Marijuana revenues generated for MO veterans surpass $80 million, while intoxicating hemp & unregulated cannabis sales have produced $0 

Missouri veterans have now received $80,114,830 from legal medical and adult use cannabis sales, while unregulated cannabis sales at gas stations and smoke shops haven’t contributed a single penny to those Missourians who have served in our armed services.

This month Missouri’s Division of Cannabis Regulation (DCR) transferred an additional $3.25 million to the Missouri Veterans Commission for health care and other services for military veterans and their dependent families as outlined in Article 14 of the Missouri Constitution. Since Missouri’s first medical marijuana sale is October 2020 and first adult use cannabis sale in February 2023, Missouri veterans have received $52,978,820 from medical marijuana sales and $27,136,010 in adult use revenues.

During this same time gas stations and smoke shops have begun selling unregulated, intoxicating hemp-derived cannabis products, without paying any marijuana taxes. Additionally, unlike legal marijuana sales, these products aren’t required to be tested for safety, are sold and marketed to minors, and are largely grown and manufactured either out of this state or even in foreign countries. 

Legislators in Missouri are currently debating legislation that would treat these unregulated cannabis products as marijuana under Missouri law to ensure the health and safety of Missourians and generate revenues for veterans and other state and local programs. 

“I couldn’t be prouder that Missouri’s regulated cannabis industry has now generated more than $80 million for the care of my fellow veterans,” said Air Force veteran Mike Pearcy, CEO of Heartland Labs, a licensed infused product marijuana manufacturer located in Buffalo, Missouri he runs with his son and daughter. “Every single legal marijuana product sold in Missouri is 100% grown, manufactured and tested right here in Missouri by Missourians for Missourians. The small cannabis business I run in Southwest Missouri with my son and daughter employs Missourians, pays our taxes, and gives back to our community, all while operating in one of Missouri’s most regulated industries. Increasingly, our competition is unregulated marijuana from China and other foreign countries that pay no marijuana taxes and are sold and marketed to children. That’s just not right.”  

Earlier this legislative session, the Missouri Department of Revenue wrote in a fiscal note that the retailers selling these hemp-derived cannabis should “already owe the marijuana licensing fees and should be collecting the marijuana excise tax and sales tax since Dec. 8, 2022, when Article XIV was adopted.” 

   

Please see the entire analysis from the Missouri Department of Revenue below:

The Missouri Constitution says that all hemp that is not “industrial hemp” is considered marijuana for the purposes of regulation and taxation under Article XIV. Since this proposal clearly defines these hemp-derived consumable products as being a compound found in hemp, they would already be subject to the regulations and taxation of Article XIV.

Since this proposal also says that these products are not made from industrial hemp, which is exempt under Article XIV, then these products would already owe the marijuana licensing fees and should be collecting the marijuana excise tax and sales tax since December 8, 2022, when Article XIV was adopted.

DOR notes that some businesses may not have been remitting the required taxes. DOR notes that Missouri makes up 2.05% of the total U.S. market share of all hemp-derived cannabinoids. In 2023, that was $56,832,841 of the $2,774,925,672 in U.S. sales. Given the marijuana excise tax is allowed at 6% ($3,409,970) the sellers of these products should be remitting this revenue to the state.

DOR notes that sales tax is applied to the final purchase price of an item which includes all other taxes. Assuming the excise tax above, this could result in up to $192,095 in state sales tax revenue as well as local sales tax (4.46%) funds of $202,780 annually.