concentrate category, bringing in 71% of concentrate dollar sales in January 2023.
The Future of the Missouri Cannabis Market
Missouri launched adult-use sales in February 2023, giving the state the second-shortest timeline from legalization to launch of adult-use sales, behind only Arizona. Missouri’s medical program offers a solid structural foundation upon which to build. With a competitive brand and product landscape, widespread retail availability and proximity to states with limited cannabis access, Missouri is expected to have a successful first year of adult-use sales.
The state holds several distinct advantages despite Missouri having a lower total addressable market compared to other similar markets due to a much smaller population size and fewer annual visitors. Although Missouri borders the adult-use Illinois market, it also borders seven other states that are home to over 19 million residents over the age of 21. Cross-border shoppers are expected to strengthen Missouri’s legal sales, especially in the coming years.
In 2023, Missouri adult-use sales are expected to bring in $650 million, bringing total sales for the year to approximately $958 million. BDSA forecasts Missouri to become a billion-dollar cannabis market in 2024, with total sales expected to reach $1.1 billion and grow to $1.4 billion by 2026.