Last week Missouri legalized recreational cannabis and become the first state in the nation where voters approved a program for the automatic expungement of prior marijuana convictions. With the legalization bill, which won by a comfortable margin, the is state expanding its current medical marijuana program by allowing existing licensees to serve both medical and non-medical consumers.
While legalization is a milestone in itself, benefiting existing marijuana operators will no doubt impact the state’s economy and create a pathway for publicly traded cannabis companies.
Under Missouri’s current regulations, MMJ facilities cannot be owned, in whole or in part, by an individual with a disqualifying felony offense. This includes all shareholders of a company, no matter how small a part of a facility they would own.
Private cannabis companies based in Missouri include Grön, the woman-led producer of handcrafted cannabis-infused edibles; Treez a commerce tech platform that monitors the industry's retail and supply chain and the vertically-integrated, multi-state operator (MSO) Greenlight. To learn more about what cannabis reform means for existing and future companies and for Missouri in general, Benzinga reached out to all three.
Cannabis Legalization Is Normalizing
“We are excited to start expanding our production and supply to meet the demands of the adult-use market,” Draper Bender president of Grön told Benzinga. “Right now we are currently only offering our Sugar Coated Pearls and our MEGAs but with recent events, we plan on bringing all of our current product offerings as we expand into larger production. With legalization comes new employment and collaboration opportunities, and we look forward to creating more jobs and empowering our community.”
For John Yang, CEO and co-founder of Treez, Missouri’s reform “signifies that cannabis legalization is normalizing.” Furthermore, “The expansion of retail licenses brings forth opportunities for technology companies like Treez to expand our footprint and help retailers boost sales through the power of technology. In addition, there’s a huge opportunity for operators to invest early into the limited medical market as those operators will reap the most benefits as the state transitions into recreational use.”
John Mueller, a Missouri native and CEO of Greenlight, which is one of the largest operators in the state, said he believes Missouri will become an $800 million to $1 billion marketplace. “Greenlight plans to double its staff, add 50% more employees, and anticipate 2.5X their current medical revenue,” he said. “Due to current medical regulations publicly traded companies are not allowed to operate in the state. With the passage of Amendment 3, it opens the doors for publicly traded multi-state operators to attack the likely billion dollar market.”
Missouri Should Look At Michigan & Massachusetts
Yang says states like Massachusetts and Michigan provide great examples of successful recreational marijuana markets, mostly because they staggered the openings of retail licenses to avoid price squeezing and oversupply issues, which happened in other states like Oklahoma for example.
“We hope to see the state’s government provide the right incentives and tax benefits for retailers, so they have the best chance at combating the illicit market,” Yang said, adding that it's also important to reward licenses to social equity applicants first.
Grön’s president is impressed with Missouri's medical marijuana program and says the company enjoyed working with its regulatory body. “With any state, we believe that the right approach is for the regulators who are setting the adult-use program rules in place is for them to work closely with the current operators that are on the ground and are dealing with the day-to-day challenges of running the business and working with them to ensure a program that provides successful access to products for the new adult-use consumer and to not lose sight of the existing medical patients and ensuring they still have adequate access to products that help ease their debilitating conditions,” Bender said.
All three operators seem to agree that Missouri's first adult-use cannabis products can be expected on the shelves at the end of the first quarter or the beginning of the second quarter of 2023.
Cannabis Is Non-Controversial & Non-Political
Following the midterms, there are now 21 states with legal adult-use cannabis, which further testifies to the growing support the plant enjoys across the U.S. According to a Gallup poll from November 2022, as many as 68% of U.S. adults support cannabis legalization, but is this enough for it to happen?
Yang agrees that state-by-state legalization is important as federal reform slowly progresses, but seems confident that SAFE Banking Act could happen in 2023 “as mainstream private companies begin to take a closer look at the industry and the huge opportunities within. Ultimately, we believe it is up to private companies to influence and apply pressure on Congress to act on the legislation.”
Bender also has higher hopes for the SAFE Act passing more quickly, whereas, he thinks federal reform could be at least three to five years down the road.
Mueller adds that any additional legalization puts pressure on the government to end marijuana prohibition. “In Missouri, a heavily red state, it should send a clear message to all Republican politicians that cannabis is non-controversial and non-political.”
Photo: Courtesy of Louis Hansel on Unsplash
