Potential for City/State Revenue as Recreational Marijuana Sales Soar

Last Updated on February 12, 2023 by S Jason Cole

Stock image of an indoor cannabis farm.

On November 8, 2022, voters in Missouri approved a ballot initiative legalizing the recreational use of marijuana by a 53-47 margin. Subsequently, adults aged 21 and above were legally allowed to possess marijuana on December 8, 2022, while the first licensed sales took place on February 3, 2023. The move comes as a growing number of states are loosening restrictions on the use of cannabis, and it is expected to have significant implications for both the local economy and residents’ daily lives.

Owners of Excelsior Springs’ local marijuana dispensary, Kansas City Cannabis, had anticipated the start of sales for recreational purposes to begin on February 6. However, licensees throughout Missouri received an email on February 2 stating that sales could begin as soon as their license was approved. Since KC Cannabis had already applied for and received approval they were able to begin sales that same day. They received the email at around 6:30 a.m. that morning and promptly notified staff and customers via social media. Despite having to quickly adjust their plans, the store’s newly hired staff performed well on the unexpectedly busy first day of sales.

KC Cannabis said they have experienced significant increases in traffic since beginning recreational sales, with approximately three times the amount of patients and consumers than before. The first weekend of sales was particularly busy, with lines forming outside the store. The store saw a large influx on Friday, the third, and remained steady throughout the weekend.

According to some estimates, recreational marijuana sales in Missouri could reach $550 million in the first year and potentially increase to $800 million-$900 million in four years which would mean an additional $33-$48 Million in revenue for Missouri. According to Greenway magazine, the first weekend of recreational sales brought in over $12 million. While this total includes both recreational and medical sales, the recreational sales alone were double the amount generated by Illinois on its first weekend of recreational sales in 2020, signaling a potential financial success.

On Monday, Feb. 6, the Excelsior Springs City Council approved a proposal to place a measure on the April 4 ballot, allowing voters to decide whether to impose a local 3% sales tax on recreational marijuana sales. The tax would be in addition to the 6% tax levied by the state of Missouri. It’s estimated that the proposed 3% local sales tax could generate around $150,000 for the city of Excelsior Springs. 

Excelsior Springs is one of several municipalities in the Kansas City area considering the optional municipal tax, but it has distinguished itself by identifying how the additional income will be used. The tax revenues generated from recreational marijuana would be allocated to public safety and youth drug prevention efforts, according to the proposed ballot language. The co-founder of Kansas City Cannabis Corey Martin said he supports the additional tax and he was happy Excelsior Springs has chosen such a worthy cause for the additional revenue. “That’s great, those are exactly the kind of programs we want to support,” he said. “we appreciate that the tax will go back to the local community where it can do the most good.”

Kansas City Cannabis Company also recently announced that they had been recognized as one of the Best Cannabis Companies to Work For in the 2023 awards program, presented by Cannabis Business Times and the Best Companies Group (BCG). The awards program acknowledges companies within the cannabis industry that excel in creating quality workplaces for their employees. Dan Nelson, CEO and Co-founder of Kansas City Cannabis Company, expressed his gratitude for the recognition. “We are extremely honored to be chosen for this prestigious award and recognition… Kansas City Cannabis Company is one of the best dispensary teams in the State of Missouri. Our employees are what makes this such a special place.”

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