Missouri marijuana dispensaries experience ‘dramatic increase’ in out-of-state customers

April 30, 2023 · Springfield News-Leader

Recreational marijuana has been legally available in the Show-Me State for almost three months and in Springfield dispensaries, sales remain steady. Operators say a driving factor in the consistently high demand has been an influx of out-of-state customers who cross the border to purchase Missouri marijuana.

Flora Farms President Mark Hendren said “the numbers are pretty steady” for the first 90 days that recreational products have been on the market. Flora Farms operates four dispensaries in Springfield, Humansville, Ozark and Neosho.

Hendren said the company’s dispensary in Neosho, which is about 40 miles north of the Arkansas border and 20 miles east of the Oklahoma border, has experienced a “dramatic increase” in sales from out-of-state customers, who he estimated account for 50-60% of the Neosho dispensary’s business.

Overall, Hendren said, the Neosho location’s sales are nearly double that of Flora Farms’ other stores. Since February, Flora Farms’ four dispensaries have experienced a 200-300% increase in sales. In Neosho, the sales spike has been more like 500-600%, which Hendren attributes to customers from across state lines.

Cody Shackleton, director of operations and marketing for The Farmer’s Wife, said the Springfield-based company has also experienced a “noticeable increase” in out-of-state customers since February, specifically at its West Plains and Mountain Grove locations.

Shackleton said budtenders at these locations have collectively heard that out-of-state customers are finding their dispensaries through online platforms like Leafly and Weedmaps.

Tracking customers who purchase medical marijuana is different than tracking customers who purchase recreational though, which makes gauging the actual number difficult, Hendren said. To purchase medical marijuana, patients must be registered with the state and present their medical marijuana card at the dispensary, so this information is tracked. But customers purchasing recreational marijuana only have to present a valid government-issued ID.

Some dispensaries, like Flora Farms, ask recreational customers if they would like to voluntarily provide information about themselves for marketing purposes, but not all customers participate.

How is Missouri’s marijuana policy affecting neighboring states?

Of the states that share a border with Missouri, only Illinois has legalized marijuana to a similar extent, meaning most visitors have better access in the Show-Me State than they do at home.

Legal medical marijuana went on sale in Arkansas in 2019. Scott Hardin, spokesperson for Arkansas’ Medical Marijuana Commission, said Arkansas has not seen a drop in sales since the legalization of recreational marijuana in Missouri. He said March 2023 was the state’s largest month for sales yet, at about $25 million, and comes on the heels of record sales in 2022 totaling $276 million.

Hardin said the commission has only received one comment of concern since recreational marijuana became available in Missouri. That comment was from NEA Full Spectrum, a medical marijuana dispensary in Brookland, Arkansas, about 45 minutes south of the Missouri border. The dispensary cited a 15% decline in sales since recreational products went on sale in Missouri.

“Although there may be individual dispensaries that are feeling the Missouri impact, overall sales are so strong that we anticipate another record year,” Hardin said.

The News-Leader contacted NEA Full Spectrum for a comment but did not hear back by press deadline.

Porsha Riley, public information officer for Oklahoma’s Medical Marijuana Authority, said it is still too early to determine how Missouri’s legalization of recreational marijuana is impacting Oklahoma’s industry.

How are bordering states enforcing public safety?

For the most part, monitoring for impaired drivers or drivers in possession of marijuana purchased out of state has not changed much, according to public safety agencies in some of Missouri’s neighboring states.

Kansas Highway Patrol Public Information Officer Lt. Candice Breshears said the agency pays attention when bordering states legalize marijuana, but business continues as normal. The agency continues to provide its troopers and officers with the “most current and reliable methods” for identifying and apprehending impaired drivers, she said.

The Kansas Department of Transportation, along with fellow departments of transportation in Nebraska, Iowa, Arkansas and Missouri, participated in a 420 Enforcement Period from April 19-23, which is held each year. During this period, enforcement of marijuana impairment and possession is heightened.

Iowa State Patrol Public Information Officer Sgt. Alex Dinkla said state patrol troopers are conducting routine patrol every day and if a trooper finds an individual in unlawful possession of marijuana, an arrest can be made. Dinkla did not indicate that the Iowa State Patrol has developed any new plans for handling marijuana exiting Missouri into its state.

Nebraska State Patrol Public Relations Director Cody Thomas said no internal changes have been made there with regard to Missouri’s legalization of recreational marijuana. He said the state typically sees marijuana coming into the state from the west, specifically from Colorado, California and Oregon.

The News-Leader also reached out to the Tennessee Department of Safety & Homeland Security, Kentucky Justice and Public Safety Cabinet and Arkansas Department of Public Safety for comment on any plans to enforce a stricter watch on marijuana exiting Missouri into their states. The News-Leader did not hear back from these departments by press deadline.

Marijuana policy varies in the eight states bordering Missouri. In Kansas, Nebraska, Tennessee and Kentucky, all forms of marijuana remain illegal.

Iowa, Arkansas and Oklahoma all allow some variation of medical marijuana, but how medical products are obtained and how much a patient can acquire differs. In Illinois, marijuana is legal for both medical and recreational use.

Iowa

Iowa’s Department of Health and Human Services operates a medical cannabidiol program, allowing for the manufacture and sale of certain medical cannabis products. The program was established in 2018.

Only certain forms of medical cannabidiol products are legal for consumption in Iowa. Flower and THC-infused gummies are now allowed, according to the Iowa Department of Health and Human Services. Of the forms that are allowed (vaporizable, oral, topical, nebulizable inhaled and suppositories), there is not a product quantity possession limit for medical cannabidiol patients.

In November 2022, Iowa’s Medical Cannabidiol Board reported a total of 14,466 active medical cannabidiol cardholders. Five dispensaries and two manufacturers operate in Iowa.

Iowa has a “drug stamp” tax of $5 per gram of processed marijuana. Proceeds from this tax go to the Iowa General Fund.

Arkansas

Arkansas’s Department of Finance and Administration operates a Medical Marijuana Commission. Arkansas’ medical marijuana program was approved by voters in November 2016, but the first dispensary did not open until May 2019.

Arkansas’ marijuana legislation sets a cap of 40 dispensaries and eight cultivators in the state. Hardin said, as of Tuesday, 38 dispensary licenses and all eight cultivation licenses have been distributed.

Arkansas’ medical marijuana patients are limited to 2.5 ounces of product from a dispensary over a 14-day period, according to the Arkansas Department of Health.

Arkansas collects a 6.5% sales tax and 4% privilege tax on marijuana products sold at dispensaries. The majority of this funding went to the University of Arkansas for Medical Sciences in Little Rock but will now, after recent legislation, be redirected to “ensuring students on free and reduced lunch continue to have access to these meals and creating more opportunities for medical residencies throughout the state,” Hardin said.

Oklahoma

Oklahoma’s medical marijuana program is operated by the Oklahoma Medical Marijuana Authority, established in June 2018.

When marijuana legislation was first added to the state’s constitution, caps on dispensary and cultivation licenses were not enforced. In addition to no licensing caps, commercial licenses for dispensaries and cultivators were only $2,500, making them quite accessible. As of Friday, April 21, there were 2,707 active dispensary licenses and 8,032 active cultivation licenses in Oklahoma, according to Riley.

In an effort to better control the number of marijuana business licenses in the state, a moratorium on new marijuana licenses was instituted on Aug. 26, 2022. The moratorium is set to last two years. During this period, the state will not accept any new marijuana business license applications.

Oklahoma’s medical marijuana patients are limited to three ounces of product at a time, according to the Oklahoma Medical Marijuana Authority.

Oklahoma collects a 4.5% tax on marijuana products. According to the Oklahoma Medical Marijuana Authority, this funding goes back to the state government and city or county where the product was purchased, helping fund general state and municipal services like streets, public safety and education.

Illinois

Illinois is the only state that borders Missouri where both medical and recreational marijuana is legal. Illinois legalized recreational marijuana in June 2019. The state’s program is managed by the Illinois Cannabis Regulation Oversight Officer.

Illinois’ legislation sets a state cap of 185 dispensaries and 30 cultivators. As of Thursday, 55 dispensaries are licensed to sell medical products and over 100 are licensed to sell recreational, according to the Illinois Cannabis Regulation Oversight Officer website.

Illinois residents are limited to 30 grams of flower (about 1.05 ounces) and five grams of THC concentrate at once. This is about one-third of Missouri’s possession limit, for reference. Out-of-state visitors are limited to 15 grams of flower and 2.5 grams of THC concentrate.

Illinois taxes on marijuana products vary. According to the Illinois Department of Revenue, marijuana products (excluding marijuana-infused products) with a THC level at or below 35% are taxed at a rate of 10%. Products (excluding infused products) with a THC level above 35% are taxed at a rate of 25%. All marijuana-infused products, including edibles, are taxed at a rate of 20%.

How does Missouri’s marijuana legislation compare?

Missouri voters approved the legalization of recreational marijuana in November 2022 and products hit the market in February. Missouri’s Department of Health and Senior Services oversees the state’s Division of Cannabis Regulation.

Missouri’s law does not set a cap on the number of allocated dispensary and cultivation licenses. However, DHSS determined in the early days of implementing the state’s medical marijuana program it would license the minimum required by the amendment, DHSS Communications Director Lisa Cox said. As of March 2, 2023, 195 dispensary licenses (both medical and comprehensive) have been approved by the DHSS.

In Missouri, the legal limit for marijuana possession is three ounces of dried, unprocessed marijuana.

Missouri levies a 6% sales tax on marijuana products and local entities are able to add up to an additional 3% tax within their borders. The state tax is distributed to DHSS, government entities responsible for expungement of criminal records, the Missouri Veterans Commission, agencies increasing access to drug addiction treatment and the Missouri public defender system. (Full Story)

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