On Thursday, representative Adrian Plank, D-Columbia, introduced new legislation that would remove restrictions to the number of licensed marijuana facilities in the state.

HB 985 reads in part, “Due to the demand for marijuana in this state and consistent with its obligation to lift or ease any limit on the number of licenses in order to meet such
demand as described in Article XIV, Section 2, Subsection 4, Subdivision (2) of the Constitution of Missouri, the department of health and senior services shall issue a license to any applicant who meets minimum standards for the license for which the applicant applies.

“Notwithstanding subsection 2 of this section, the department of health and senior services may deny a license to an applicant who meets minimum standards for the license for which the applicant applies in order to comply with the ten percent cap for ownership of licenses established in Article XIV, Section 2, Subsection 4, Subdivisions (9), (10), and (11) of the Constitution of Missouri.

“The general assembly hereby abrogates any limits on the number of licenses established in regulations.”

Plank’s bill echoes multiple bills filed in the legislature since the legalization of medical marijuana in 2018 and the awarding of licenses in 2019 and 2020.

While the bill indicates a need for the expansion of the number of licenses, Missouri dispensaries have not seen consistent supply shortages since late 2020, with virtually no facilities selling out of flower or marijuana product in more than a year. In fact, many Missouri cultivators have a surplus of cultivated flower currently stockpiled, due to the limited demand from the medical market, which has led to the quick decline in wholesale and retail prices.

The launch of adult use is sure to be accompanied by increased demand and traffic, the majority of licensed cultivators in the state have operated at less than 70% of their allowable canopy space – with several operating at or below 50%, In 2021, the Department of Health and Senior Services estimated total capacity utilization for Missouri marijuana cultivators at 35.06%, while estimates for  2022 utilization projected canopy space to expand to nearly 64%. Prior to the legalization of adult use marijuana in November it was estimated that Missouri operators were still utilizing approximately 40% or less of available canopy space.

Cultivators around the state have already begun the process of expanding their canopy and have rooted new plants in advance of the anticipated rise in demand brought on by increased dispensary traffic accompanying adult use sales.

“Missouri facilities are already gearing up for adult use and increasing their capacity utilization, but we know there is an oversupply at the current production rate,” explained MoCannTrade Executive Director Andrew Mullins. “Moreso, with 144 new microbusiness licenses coming on later this year, the last thing we need is for the legislature to direct the issuance of more licenses and highly diminish the opportunity of those licenses. The application process for microbusiness licenses is designed to benefit those that have already been economically disenfranchised, the issuance of more licenses would only exacerbate that.”

Oklahoma, one of the few markets with truly unlimited license approval, initiated a moratorium on licenses in late 2022 in response to an overwhelmed regulatory body and a significant increase in deferred product funneling to the illicit market.

Oklahoma Representative Rusty Cornwell said he introduced Oklahoma House Bill 3208 to give the Oklahoma Medical Marijuana Authority the power to implement a moratorium on licenses as regulators deem necessary. “Since 2018, Oklahoma has seen a huge number of commercial medical marijuana grows and facilities flooding into our communities,” Cornwell told Tulsa World upon introducing the bill. “In the initial rush to roll out a system for granting commercial licenses, we’ve failed to enforce their compliance with state law. House Bill 3208 would temporarily pause the issuance of commercial licenses so that we can confirm current operations are complying with the law.”

Oklahoma Governor Kevin Stitt said prior to the enactment of the moratorium, “Oklahoma charges just $2,500 for a commercial license. Even California charges up to $181,000 — 72 times more. As a result, we have seven times more growers than California with just 10 percent of the people.”

“You know as well as I do that not all of that product is being sold legally,” Stitt said at the time.

As of today, Oklahoma is home to more than 7000 licensed cultivators, nearly 1800 licensed processors, and more than 2800 licensed dispensaries; meanwhile, there are only 27 licensed marijuana testing facilities in the state.

 

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