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  • Writer's pictureTanya Griffin

Why Missouri is the latest coveted state to hold Cannabis licenses

Updated: Apr 20, 2023

Missouri recently became the 17th state in the U.S. to legalize adult-use cannabis sales. While Missouri mandated a competitive excise tax favorable to both consumers and merchants the Comprehensive vs. Microbusiness License regulatory structure looks like it was custom designed by existing “Comprehensive” license holders to maintain market share and prohibits sales between the two licensing structures.

Image of the St. Louiis riverfront including the St. Louis Arch in the evening taken from East Saint Louis, IL/
St. Louis, MO riverfront in the evening. MO applications open June 6th.

Herein lies the challenge of ballot referendums where voters cannot possibly grasp the nuances of what they are voting for, especially when the regulations are stacked so clearly to the advantage of existing license holders. While the reasonable excise tax makes Missouri a particularly attractive State, the separation of license structures will take some smart navigating to remain competitive and profitable.

Starting off with a boom

The Missouri cannabis market’s strong start with adult-use sales, like most transitioning markets, struggled to keep up with sustainable supply across the entire first quarter of 2023. As the micro-licenses emerge we will not see an integrated marketplace but instead, a segregated environment where licenses are by no means created equally.

While Missouri’s population may not be bursting at the seams like Illinois, New York, or New Jersey; they do have St. Louis, Kansas City, and Branson coupled with a decisive advantage relative to a competitive excise tax relative to neighboring states. The question will be whether or not Missouri can remain competitive given the one-sided and limited licensing.

Missouri Department of Health - Data - Facilities Graph published March of 2023. Graph shows sales in March of 2023 growing to a total of $871.4 Million.
Missouri Department of Health - Data - Facilities Graph published March of 2023.

Coming in at a 6% cannabis excise tax, Missouri has a significant advantage over its neighbor Illinois whose excise tax ranges from 10-25% based on the type of product or THC percentage. While both states allow municipalities to add up to 3% local taxes on top, the real difference between neighboring states and tourists is Missouri’s fair and competitive excise tax. Until Illinois chooses to compete on tax we can expect customers to travel to Missouri for cannabis just as they have for decades for gas, cigarettes, and beer.

Interested in applying for cannabis licenses in Missouri? Here’s what’s available.

Missouri Amendment 3, passed in November, 2022 and created a segregated path for both Comprehensive and Microbusiness cannabis licenses. We will discuss how these licenses interact with a particular focus on applying for the upcoming Microbusiness lottery and the strategy required to win and operate alongside existing Comprehensive licenses.

At this time, a Comprehensive “adult use” license can only be obtained by converting an existing Missouri Medical Cannabis license to a Comprehensive. While there is no cap on Comprehensive licenses, regulators have chosen to maintain a minimum number allowed under the constitution, which is tied to the census. Any announcement of new licenses being available will be posted at least 6 months prior to the application date, and they have announced they can not begin issuing more licenses prior to August 7th, 2024.

Water + Trees Inc. is an excellent resource for cannabis business opportunities. If you are interested in purchasing a Medical/Comprehensive license in Missouri, we can help.

Microbusiness Licenses

Amendment 3 segregates Comprehensive and Microbusiness licenses creating two distinctive lanes for cannabis operations. Microbusinesses have two types, retail and cultivation centers. Each license is a single entity owned and cannot be vertically integrated. Microbusinesses can only purchase from fellow microbusiness licenses and cannot access Comprehensive licenses supply chains just as Comprehensive licenses cannot access micro license supply chains. Creating separate but parallel paths that segregate Micro and Comprehensive licenses create challenges that will require Microbusinesses to incorporate creative operating and high-tech solutions when competing with an established, yet parallel cannabis marketplace.

Adult use customers shop at a cannabis dispensary during the Covid 19 pandemic.
A Cannabis dispensary operating during the COVID Pandemic

Similar to Comprehensive licenses, microbusiness licenses are valid for 3 years and are renewable, as long as the business remains in good standing. The Microbusiness application is $1500 with an additional $1500 annual fee (excluding the first year of licensure). Applicants that do not win a micro-license lottery will be refunded their application fee, offering zero risk to apply. An applicant may only own one microbusiness cannabis license at any time and comprehensive license holders may not own a microbusiness.

Microbusiness licenses will open for application as early as June 6, 2023.

Microbusiness Wholesale Facility

A Microbusiness wholesale facility is what many consider a “cultivation center” and are authorized to acquire, cultivate, process, package, store on-site or off-site, manufacture, transport to or from, deliver, and sell cannabis to other micro business or testing facilities. Micro Licenses cannot be vertically integrated and unlike Comprehensive licenses will not be able to control their own supply chain. Micro licenses are also capped to cultivate only up to 250 flowering plants at any given time while Comprehensive licenses are restricted to single entity owners who are not allowed to control more than 10% market share within the Comprehensive lane.

Microbusiness Dispensary Facility

A Micro Business Dispensary facility is an adult-use retail center. They may acquire, process, package, store on-site or off-site, sell, transport to or from, and deliver adult-use cannabis to those over 21 years of age. Cannabis products may only be obtained from other Missouri Microbusiness wholesale facilities. Deli-style flower and pre-rolls are allowed to be dispensed and made by the micro-dispensary.

How many Micro licenses will be available?

Each lottery round, the State must issue at least 2 Dispensaries and 4 Wholesale licenses per each of the 8 Missouri Congressional Districts. While there is not a cap on the number of licenses, Missouri stayed within the minimum licenses allowed relative to Comprehensive licenses.

How do I win a Missouri Microbusiness license?

When can you apply for a Missouri Cannabis microbusiness license?

Application forms for micro business licenses will be available June 6th, 2023. The State will begin accepting applications by September 4th, 2023 with a submission deadline of October 4th, 2023. The State has stated that these applications will be reviewed for eligibility on December 3rd, 2023, but has not set a date for the lottery.

When will micro business licenses be awarded?

The first lottery round must be completed and licenses issued by October 3, 2024. There is not a cap on the number of licenses at each lottery round, but the Department must determine that all licenses from the previous round are operating in good standing before completing the second lottery. The DOH has already announced they will begin accepting applications for the second round on June 30, 2024.

Missouri Department of Health - Adult Use Cannabis timeline
Missouri Department of Health - Adult Use timeline

Do I qualify for the Micro Business license lottery?

The entity applying for the license must be majority (51%) owned by an individual or individuals who:

(a) Have a net worth of less than $250,000 and have had an income below two hundred and fifty percent of the federal poverty level, or successor level, as set forth in the applicable calendar year's federal poverty income guidelines published by the U.S. Department of Health and Human Services or its successor agency, for at least three of the ten calendar years prior to applying for a marijuana microbusiness facility license; or

  (b) Have a valid service-connected disability card issued by the United States Department of Veterans Affairs, or successor agency; or

  (c) Be a person who has been, or a person whose parent, guardian or spouse has been arrested for, prosecuted for, or convicted of a non-violent marijuana offense, except for a conviction involving possession of marijuana to a minor, or a conviction of driving under the influence of marijuana. The arrest, charge, or conviction must have occurred at least one year prior to the effective date of this section; or

  (d) Reside in a ZIP code or census track area where:

  a. Thirty percent or more of the population lives below the federal poverty level; or

  b. The rate of unemployment is fifty percent higher than the state average rate of unemployment; or

  c. The historic rate of incarceration for marijuana-related offenses is fifty percent higher than the rate for the entire state; or

  (e) Graduated from a school district that was unaccredited, or had a similar successor designation, at the time of graduation, or has lived in a zip code containing an unaccredited school district, or similar successor designation, for three of the past five years.

Still interested in applying for Micro-licenses?

Navigating separate and unequal lanes to operate and distribute adult use cannabis will take some creative strategizing to compete against existing Comprehensive licenses.

Securing a micro-license will however get your foot in the door in a State that has made some good decisions around cannabis excise tax and regulations that have met and beat expectations relative to timelines and supporting fluid operations. As the Country inches its way toward legalization and the elimination of daunting 280E tax liabilities winning a microbusiness cannabis license will be a good stepping stone to entering this progressively saturated industry.

Although the State has not indicated that a micro-license can be converted to a Comprehensive license this path would make sense given president set in other legalized States as well as the understanding that Comprehensive licensing requires cannabis experience and micro-licenses is a sure path to establish.

Any announcement of new licenses being available will be posted at least 6 months prior to the application date, and new Comprehensive licensees and the State announced they will not begin issuing more licenses before August 7th, 2024.

Water + Trees

Water + Trees Inc logo

If you meet the minimum requirements and are still interested in applying for a wholesale or retail micro license there is a path forward. Operating in the cannabis space is expensive and requires significant capital to secure licensing, and build and operate a successful business.

If you are a social equity lead group and serious about moving forward, our team at Water + Trees will be happy to schedule a consultation to walk you through next steps and strategies how best to build and operate a successful, parallel micro-license in this new Missouri cannabis market.

Fill out our contact form below or email Andrew (

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