ST. LOUIS — If Missouri voters on Nov. 8 approve Amendment 3, allowing adults 21 and and older to use, possess and grow cannabis, it's projected to create a significantly larger market for the companies that have already emerged as major players in the state's legal medical marijuana market.
Since medical marijuana sales became legal in Missouri in October 2020, revenue from dispensaries has grown to nearly $500 million as of the end of September, and has nearly doubled in 2022 alone after ending last year at just $215 million.
The campaign backing recreational legalization, though, predicts sales will rise to around $1 billion per year within a few years, generating at least $50 million a year in tax revenue for state and local governments, said John Payne, the campaign manager for Legal Missouri 2022.
Ahead of the election, the Business Journal spoke with medical marijuana firms throughout the St. Louis region to find out how they’re preparing for the possibility of adult-use legalization. Here are three examples.
Proper Cannabis, a St. Louis-based medical dispensary that opened a $20 million facility in Rock Hill last year, operates three dispensaries in the St. Louis region. Its fourth and fifth stores, another location in greater St. Louis and an expansion to Kansas City, are on track to open this year.
The patient base in Missouri is currently north of 200,000 patients, a number that is likely to double or even triple if adult-use is legalized, said Proper CEO John Pennington.
“Right now, we are working on reprograming and reutilizing our special needs at our facility,” he said. “We are addressing our supply chain and production capacities, and our teams and leaders are considering what additional technology, equipment and personnel is needed to accommodate the demand and increase in the market.
This includes implementing an enterprise resource planning system and software which will be rolled out over the next six months and require an additional one to two full-time employees. The company, which employs around 130 people, also plans to add more extraction and manufacturing equipment to its lab and culinary departments which will likely lead to running an additional shift of 10 to 15 more employees, Pennington said.
Proper, which already has a 58,000-square-foot cultivation space, is also expanding its existing facility by 25,000 to 30,000 square feet in preparation for a drastic increase in demand. Pennington declined to give an exact figure but said the total investment has been tens of millions of dollars, and he expects to invest a few million more should the amendment pass.
“It’s both exciting and needed," he said. "What you have in Missouri is two to three times the number of people who are likely already consuming, who will now have safe, compliant and enjoyable places to shop with reliable quality products and medicine."
BeLeaf Medical, an Earth City-based medical cannabis firm, made a notable change as it prepares for the possibility of a market expansion into recreational cannabis.
It hired a CEO who's gone through it before — multiple times.
CEO Jason Nelson joined the company three and a half months ago from Chicago-based Cresco Labs, where he was the cannabis firm's senior vice president of horticulture. Though his specialty has been in the cultivation side of cannabis, at Cresco he helped the company expand into 10 states, including five that made the transition from medical to recreational sales.
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