Missouri's Cannabis Program's Success: The 5 Keys To Follow

As the cannabis industry continues to expand across the United States, Missouri has emerged as a beacon of successful state-level regulation. Despite cannabis still being illegal on the federal level, Missouri has implemented a medical cannabis program that has been incredibly successful in its early stages. The program's success can be attributed to its focus on five key components: equitable distribution, fair competition, low taxes, regulatory enforcement and collaboration, and strategic location. Let's take a closer look at each of these components and how they have contributed to the success of Missouri's cannabis program.

Equitable Distribution

Missouri's focus on equitable distribution of licenses has been a critical aspect of its success. The state government made it a priority to ensure that all congressional districts had at least 24 dispensaries. In turn, nearly all residents are within a 30-minute drive of a dispensary. By prioritizing patient access, the state has built a strong foundation for a thriving cannabis industry. Customers can easily access both medical and recreational  cannabis, which has increased participation and investment in the industry. This emphasis on customer access has set Missouri's cannabis program apart from other states, where limited access has hindered the success of the industry. 

Fair Competition

Missouri has fostered fair competition within the cannabis industry by putting forth anti-monopoly regulations to ensure that no single entity can control more than 10% of licenses in a given license type. This approach has been instrumental in promoting diversity and innovation within the industry, which has led to better products and services for consumers. Missouri has issued over 200 dispensary, 60 cultivation, and 86 manufacturing licenses. The state has also issued flowering canopy limits to 30,000 square feet per license to ensure a balanced market and not to create an oversupply which is the kryptonite of most cannabis programs.

Low Taxes

Missouri's 6% tax rate for cannabis is the lowest in the country, with local municipalities allowed to add an additional 3%. By keeping taxes low, Missouri's cannabis industry has remained competitive and has attracted a large customer base, discouraging the black market. This has resulted in a thriving legal cannabis industry that benefits both the state and its residents. Lower taxes also make it easier for small businesses to enter the industry and compete with larger entities.

Regulatory Enforcement And Collaboration 

Missouri has established regulations and testing requirements to ensure that products are free of any harmful chemicals or molds that may be present. In addition regulators work closely with both licensees individually and via its trade association, MoCann Trade, to resolve issues and ensure that the public has access to safe, tested cannabis. Trade associations are an imperative in providing a clear line of communication to regulators and legislators alike. This focus on regulation and safety  through collaboration has helped to build trust and confidence in the legal cannabis industry in Missouri. Trust is a key factor that drives customer loyalty, and Missouri has been successful in establishing this trust by prioritizing regulatory enforcement.

Geographical Location

Missouri's strategic location has been a key asset for the state's cannabis program. The state borders eight other states and is in the center of the country, providing an ideal position to transport products efficiently across the country once federal legalization occurs. There are over 36 million people 21 and up living between Missouri and its border states providing the industry with significant upside and an advantage over other states in the cannabis industry.

An Evolving Program

Missouri's cannabis program has become a shining example of successful state-level regulation in the United States. By prioritizing patient access, fostering fair competition, keeping taxes low, ensuring sensible regulatory enforcement, and capitalizing on its strategic location, Missouri has created a strong foundation for a thriving cannabis industry. The success of Missouri's program provides a roadmap for other states to follow as the cannabis industry continues to grow and expand across the country. These key components are essential to establishing a thriving cannabis industry that benefits both the state and its residents.

Nick Rinella, CEO of Hippos and former COO of Verdant Distribution in Los Angeles, CA , is an expert in both alcoholic beverage and cannabis product development, distribution and regulation. Rinella’s expertise stems from being a 5th generation beverage distributor spending nearly a decade as the Vice President of Rinella Company, Inc, an independent beverage distributor with notable suppliers like Anheuser-Busch, Dr. Pepper Snapple Group, Nestle USA, Bronco Wine Company, Sazerac Company and more. Nick Rinella joined Hippos in 2019 shortly after it was founded. Mr. Rinella actively served on Missouri’s Amendment 3 Drafting Committee as well as the MoCannTrade Cultivation Subcommittee and is the reason that Missouri has the lowest cannabis tax at 6%. During his time in Missouri, he along with his team has secured licenses, built out brands, and run the country’s most efficient dispensary design.