Booming Missouri medical marijuana industry bets on full legalization in 2022

In the town of Humansville, Missouri, troops of cannabis workers are tending to crops in a facility about the size of a typical Target store. They are cultivating dozens of strains of flower for Flora Farms, one of the state’s most ubiquitous brands.

“We think the market will go up three or four times (if full legalization passes),” said Mark Hendren, president of Flora Farms. “We hope that, and we expect that. And that’s just looking at what’s happened in other markets.”

BD Health Ventures, owner of Flora, has given $250,000 to the most plausible path to full legalization this year in Missouri: Legal Missouri 2022, which is gathering signatures to place a proposed constitutional change on the Nov. 8 ballot. That includes two contributions totaling $215,000 it made last month, records show.

Cannabis business license holders have lined up behind Legal Missouri, which had banked $1.1 million for the effort by the end of last year. The latest report filed with state ethics regulators shows the campaign dropped nearly $500,000 in December on signature-gathering services.

Legal Missouri last month hired Strategic Capitol Consulting, the lobbying firm of former House Speaker Steven Tilley, which also lobbies for the Missouri Medical Cannabis Trade Association.

“We are monitoring legislation that proposes to change the initiative process,” said John Payne, campaign manager for Legal Missouri.

House GOP lawmakers have advanced to the floor House Joint Resolution 79, legislation that would raise the threshold to change the state’s constitution from a simple majority to a two-thirds majority.

On Jan. 19, in the House Elections and Elected Officials Committee, Rep. Adam Schwadron, R-St. Charles, amended the legislation so it would take effect Jan. 1, 2023, upon voter approval.

He said if Gov. Mike Parson chooses to place it on the August ballot, it could disrupt other questions already in the works for the November election.

“We already have initiative petitions out there, and changing the rules in the middle of the game may be a bit of a sticky point,” Schwadron said.

Rep. Dan Shaul, R-Imperial, who chairs the elections committee, said he expects talk on the effective date to continue.

“I’m sure they’ll be some discussion about that, yes,” he said.

Flora Farms

Hendren said he and his partners chose a site in Humansville, about 45 miles north of Springfield in Polk County, after learning its ZIP code was one the state considered economically distressed based on U.S. Census Bureau employment data.

Business applicants with sites in those ZIP codes received bonus points during the state’s license scoring process in 2019.

Hendren also said he and his partners, in their state application, outlined their commitment “to a higher starting wage, especially for this Polk County and St. Clair County area.”

“We committed to start at a starting wage of $15 an hour plus we provide health insurance for all our employees,” he said. “That’s just starting, blue-collar wages. As they move into leadership and management positions obviously they’d be paid more money.”

Hendren said Flora Farms employs about 175 people in total. The company has three cultivation licenses — each allowing 30,000 square feet of flowering canopy — in Humansville.

The owners operate three Flora-brand dispensaries, in Humansville, Springfield and Neosho; each store employs about 10 individuals.

Hendren said the company has plans to expand into manufacturing products such as pre-rolls and vape cartridges. He said workers commute to Humansville, with a population of about 1,000, from all over the region.

“We have people from Bolivar, the Lake area — Stockton, as far north as Clinton and Osceola,” he said.

Hendren described his company’s effect on the local economy as “strong.”

“As I said, about 175 (employees) total,” he said. “And 18 months ago, there were zero. And a lot of those people, of course, some of them have found places to live, and to rent or to purchase.”

CAMP cannabis

In St. Louis, workers at CAMP Cannabis, with one cultivation license and one manufacturing license, are awaiting the company’s first harvest, currently scheduled for March 8.

Then, the bud must be dried and cured, said Susan Griffith, CEO of the company.

“You’ve got to put (at least) 12 days into the dry, cure, harvest process, because you don’t want it to be wet,” she said.

CAMP, which stands for Certified Alternative Medicine Providers, is planning to enter the market at a time when other companies such as Flora have already secured dispensary shelf space.

“We’re identifying stores that we’ve known and that we believe to have good reputations and have good clientele,” Griffith said.

She said as of last week, the company employed 14 people with plans to bring on an additional 10 to 12 cultivation technicians in the coming weeks. Griffith said the company’s goal is to one day employ 90 people.

Right now, the small staff’s focus is mostly on cultivation. The company currently is maintaining 7,000 square feet of flowering canopy, with plans to one day max out at the 30,000 square feet allowed per cultivation license.

“Everybody now is starting from the ground up,” Griffith said of the company’s workers. “So they have the ability to learn everything regardless of where they want to go.”

CAMP Cannabis has contributed $12,500 to Legal Missouri 2022, state records show.

“It just brings a lot more opportunity for Missourians,” Griffith said of full legalization. “Certainly there are Missourians who for one reason or another don’t get (medical) cards and we lose a lot of potential revenue for the state, you know, bordering Illinois,” where marijuana is fully legal.

Booming business

Lyndall Fraker, director of the Section for Medical Marijuana Regulation in the Department of Health and Senior Services, recently told lawmakers during a House committee hearing that medical marijuana sales have “exceeded our expectations.”

The state on Friday reported $26.6 million in dispensary sales last month, bringing the total to $241.7 million since October 2020, when sales of medical marijuana began.

It was the seventh straight month sales exceeded $20 million, according to the state figures.

As of Friday, the state had approved 186 dispensaries, 64 manufacturing facilities and 46 cultivators to begin operations.

 The state has issued 6,596 agent ID cards for industry workers, with the vast majority issued after dispensary sales began in October 2020, according to the Missouri Medical Cannabis Trade Association, or MoCannTrade.

MoCannTrade pointed to state figures showing 77,600 jobs created last year, using the count to estimate that cannabis workers accounted for nearly one in 10 new jobs last year in Missouri.

The trade group is touting such statistics following predictions that the state’s limit on dispensary, cultivation and manufacturing licenses, to 338, would stifle competition and harm patient access through higher prices and fewer options.

“Missouri’s medical cannabis industry is delivering on its promise of not only providing safe, affordable and convenient access for patients but also helping to infuse the state’s economy with sizable investment and millions in new tax revenue,” Andrew Mullins, executive director of MoCannTrade, said in a press release last week.

Legal Missouri

With Legal Missouri racing to meet a May deadline to secure the signatures needed to make the November ballot, a separate attempt to legalize the drug is languishing in the Legislature.

Rep. Shamed Dogan, R-Ballwin, is sponsoring House Joint Resolution 83, which would also legalize cannabis for adult use.

Legal Missouri builds on language voters approved in 2018 legalizing medical marijuana, but Dogan’s proposal repeals that system.

The medical marijuana program’s rollout resulted in an avalanche of appeals filed in 2020 by rejected applicants with the Administrative Hearing Commission. More than 500 appeals remained active as of Friday, according to state cannabis regulators.

“I’m a free-market person and I think that this locks in a system that we have now which is not remotely a free market, that gives a leg up to people who are already in the existing medical marijuana program and puts restrictions on people who want to try to get into the industry,” Dogan said of Legal Missouri 2022.

Dogan’s proposal says “no special licensing shall be required” beyond rules that apply to growing, processing or handling “any nontoxic food or food product.”

The Legal Missouri proposal would allow current medical marijuana business licensees to have the first shot at comprehensive recreational business licenses.

The proposal says medical marijuana licensees would have the right to “convert” their medical licenses into “comprehensive” ones. The state wouldn’t be able to grant full licenses to other entities for 548 days after the state begins issuing licenses.

“All new licenses for the first 548 days will be micro licenses reserved for smaller operators and individuals and groups who have been adversely affected by our current, unjust laws prohibiting marijuana,” said Payne, campaign manager for Legal Missouri. “As in most states, medical marijuana facilities will also start to convert their licenses to comprehensive licenses.”

Dogan panned the “micro license” plan.

“Micro,” he said. “Just that word is a problem.”

Jack Cardetti, spokesman for MoCannTrade, said the organization “is singularly focused right now on serving Missouri’s 160,000 medical cannabis patients” when asked about its position on Dogan’s legalization bill.

Cardetti’s company, Tightline Public Affairs, was paid $40,000 by Legal Missouri 2022 last year for “operational oversight.”

The MoCannTrade PAC, meanwhile, gave more than $50,000 to a bipartisan group of lawmakers in the last fundraising quarter, according to Missouri Ethics Commission records.