Missouri’s licensed cannabis businesses account for approximately 93% of reported consumer spending on marijuana in the state, according to a state-funded study of the adult-use market, which voters approved in November 2022.
The study, released last week by the Missouri Department of Health and Senior Services, also found that regulated cannabis sales are not excessively concentrated among licensed dispensaries statewide or within individual congressional districts.
The findings suggest that Missouri’s regulated market is effectively meeting consumer demand despite the state’s limits on cannabis licenses.
What are Missouri cannabis consumers buying?
Most consumers purchase flower rather than other product formats and spend an average of $161.81 per month. Price, THC potency and convenience drive most purchasing decisions, according to the study.
Flower accounts for approximately half of reported monthly cannabis spending, followed by vape products and edibles.
The high percentage of regulated sales suggests that Missouri’s licensed businesses have been successful in competing with unregulated sellers.
California, Colorado and New York have struggled with persistent unlicensed sales for years after launching adult-use programs. Regulators and operators in those states continue to cite illicit competition as a drag on licensed revenue and tax collections.
Missouri caps the number of licenses it issues, a policy that critics have long argued restricts supply, keeps prices high and pushes consumers toward unregulated sellers.
Despite those concerns, the study found no evidence of excessive sales concentration among licensed dispensaries and suggested that additional licenses might not be necessary at this time.
How do licensing caps affect Missouri’s cannabis market?
The study suggests that participation in the regulated market extends beyond major metropolitan areas. Despite the cap, the regulated market has captured most reported cannabis spending in less than four years of adult-use sales.
By comparison, New York also limits licenses, but its rollout has been slowed by legal challenges and enforcement gaps that allowed unlicensed storefronts to multiply.
Missouri’s study found that licensed dispensaries account for more than 90% of reported cannabis expenditures in every congressional district, suggesting that legal access is broadly sufficient statewide.
However, the researchers cautioned that their analysis measured how sales were distributed among licensed facilities, not whether ownership was concentrated among a smaller number of companies.
The study recommends removing requirements that determine how many dispensary licenses are issued based on population and congressional districts, allowing market demand to guide future licensing decisions.
The researchers also outlined alternatives, including maintaining the current licensing structure or issuing additional licenses in districts where greater competition might benefit consumers.
