Adult-Use Marijuana In Missouri: Municipal Considerations For Facilities, Personnel And Taxation

This past November, voters in Missouri – for the second time in four years – approved an amendment to the Missouri Constitution drastically changing how Missouri cities may regulate and consider marijuana. In November of 2018, Missouri voters initially approved the legal use of medical marijuana in Amendment 2, that added Article XIV, Section 1, to the Missouri Constitution. Amendment 3 has taken Article XIV a step further by legalizing recreational adult use of marijuana, as well as making modifications to the medical provisions.

More specifically, Article XIV, Section 2, of the Missouri Constitution, generally legalizes the possession and consumption of marijuana for people 21 years of age and older and establishes a framework for the regulation of businesses involved in the production, transportation and sale of adult-use marijuana. Additionally, Amendment 3 revised certain provisions of Article XIV, Section 1, of the Missouri Constitution affecting how Missouri cities regulate medical marijuana facilities and handle employees who are qualified patients permitted to use medical marijuana. Amendment 3, continuing the regulatory scheme implemented by Amendment 2 – places the Missouri Department of Health and Senior Services (DHSS) as the statewide regulatory body responsible for adultuse marijuana.

Both the enactment of Article XIV, Section 2, and the revisions to Article XIV, Section 1, will have long-lasting effects on Missouri cities. This article will provide a general overview of the new facilities authorized by Amendment 3 and discuss issues for Missouri cities brought about by Amendment 3. Specifically, this article will discuss (1) municipal regulation of adultuse marijuana both from a personal use perspective and regarding the newly created marijuana facilities; (2) personnel issues in both the medical and adult-use marijuana context; and (3) the taxation of adult-use marijuana.

Marijuana Facilities

A key portion of Amendment 3 is the creation and addition of two classes of marijuana facilities. Amendment 3 classifies the first group of marijuana facilites as comprehensive facilities. The second class is micro-businesses whose ownership is restricted to people meeting one of the enumerated qualifications for ownership. Comprehensive facilites and micro-businesses are each authorized to operate in both the medical and adultuse marijuana industries.

Comprehensive Marijuana Facilities

Amendment 3 authorizes three different types of comprehensive facilities: (1) comprehensive marijuana cultivation facilities, (2) comprehensive marijuana dispensary facilities, and (3) comprehensive marijuana-infused products manufacturing facilities. As with the medical facilities authorized by Article XIV, Section 1, the title given to each classification of comprehensive facilities explains the role each type of facility plays in the marijuana marketplace. Comprehensive marijuana cultivation facilities cultivate marijuana, comprehensive marijuana dispensary facilities dispense or sell marijuana, and comprehensive marijuana-infused products manufacturing facilities manufacture products infused with marijuana. DHSS is authorized to issue, at a minimum, the same number of licensees for each classification of comprehensive facilities as it was for their medical marijuana counterpart.

A key portion of Amendment 3 is the creation and addition of two classes of marijuana facilities. Amendment 3 classifies the first group of marijuana facilities as comprehensive facilities. The second class is micro-businesses whose ownership is restricted to people meeting one of the enumerated qualifications for ownership.

While Amendment 3 authorizes the new comprehensive facilities and establishes a timeline for the issuance of new comprehensive facility licenses, it also provides that existing medical marijuana facilities – referred to as medical facilities in Amendment 3 – may convert their existing license with DHSS to a comprehensive license. Many medical marijuana facilities have already done so, but to convert the existing medical marijuana license to a comprehensive license, the proposed comprehensive facility must be in good standing with DHSS. It must also be either (1) at the same location as the existing medical marijuana facility or (2) if located in a jurisdiction that has prohibited nonmedical marijuana facilities, the new proposed comprehensive facility must be in the same congressional district as long as the new location meets all the requirements of the constitutional provisions and DHSS regulations. Once a medical marijuana facility applies to convert its license, DHSS has 60 days to act on a conversion request once received, or else the conversion request is deemed approved.

Marijuana Microbusiness Facilities

In addition to the creation of comprehensive marijuana facilities, Amendment 3 creates a separate classification of licenses titled marijuana microbusiness facilities. Marijuana microbusiness facilities may either be microbusiness dispensary facilities or microbusiness wholesale facilities. Microbusiness dispensary facilities are similar to comprehensive marijuana dispensary facilities in that they are authorized to sell marijuana in both the medical and adult-use marketplace; however, based on the plain language of Amendment 3, it does not appear that microbusinesses may interact with medical facilities or comprehensive facilities. Microbusiness wholesale facilities are essentially a combination of a cultivation facility and an infused products manufacturing facility. This means microbusiness wholesale facilities may cultivate marijuana and manufacture marijuana-infused products.

DHSS is authorized to issue 18 total marijuana microbusiness facility licenses per each United States congressional district. Amendment 3 contemplates that DHSS will issue 18 total marijuana microbusiness facility licenses in groups of six with at least four of the six licenses being for microbusiness wholesale facilities.

The key distinction between comprehensive marijuana facilities and marijuana microbusiness facilities is the restrictions on ownership of marijuana microbusiness facilities and the costs to secure and renew the license. Amendment 3 explicitly restricts ownership of marijuana microbusiness facilities to individuals meeting at least one of Amendment 3’s enumerated qualifications. Specifically, individuals seeking to receive a license to own and operate a marijuana microbusiness facility must:

1. have a net worth of less than $250,000 and have an income below 250% of the federal poverty level for three of the 10 calendar years prior to applying for a marijuana microbusiness facility license.

2. have a service-connected disability card issued by the United States Department of Veterans Affairs.

3. have been or have had a parent, guardian, or spouse that has been arrested for, prosecuted for, or convicted of a non-violent marijuana offense – excluding offenses relating to providing marijuana to minors or driving under the influence of marijuana – at least one year prior to the effective date of Amendment 3.

4. reside in certain distressed census tracts as defined by Amendment 3; or

5. have graduated from or live in a zip code containing an unaccredited school district for three of the past five years.

Municipal Regulation Of AdultUse Marijuana

Amendment 3 does articulate many protections for the adult-use of marijuana and does state it is intended to prevent arrest and penalty for personal possession and cultivation of certain amounts of marijuana by adults. However, these protections are not universal – the Amendment specifically states that it “is not intended to allow for the public use of marijuana, driving while under the influence of marijuana, the use of marijuana in the workplace or the use of marijuana by persons under 21.”