How a beer scion entered the cannabis industry for the long haul

Adolphus Busch IV (Courtesy photo)

(Editor’s note: This story has been updated.)

This is part of a regular series of MJBizDaily interviews with major THC industry players. To be considered for an interview, contact editorial@mjbizdaily.com.

Adolphus Busch V walked away from a solid cannabis career in Colorado to build something in his home state of Missouri.

But the state’s rule changes have tilted the playing field toward a handful of big operators, and companies like his are getting squeezed out of the $1.5 billion market, he told MJBizDaily recently.

Busch, a member of the Anheuser-Busch brewing family, worked in Colorado with brands like Keef and Pure Greens. When Missouri opened its medical marijuana licensing process in 2019, he applied for a permit.

“I never really wanted to leave the West – my passions are out there,” he said. “But it was natural for me to move back and start a company.”

That company is Teal Industries, where Busch is CEO. It manufactures pre-rolls, vape cartridges, disposables and concentrates under the Teal Cannabis brand from a facility in St. Peters, Missouri. The company opened its Current Cannabis retail store in the St. Louis metro area last year.

Did Anheuser-Busch fund a Missouri cannabis company?

The Busch name opens doors in Missouri. But it also creates assumptions.

His cousin, August Busch IV, was CEO of brewing giant Anheuser-Busch in 2008 when the company was sold to InBev for $52 billion.

At the time, Adolphus was still in high school. He never worked there, and sale proceeds went to shareholders — not, he stressed, his cannabis company.

His father, Adolphus Busch IV, became one of the state’s early cannabis advocates. He received one of two hemp licenses in Missouri in 2015 and was one of the largest individual contributors to the effort that passed medical cannabis legislation. He died in May.

“Dad was never interested in cannabis until I showed him the medicinal benefits and got him interested in the plant and products,” Busch said. “He helped get the bill across the finish line.”

Busch V raised $3.5 million in 2020 to launch his cannabis company. Two family members invested, but he said he pitched them the same way he pitched the other 25 investors.

“That’s a hurdle I’ve always had to jump over,” he said. “None of it was Anheuser-Busch money.”

What was Busch’s strategy to secure Missouri medical cannabis licenses?

When Missouri’s medical program opened, Busch teamed up with Bernie Heimos, who owns greenhouses in Illinois, and three others to help with writing the applications.

The group spent about nine months preparing 11 applications: five for retail licenses, three for manufacturing and three for cultivation. That was the maximum allowed for a single ownership group under Missouri’s medical cannabis rules, which also required 51% Missouri ownership.

But regulators denied all three cultivation applications and all five retail applications. The three manufacturing licenses came through.

“Why would you need that if you couldn’t grow or sell?” said Busch, who believes the state issued too many manufacturing licenses.

He later purchased the right to appeal denials from 21 applicants for $1.7 million. In May 2024, the state offered a deal: If Busch dismissed all his appeals, he could have one retail license.

What did Missouri regulators get right?

For all his frustrations, Busch gives regulators credit for the state’s limited-license structure. Missouri authorized 192 dispensaries, 86 manufacturing licenses and 60 cultivation licenses.

“They did a great job with the number of dispensaries,” he said.

Each cultivator was allowed up to 30,000 square feet of flower canopy. Busch estimates that cultivation in the state is about 50% built out and there’s already enough flower in the market.

When adult-use passed, licenses in good standing converted to comprehensive licenses almost immediately. It was an easy switch compared to what Busch experienced in Colorado, where medical products ran under yellow Metrc tags and adult-use under blue – all stored separately.

Under Missouri’s comprehensive license, the same product can be sold to both medical and adult-use customers once it reaches a store shelf.

What’s Busch’s gripe with Missouri’s cannabis market?

Busch’s biggest complaint isn’t that regulators are too strict. It’s that they’re too loose in the wrong places.

Dropping a requirement that companies must be 51% owned by a Missouri resident was the biggest mistake the state made, he said. Outside capital can now enter freely, and the rules allow ownership of up to 10% of any one license type.

The language around that limit is where things get questionable, Busch said.

Companies can set up separate entities that each own 10% of a license type, stacking control far beyond what the cap was meant to allow.

That’s how Good Day Farms – Missouri’s largest cannabis retailer – amassed a bigger market share than what’s allowed for under state law, according to a lawsuit filed in April by Vibe Cannabis and Local Cannabis Cos.

The ownership shifts led to the wave of reciprocity and supply agreements that took hold around mid-2024.

Large vertical operators with 10 to 20 stores cut deals that pack their own shelves and pushed out brands without a retail presence. That’s meant a tougher road for Teal and Busch, who just owns the one store.

“One store doesn’t get us anyplace with reciprocity,” Busch said.

He put his potential loss in the eight-figure range, pointing to the shelf space his brands lost at retailers that favored larger brands.

“In a lot of cases, they just kind of forgot about us,” Busch said. “Changes to the rules have led to monopolies being built in Missouri, which has made it very challenging for the smaller groups.”

How has Missouri’s cannabis market evolved?

Although medical cannabis patient counts are now declining in states with adult-use legalization, Busch still sees medical as a segment worth holding onto.

But he understands why the slide is happening.

While other states permit higher THC levels for medical marijuana, the product is the same for both medical and adult-use in Missouri, and the cost savings for having a medical card has shrunk. And the clearest difference is the purchase limit: Adult-use customers in Missouri can buy more product in a 30-day window than medical patients can under the state’s allotment.

“Medical patients have realized that,” Busch said.

Down the road, Busch expects eventual federal cannabis legalization to fundamentally change what a medical program looks like. He sees it shifting toward something more like traditional healthcare, built around doctor prescriptions for high-dose formulations or products that aren’t available in an adult-use store.

“I just see it being more traditional way down the road when we do have federal legalization,” he said.

What does the future hold?

Busch wants to build his brands and expand to five stores by next year and 10 by 2028, through acquisitions and mergers with smaller operators.

It’s not a cheap path – license prices haven’t dropped below $5 million. And he’s skeptical of debt financing, citing high interest rates.

“You’re just tying an anchor around your neck,” he said.

He sees a potential opening as cannabis loans start maturing and operators face tough refinancing decisions, which could put assets on the market at better prices.

“The most value will be in CPG and brands,” Busch said. “Just like my family was successful in the beer industry, though I never got to experience it firsthand.”

Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.