How to Open a Dispensary in Missouri
Missouri is officially a recreational state. Adult-use cannabis sales opened in February to a banner response. While there are already over 200 adult-use dispensaries in Missouri, the “Show-Me” state borders eight other states, most of whom are prohibition states, so you can expect to see that number grow. Here’s what you need to know about opening a dispensary in Missouri.
Understanding Recreational Cannabis in Missouri
In November 2022, Missouri voters legalized recreational cannabis via a ballot measure. Adults over 21 can legally possess up to three ounces of marijuana at once and apply for a home grow permit. The state’s Department of Health and Senior Services (DHSS) oversees the cannabis program and regulations.
Missouri’s ballot initiative laid out the framework for an adult-use supply chain, giving the DHSS just three months to approve or deny the medical applicants who applied for the expanded license, making it one of the fastest transitions from medical to recreational we’ve seen.
Recreational sales started in February 2023, and the opening weekend came in with a bang, with more than $12 million of products sold! By the end of the month, that total had reached $71.73 million. Revenue from recreational sales is allocated in different ways. First, a portion covers governmental operating expenses for managing the marijuana industry. Second, another portion pays for all processes related to expunging medical records for nonviolent marijuana expenses. Finally, the remaining balance is split in three ways:
- One-third goes to the Missouri Veterans Commission and its allied state agencies.
- One-third is reserved for grants for nonprofits that provide low-barrier drug addiction treatment.
- One-third goes to the Missouri public defender system and is solely for legal assistance for low-income Missouri residents.
Recreational legalization also brought some changes to the medical marijuana program. Depending on doctor recommendations, medical patients can have up to six ounces of flower at once (or more) and replenish their supply every 30 days. Medical marijuana is also taxed at a lower rate of 4%, compared to a 6% tax for recreational products. Additionally, the application fee to become a patient or a caregiver was reduced to $50.
Why Start a Cannabis Business?
Opening a dispensary offers immense opportunities:
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High DemandWith the growing acceptance of medical and recreational cannabis across multiple states and countries, dispensaries are seeing a surge in demand. Consumers are increasingly looking for high-quality products for health, wellness, and leisure, creating a constant need for reliable, accessible dispensaries.
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Job Creation
The cannabis industry is projected to create thousands of jobs across various sectors, including cultivation, retail, logistics, and marketing. This growth not only provides employment opportunities but also contributes to local and national economies.
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Strong ROI Potential
Entrepreneurs who navigate the complex regulatory landscape can make big returns on their investments. With proper business planning, branding, and compliance, dispensaries can tap into a rapidly growing market with high-profit margins.
High Demand
Job Creation
Strong ROI Potential
Dispensaries in Missouri
Missouri took a two-pronged approach to dispensaries. First, existing medical dispensaries could covert their licenses to “comprehensive facilities,” meaning they can serve medical and recreational patients. At the time of legalization, the “Show-Me” state had 212 licensed medical dispensaries, 207 of which began selling adult-use products in February 2023.
The state also issues microbusiness licenses. Last June 2024, the Missouri Division of Cannabis Regulation (DCR) issued 57 marijuana microbusiness licenses to top applicants via a lottery. A minimum of six microbusiness licenses were awarded within each of the eight congressional districts, with each district receiving two microbusiness dispensary licenses and four microbusiness wholesale facility licenses.
At the current time, the DHSS is not accepting applications for cultivation, testing, manufacturing, and dispensary licenses. In addition to medical facility conversion to a comprehensive facility license, only applications for Seed-to-Sale, Transportation, and Warehouse certifications are accepted.
How to Open a Dispensary in Missouri
Missouri isn’t the easiest state to open a dispensary in. The state is near its self-imposed limit with the number of medical dispensaries that converted to adult use. This limitation drew frustration from legacy communities that felt they were being shut out of the market, but more are expected to come online in the coming years. Currently, there are only two options for obtaining an adult-use cannabis sales license in Missouri: converting an existing medical cannabis facility license to a comprehensive license, and applying for a microbusiness license.
Facility Conversion to Comprehensive License
Existing medical facilities that wish to expand to serve both medical and adult-use cannabis markets can request conversion to a comprehensive facility license. A conversion request will be granted unless the medical facility license is not in good standing with the department, meaning the license is not suspended or revoked at the time of the request.
Application Process
- The conversion request is completed through the submission of a business update application within the electronic registration system and selection of the statement “I would like to request to convert from a medical license to a comprehensive license.”
- The licensees must prove that the individual submitting the request is authorized to do so on behalf of the licensee.
- They must also upload the following documents:
- A plan to promote and encourage participation in the regulated marijuana industry by people from communities that have been disproportionately impacted by prohibition.
- A plan that explains how the licensee will serve both the medical and adult-use markets while maintaining adequate supply at a reasonable cost.
- The facilities must also pay a conversion fee payment of $2,000.
You can check out the DHSS website for the step-by-step process of submitting a conversion request.
Microbusiness Licenses
A microbusiness is a marijuana facility license that is only issued to eligible individuals and entities. These are essentially small businesses designed to allow marginalized or underrepresented individuals to participate in the legal marijuana market. A microbusiness wholesale facility grows and processes cannabis and can only sell product through microbusiness dispensaries.
Eligibility Criteria
Microbusinesses must be majority-owned by individuals who meet at least one of the following criteria:
- Have a net worth of at least $250,000 and have had an income below 250% of the federal poverty level, or a successor level.
- Have a valid service-connected disability card issued by the United States Department of Veterans Affairs, or a successor agency
- 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
- Reside in a ZIP code or census tract area where 30% or more of the population lives below the federal poverty level, the rate of unemployment is 50% higher than state average, or historic rate of incarceration is 50% higher than the state average.
- 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 (3) of the past five (5) years.
Additionally, the entity or individual may only apply for and obtain one microbusiness license. An owner of a microbusiness facility may not also be an owner of another licensed marijuana facility or medical facility.
The full details of the eligibility criteria can be found on the DHSS website.
Application Process
The application for a microbusiness license is done online. Eligible applicants must review the Microbusiness License Application form and instructions.
The DHSS also has an Application Checklist to assist applicants in gathering required documentation for submission of a Microbusiness License Application.
How AlphaRoot Can Help Dispensaries in Missouri
AlphaRoot provides our prospects and current clients vying for a Missouri dispensary license with a letter of commitment. This letter provides proof that you, as the business owner, have retained a cannabis insurance provider without taking on the financial commitment of paying for insurance before your dispensary opens.
A letter of commitment states, “AlphaRoot LLC and our carrier partners have engaged (Company) and discussed their insurance needs. In the event that (Company) is awarded the license with the city, we will work on (Company) behalf to obtain the necessary quotes and limits outlined by the city of (City) (State) as evidenced by a (Company) certification of insurance.”
The referenced insurance quotes also include lines of coverage for:
Working in the cannabis industry gives us a ground-floor view of how businesses can set themselves up for success. We know it doesn’t make sense to pay for cannabis insurance policies before knowing if you will be awarded a license. Still, having an insurance plan benefits you and shows the state that you understand what it takes to do business in the cannabis industry.
Take Your First Step Toward Success
Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help!
Reach out to us today by emailing [email protected] or calling 646-854-1093 for a customized letter of commitment or to learn more about your cannabis insurance options.
