Smoke Show: MO’s weed tax bankrolls reefer representation resources
Art by Keegan Hudspeth
At a local dispensary, your $25 eighth (after taxes) rounds up to around $30. The extra couple of bucks here and there can be a minor irk, but in this very rare situation, you’re going to be impressed by where your tax dollars are going.
Due to the structure of the Missouri cannabis industry, tax revenue collected by the state goes directly toward expunging Missourians who have nonviolent marijuana criminal records, to help provide resources to Missouri State Public Defender System, to help provide resources for substance abuse programs, as well as to aid local veterans healthcare.
This past year, Missouri was projected to rake in $79 million in sales tax revenue. That number was absolutely blown out of the water, as the state has accumulated a total of $241 million as of late November—with $143.3 million going to the state government and $97.48 million going to local city and county governments.
According to ARP, there is a 8.38% average sales tax in the state; Of this 8.38%, the state gets 4.225%—1% toward Missouri education, 3% toward general revenue funding, and the last .225% toward Missouri Department of Natural Resources Soil Water Conservation Program. The 4.165% remaining from the 8.38% average goes to local governments.
As it currently stands, there is a statewide 6% recreational and 4% medicinal sales tax. The 4% taken from medical patients goes directly to the Missouri Veterans Commission which is on the forefront of distributing the funds to assist local veterans with healthcare costs.
“We saw lots of wait lists for veterans to get into the nursing homes, obviously paying healthcare providers, the nurses, everything there is expensive, and we, as a state, need to do better on that,” MoCannTrade spokesperson Jack Cardetti says.
This facet of funding for the Missouri Veterans Commission is crucial to keeping veteran facilities within the state afloat, according to Missouri Veterans Commission Executive Director Paul Kirchhoff.
“I think that’s part of the misconception, is that it’s not really necessarily additional funds,” he says. “These are funds that the state allocates to us to keep our existing operations going. We’ve tried to address things such as veterans homelessness and veteran suicide, but none of those operations or those additional things that we’re trying to do came from marijuana funding. That came from additional dedicated sources from the legislature.”
Kirchhoff says that the veterans lost general funding from the state a little over a decade ago, and have since relied on capital from casinos, the VA (Veteran Affairs), and the price they charge vets to reside in their homes.
“Not as many people go into the boats as what they used to. So that source has been decreasing significantly, particularly over the past 10 years. And so, probably over the past 10 years, we’ve been operating at a deficit,” he says.
He says that the cannabis tax revenue has not allowed for the commission to provide additional care and efforts toward veterans in Missouri, but the money is rather used to just keep their current operations running.
“Without this funding, or without additional funding we will have to find another measure, and one of those measures may be up to closing one of our homes,” Kirchhoff says. “Without the funding from the cannabis, we would have had to look to do that earlier than what we are now.”
After appropriations to the courts and the Department of Health and Senior Services (DHSS) for dispensary oversight, the 6% recreational sales tax is split up to four different entities; The Missouri Veterans Commission receives 2%, 2% goes toward substance abuse programs that are administered by the DHSS, and 2% is divided between expunging records of individuals convicted of nonviolent marijuana charges and the Missouri State Public Defender System.
“The awesome thing is, when you go in and you purchase adult-use marijuana in Missouri, part of what you’re paying for is to get that off of somebody’s criminal record,” Cardetti says.
As the first state to approve this structure by a vote of the people, there are a few aspects that differ between this specific facet of tax revenue in comparison to other legal states. Other states’ cannabis programs have similar makeups in terms of allotting tax revenue to help expunge these criminal records, but the major difference between the Show-Me State and others is that locals here do not have to do a single thing to get their record wiped, while petition-driven structures are seen among many states where marijuana is legal.
“Historically, only one, two, three percent of people that were eligible to have those records expunged ever actually petition the court because the people that need these records expunged the most have the least access to attorneys and the court,” Cardetti says.
The expungement process is far from automatic for county courthouses. Each county in the state is responsible for expunging the nonviolent criminal records in their respective counties. Considering most cases before the early 2000s and ’90s were only recorded on paper, there is a strenuous process that those at each county courthouse must work through to find individuals whose cases are eligible for expungement. It has led to many counties searching through excess records that they have deemed noneligible. The metros surrounding counties have had varying experiences when searching for eligible cases.
According to the Missouri Supreme Court’s data, as of Dec. 13, 2024, Jackson County has reviewed 15,717 cases and expunged 2,951. Clay County has reviewed 2,281 and expunged 1,876. Cass County has reviewed 2,575 and expunged 839. Platte County has reviewed 791 and expunged 784.
According to MoCann, over 130,000 Missourians have had their records expunged due to the state’s cannabis structure since the first recreational marijuana sale in February 2023. Obviously, this is great for locals to get back to an even playing field in terms of permanent records, but there were early concerns that MoCann and the state considered when constructing the program: Eventually, there won’t be any records left to expunge.
Once all nonviolent marijuana criminal records disappear, the full 2% of funds will be funneled to the Missouri State Public Defender System.
“It’s sort of a well-known problem that Republicans and Democrats agree on—If we’re going to have a really healthy justice system here, we’ve got to make sure that law enforcement has resources to do their job, we’ve got to make sure that prosecuting attorneys offices have the resources to their job, but we also need to make sure that the public defender system that defends those that don’t have the resources to defend themselves in court is also funded. And it has been underfunded forever,” Cardetti says.
Since the passing of legal recreational cannabis in the state, the Missouri State Public Defender System has received a little over $15 million. Those funds have gone into hiring contract counsel in locations with overloaded cases and for litigation expenses, such as travel costs, expert witnesses, deposition costs, and more.
“A big thing, I think, that it allows us to do is to be able to contract out some of our cases, so that in the jurisdictions where we’re having trouble hiring staff, we can get representation into the courts quickly,” Missouri State Public Defender System Director Mary Fox says.
Fox says that this new avenue of funding has allowed the system to execute their duties in a more timely fashion, while also maintaining upward mobility for current and future staff, which may not have been the case without the millions of dollars.
“That helped to get us through the year without having to do a hiring freeze, or a promotion freeze, or anything like that,” Fox says.
Fox says that the system is hopeful that they will be able to allocate next year’s funds toward their Holistic Defense Program, which helps keep prosecuted individuals out of a reoccurring criminal cycle by providing them with individuals who can help set them on the right path.
“They’re social work-type folks who will assist our clients in connecting them to services in the community, with the hope by making that connection, we will help them remove themselves from the criminal system,” Fox says. “What we see is clients come in, and then we represent them again and again over the years, and a lot of times it’s because the underlying issue that has brought them in touch with the system has not been addressed. And that underlying issue—part of it is poverty, part of it is substance use disorder, part of it is mental health disorder. So, by connecting them with the services that they need in the community, we’re hoping to divert them from the court and the criminal system.”
She thinks that this funnel of dollars to the Missouri State Public Defender System is one way to ensure that there is a well-balanced judicial system within the state.
“It is a good use of the tax dollars,” Fox says. “You think, in terms of Missouri and the public defender system over the years, it’s been well-known that we have been underfunded. So, this was a very creative way for Missouri and taxpayers of Missouri to fund part of the needs of the public defender system. If you don’t have a well-funded public defender system, then you have a court system that gets backed up. You don’t think about what the impact of that is, but the impact is not only on our clients, but also on the victims of crime who don’t get their day in court for extended period of time.”
On top of the previously listed tolls that put medicinal patients at 12.83% total tax and recreational patients at 14.83% total tax, there is an additional 3% sales tax to municipalities and 3% sales tax to counties where the product is sold. But that won’t last for long.
Ever since October of last year, a 3% sales tax implemented by municipalities took effect. Where cities weren’t taking the 3%, counties were granted to implement the tax. In turn, the effects have led to counties double-stacking this tax in areas where cities have already been implementing the draw, resulting in a total of 6% being taken out of consumers’ pockets.
The Missouri Court of Appeals declared that the double-stacking taxes were unconstitutional, stating that only the city or county could apply a 3% sales tax. Now, St. Charles County is taking the appeal to the Missouri Supreme Court for further consideration. Cannabis consumers in the state should expect the issue to possibly be resolved within the next few months.
Out of the $241 million tax revenue generated this past year, it does not take into account the additional 3% that has burned holes in Missourians’ pockets for several months.
“The programs generate even more money than we say, but we don’t put that in there because we don’t believe that’s constitutional,” Cardetti says.
In fact, according to MoCann, a total of $3 million will be saved each month at dispensary counters due to the termination of the double-stacking taxes.
“What we hope to happen once all of the legal cases are through, which we’re getting closer to, is, then the department of revenue will send out a new, what they call a rate card, to dispensaries, saying this is how much you should be charged right now, and that’s ultimately when customers all throughout Missouri will start to see $3 million more back into their pockets every month,” Cardetti says.
Cardetti and MoCannTrade Executive Director Andrew Mullins believe that eliminating this extra tax burden ultimately incentivizes consumers to purchase their marijuana from licensed facilities.
“The last thing we want, as an industry and as a state, is to see anything that would have a negative impact on folks buying cannabis from licensed facilities, where the cannabis that they buy is safe, tested, and goes through all those rigors versus buying it through alternative or illicit sources,” Mullins says.
