Rosy first year of adult-use sales has Missouri cannabis operators optimistic

Last year alone, the state sold $1.3 billion worth of marijuana.

The launch of Missouri’s adult-use cannabis program hasn’t been perfect, but a year later, it is blossoming beyond some of its rosiest projections.

Last year alone, the state sold $1.3 billion worth of marijuana, with most of it on the recreational side.

Green Market Report caught up with John Mueller, CEO of Greenlight, one of the state’s largest distributors, to take a temperature check on an environment with more promise on the horizon.

This interview has been edited for length and clarity.

Take me on a drive on how it’s been over the past year with adult sales (in Missouri).

John Mueller: Surely, the brightest star of 2023 was Missouri. We did about two-and-a-half times what they projected for adult use in the first year. Every operator here is thrilled with the growth, much of which is coming from states that haven’t embraced cannabis.

Missouri’s unique aspect is our strong trade association. Everyone’s been rowing in the same direction. The entire industry was unified to get the initiative passed. We worked with the NAACP for social equity and managed to get normal people to align with the industry, which is difficult.

The initiative gave the state a definitive timeframe to issue adult-use licenses. We started three or four days ahead of schedule, and it propelled the entire industry. One of every 10 jobs created in Missouri this year has been in the cannabis industry. It’s been as good a launch as you could ask for.

What does Missouri get right compared to other markets you operate in?

Mueller: We only operate in limited license markets. We avoid the free-for-all scene in states like Oregon, where there are tens of thousands of operators.

In other markets, regulators aim to stifle the entrepreneurial spirit, but we don’t have that in Missouri. Our regulator in Jefferson City isn’t trying to put cannabis businesses out of operation. They want us to be compliant, protect kids, and ensure safe driving – the important things in our industry.

How has working with regulators in Missouri been?

Mueller: I speak nationally and always point to Missouri as the gold standard. They’ve opted for limited licenses, which means they don’t need an excessive number of regulators like Oklahoma, which is asking for a huge number. This approach doesn’t deplete the tax dollars meant for veterans.

The regulators work with the industry and listen to us, like with the changing packaging rules. There’s open dialogue. They’re focused on ensuring everything is tested and compliant.

Everything must come from Missouri. There was a case where someone lost their license for bringing in out-of-state products. This sets a standard.

They’ve done an exceptional job.

The market is doing well, but what are Missouri’s weak spots and areas for improvement?

Mueller: We’ve got additional canopy coming online. The market is still pretty tight, especially for oils.

I wouldn’t mind seeing a compression in our cost per gram at the retail level, as it would cut into the black market. Watching businesses expand, like ours, is key. If we can lower prices a bit, without going to extremes, it will help dig into the black market more.

It’s about conversion. Selling a gummy at $3 instead of 10 expensive drinks could shift the market. As public perception changes, people will see this as a safe and compliant business.

What’s on your radar for this year and beyond?

Mueller: We’re a relatively new mid-sized multistate operator, making about a quarter billion in revenue and paying dividends. We’re expanding cautiously into new markets, excited about Ohio and potential good news from Florida. We have a full lobbying team advocating for more patient access.

Everyone is waiting for rescheduling to Schedule III. It would be like Tylenol with codeine, changing the market dramatically. It would affect everyone’s net income statements, lead to a flood of venture capital, and trigger growth.

We’ve seen a lull in mergers and acquisitions, but rescheduling could change that. I’m optimistic it’s coming in the next 90 days.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.


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