Heading into the second year of legal recreational cannabis in Missouri, people in the industry are anticipating continued sales momentum and challenges surrounding an ongoing social equity program.
2023 has been a big year for Missouri鈥檚 marijuana industry. After in November 2022, dispensaries licensed to sell medical products began selling to anyone over the age of 21 in February 2023. The state also rolled out the first round of a new social equity license program, which .
The volume of sales propelled Missouri into one of the top cannabis states. The industry hit halfway through the year. Total sales are now approaching $2 billion.
The volume was surprising to Chase Cookson, a professor and researcher at Saint Louis University鈥檚 Cannabis Science and Operations Program. He was not expecting the current volume of sales until 2025. He anticipates 2024 to bring the same amount of sales, and possibly more.
Overall sales have dipped slightly in recent months. Sales in November totalled $112.7 million, a fall from the peak of $126.2 million in March.
The decline is led by a decline in medical sales, a trend that鈥檚 typical when a state fully legalizes marijuana and one that Cookson anticipates will continue.
Part of the decline is also due to falling prices as product supply catches up to new consumer demand, said Ben Burstein, a strategist at LeafLink. The New York-based wholesale platform connects dispensaries with marijuana product brands.
Growers expanded operations when recreational marijuana became legal, gearing up for the new pool of customers. But, it takes about six months from planting for the product to be ready for dispensary shelves, Burstein said.
Burstein expects that cannabis prices will continue to fall in the coming months, both for the dispensaries purchasing wholesale, and in turn, customers purchasing products.
鈥淚 think you won't get like this huge decrease in prices or anything, but like you're going to consistently have a normalization in bulk and branded product prices consistent with other markets that have had time to bring on enough supply for the market,鈥� Burstein said
With the strong sales and limited number of licenses, Cookson and Burstein expect continued consolidation in the market in 2024. One recent large deal was in the St. Louis area.
鈥淧eople can sell stores for like $10 to $20 million at this point,鈥� Burstein said. 鈥淎nd they're doing it.鈥�
Looking toward potential opportunities
Perhaps the largest focus of 2024 will be the state鈥檚 new marijuana program aimed to give micro-licenses to operators from underrepresented groups who meet certain eligibility requirements. The state awarded the first 48 licenses in October, and a second round of the program is slated for 2024.
The first round raised some concerns, including eligibility questions and a . During its review of applications, the state initially awarded.
New license holders will likely face challenges raising funding and navigating a heavily regulated industry.
Cookson, who applied to the first round, compares his feelings toward the state鈥檚 microbusiness program to : He has unwavering hope, but continues to confront the facts of the current reality.
鈥淭hat's kind of what I'm doing right now, which is confronting the brutal facts of, like, I'm worried about our microbusiness program. I'm worried about, you know, the next round. 鈥� I'm hopeful, but I'm sad,鈥� he said.
Abrahama Keys plans to apply for a license in the second round. She is the executive director of the Greater St. Louis branch of cannabis advocacy group NORML and owner of cannabis event business We Cann.
For now, the microbusiness program is the only way that people can receive a license in the state. But Keys is curious what other opportunities lie beyond the micro-program.
鈥淚 would like to see what the changes are after we've made it through microbusiness licensing,鈥� Keys said. 鈥淭he amendment does leave space for there to be more comprehensive licenses, for there to be other adjustments. So I definitely like to see how things pan out.鈥�
In the short term, some new opportunities may emerge through different kinds of marijuana permits, and open-air events, Keys said. These local-level decisions could open new doors for people otherwise unable to enter the industry, she said.
As Missouri enters its second year of a fully legal industry, state regulators and other leaders are learning how to navigate challenges, Cookson said. The Division of Cannabis Regulation 鈥渋s maturing,鈥� he said, and getting more serious about regulations and compliance.
At the end of the day, the state鈥檚 industry remains young, Keys said.
鈥淚 think we just have to always realize that the cannabis industry is still really new. It's a new emerging industry. And so you really don't see what the trends are. But it's also helpful because you can help set the trends,鈥� Keys said. 鈥淚 think that that's kind of the gift and the curse of where we are in the industry right now.鈥�
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