When marijuana legalization was passed by Missouri voters one year ago, it represented the firsttime local governments could also receive specific cannabis taxes from local sales. Unfortunately, some county governments are trying to double stack these local taxes in a way forbidden by the Missouri Constitution, proving once again that the most dangerous place in Missouri is between a politician and a dollar bill.
Cannabis sales are big business in Missouri and are helping the economies of local communities across Missouri, like us in St. Charles County. Since medical marijuana passed in 2018, the state has taken in more than $100 million in tax and fees, with veterans’ health care being the largest beneficiary.
Under full marijuana legalization, which passed statewide last year by 127,000 votes, the state receives a 6% tax on all adult use cannabis sales, above and beyond the regular sales tax applied to any other product. The constitutional amendment then allows a local government to apply an additional sales tax of up to 3% if approved by a vote of the people. The constitution is crystal clear that marijuana sales taking place inside city limits can be taxed by that municipality, whereas sales taking place in unincorporated areas can be taxed by that county.
However, dozens of counties, led by St. Louis and St. Charles counties, are attempting to illegally stack their 3% tax on top of the local city tax. If allowed to happen, this will inevitably drive up the cost of cannabis and drive customers away from safe, compliant, legal marijuana sales, back to the illicit market. For example, a customer purchasing marijuana in St. Peters, would first have to pay the regular roughly 10% sales tax, plus the state’s 6% marijuana tax, plus the municipalities 3% tax, and finally the unconstitutional 3% county tax.
Taxing marijuana sales in Missouri nearly 25% will fuel the illicit market in Missouri faster than any other failed public policy. You don’t have to look much past California, Washington state, New York or Illinois to see how excessive marijuana taxes end up pushing customers to a cheaper, less safe illicit market, defeating the point of regulated marijuana legalization.
Since adult use marijuana sales began on Feb. 3, Missouri cannabis sales have boomed to the tune of more than $950 million. At the same time, new jobs in the cannabis industry are being created every day, with more than 18,000 Missourians now directly employed in the marijuana industry. And unlike other states where dispensaries are concentrated only in the largest cities, Missourians from every corner of the state have access to legal marijuana sales. That is, if we don’t mess it up with overly burdensome taxes.
The reason why Missouri has overperformed other states that have legalized marijuana is quite simple. Missouri’s customer-friendly, relatively low-tax marijuana program is converting a greater percentage of former customers that used to buy on the illicit market to the legal market. The three main reasons for this are convenient access for patients and customers; relatively low taxes; and a selection of tested, quality, well priced products that are safer than buying off the street.
The fact that our largest counties in the St. Louis metro area want to reverse this trend by double stacking local taxes is penny smart and pound foolish.
Since Oct. 1, customers across Missouri have begun paying these local taxes. Not surprisingly a lawsuit has already been filed on behalf of cannabis customers to hopefully put an end to these excessive taxes. The sooner Missouri courts step in and enforce the marijuana tax law just as the voters approved, the sooner we solidify our state’s conversion for untested, unregulated illicit sales to a growing, safe and convenient leader in legal marijuana sales. Failure to do so will only fuel more illicit sales and again set Missouri back.
State Representative District 105
