Missouri Health and Wellness Dispensary

The inside of the Missouri Health and Wellness medical use cannabis dispensary, which is set to open in Washington soon. The dispensary would be among the first in the state to open, according to company officials.

No Opening Date Set For Washington Dispensary

With Washington’s first medical-use cannabis dispensary poised to open in a matter of weeks, many are wondering how much Washington stands to gain in sales tax revenue. 

City Administrator Darren Lamb said it will take months before Washington will be able to answer that question. 

“We simply do not know what kind of impact the dispensary will have on the city,” Lamb said. “If this dispensary is the third one to open in the metro St. Louis region, then I would expect that we would see quite a few people coming out to get their prescriptions filled, and that would mean more sales tax revenue for the city.” 

A number of factors are contributing to the uncertainty, he explained.

First, the city could be home to two medical-use cannabis dispensaries.

Officials with Missouri Health and Wellness, the parent company of the dispensary at 10 Franklin Ave., said they are ready to open but do not have an opening date set yet. 

A second dispensary, Columbia Care, received a state license to operate at 1380 High St., but the business no longer appears active. 

Another factor is that purchases made at a dispensary will be subject to three separate sales taxes, which could hamper officials’ ability to track a dispensary’s overall impact. 

The three sales taxes are a 1-cent general fund sales tax, a half-cent capital improvement sales tax and a half-cent transportation sales tax. 

The general fund sales tax finances various city entities, including the city’s parks and recreation department and police department. The fund also pays for employee wages and benefits, Lamb said. 

The capital improvement sales tax pays for large-scale projects in the city such as water and sewer system upgrades and the new city pool. The transportation tax pays for improvements to the city’s streets.

Lamb said it will take at least two months following a dispensary’s opening before city leaders will get their first sales tax revenue reports from the Missouri Department of Revenue. 

Another factor is when and if other dispensaries in the state open, potentially drawing clients of Washington’s dispensary away, and whether the public’s interest in purchasing cannabis wanes. 

Two St. Louis County dispensaries — in Ellisville and in Manchester — became the first in the state to sell medical cannabis in mid-October. A third dispensary later opened in Lee’s Summit. 

If Washington’s dispensary becomes the fourth dispensary to open in the state, it would be the closest to urban centers like Columbia, Springfield, Rolla and Jefferson City. A Springfield dispensary is slated to open this month.

Taste Buds, a St. Clair-based medical use cannabis dispensary, plans to open in December.

Jack Cardetti, a spokesperson for the Missouri Medical Cannabis Trade Association, said the dispensaries that have opened in the state have “seen strong sales and tons of interest.” 

“We know this is really early in the industry and that for the time being the options are going to be more limited as dispensaries really only have flower right now,” Cardetti said. Dispensaries will be begin selling other cannabis-infused products such as edibles and tinctures as production ramps up in Missouri.    

As of Oct. 2, more than 62,380 Missourians have received medical-use cannabis cards, according to Lisa Cox, communications director with the Missouri Department of Health and Senior Services. It is not known how many of those cards were issued to Franklin County or regional residents.  

Cox said last month there were 9,000 applications still awaiting approval. 

Missouri medicinal-use cannabis dispensaries were once expected to generate as much as $24 million in sales revenue for the state. Missouri will tax purchases at medicinal cannabis dispensaries at 4 percent, significantly less than the taxes assessed on purchases made at Illinois dispensaries, where state and local taxes can range from 26 percent to 41 percent depending on the THC, or the psychoactive substance in cannabis. 

However, a 2019 study conducted by three University of Missouri economics professors tampered expectations when they projected the state would see $2.9 million to $3.4 million in additional tax revenue. 

For comparison, a report from the Brookings Institute found that taxation of medical use cannabis vary widely among the 33 states where it is legalized. Some states, such as Illinois access a 1 percent sales tax paid by the purchaser and a 7 percent “privilege tax” paid by the grower and dispensary. 

Other states have set taxrates between 2.9 percent and 7 percent.

Other Businesses

Noah’s Arc Foundation received an approval from the state to grow and another for infusing cannabis products, including edibles, in September 2019. The company, which had submitted nine other applications for other cities in the state, had indicated it wanted to build in the Heidmann Industrial Park.

A Union-based dispensary, Green Gryphon LLC, 6 Dell Centre Way, is not listed as having received its final approval from the state.