With the legalization of medical marijuana in Missouri, the state now has the opportunity to watch the birth of a new industry. Interested investors are flocking from across the country to be a part of this fledgling enterprise, hoping to strike gold and begin a new business venture that will quickly turn a profit.
When Amendment 2 passed in Missouri, projected sales were expected to be around $111 million, with 2,800 jobs created in the state. With a relatively standard tax rate of 4% for the medical industry, business owners won’t be held back by tax rates either.
If you’re interested in learning more about the business outlook for medical marijuana in the state of Missouri, read on. We’ve got all of the information you need right here.
The state of the industry
As of right now, Amendment 2 is regulating the number of dispensaries, cultivators and processors that are allowed in the state. That number currently sits at 192 dispensaries, 60 cultivators and 86 infused-products manufacturers. This breaks down to 24 dispensaries per congressional district, 1 grower per 100,000 Missouri residents and 1 infused-products manufacturer per 70,000 residents. This ensures that patients can easily access their medicine without having to go unnecessary distances. If the initial number of businesses isn’t enough for patients to have easy access, the Department of Health and Senior Services is willing to offer more licenses to businesses if needed.
Though the applications won’t be released until June, Missouri began accepting pre-application fees to help fund the start-up of the program. In the first week alone, there were over 250 pre-application fees filed, increasing to more than 400 by February 15th. At this time, over $3 million worth has been submitted in pre-application fees. The state will not disclose any of the names of the groups who are filing for a business license.
The state is preparing for around 180,000 people applying for medical marijuana cards, evening out to about 800 patients per dispensary. As time passes, this industry is only expected to grow even more. One data outlook expects that there will be 2.4 million medical marijuana patients nationally by the end of 2019 and $5.9 billion in sales during the same time.
How do I get started in the industry?
For those who want to get a start in the medical marijuana business, you’ll need to make these key decisions first:
- What type of business are you opening? Depending on your interests, you may be opening an infused-products manufacturing facility, a dispensary or a cultivation facility. If you want to operate a seed-to-sale business, you may want to have one of each of these businesses. Be aware that each unique business will require its own application and licensing, so you’ll need to receive all three licenses to operate as intended. Planning for the type of business you’ll have will help you to coordinate your business plan properly.
- Who will be on your team? Many states ask that you have a diverse team backing you, providing experience in pharmaceuticals, medicine, retail, security, accounting, addiction counseling and more. Though Missouri has not released its finalized rules yet, we anticipate that similar requirements will be in the final draft of the rules. As you assemble your team, keep in mind what expertise each of you brings to the table.
- Do you have adequate capital? Simply put, it isn’t cheap to start up a medical marijuana business. You’ll need a large amount of capital to cover real estate, staffing and other assorted business expenses, not to mention application fees and license costs. You may want to seek the help of an investor if this is too much for you to tackle on your own, but keep in mind that a Missouri resident must own more than 50% of the business in order to fit in line with Missouri regulations.
Are you ready to start a medical marijuana business?
Contact Reynolds & Gold. We can guide you through the process of developing your business and assist you with getting your license.