Missouri marijuana retailers challenging local taxes

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In a growing legal fight that many predicted, two marijuana companies in Missouri are suing to overturn local taxes they argue are unconstitutional.

Adult-use sales began in February in Missouri, where cannabis buyers pay a 6% state tax – one of the lowest rates in the United States.

Additional municipal taxes of up to 3% are allowed if voters approve such a levy via a ballot initiative.

But several counties in the state are illegally “stacking” a 3% county tax on top of the 3% municipal tariff, the Missouri Cannabis Trade Association told the St. Louis Post-Dispatch.

According to two recent lawsuits challenging the county taxes, that extra 3% tax is expressly forbidden under the adult-use legalization measure approved by voters in November 2022.

Vertical Enterprise, headquartered in St. Joseph in Buchanan County, and Robust Dispensary, based in Florissant in St. Louis County, argue in separate lawsuits that the 3% county tax can be applied only in unincorporated areas where a 3% municipal tax doesn’t apply, and that marijuana buyers can’t be charged both, Greenway Magazine and the Post-Dispatch reported.

A Dec. 8 trial date has been set for Vertical Enterprise’s suit, which was filed first. Robust is awaiting word on its action.

According to the Post-Dispatch, “county officials and marijuana industry leaders said in April they anticipated a legal fight” over retail cannabis taxes in Missouri.

Central to the businesses’ arguments is the legalization law’s definition of a local government, which provides separate explanations for incorporated and unincorporated areas.

Meanwhile, cash-strapped local governments say they’re counting on marijuana-tax revenue to pay for police and parks.