January 3, 2023

Marijuana Amendment 3

On November 8, Missourians voted “Yes” to approve Constitutional Amendment 3, legalizing recreational use and sale of cannabis throughout the state. Amendment 3 and regulations proposed by the Department of Health and Senior Services (“DHSS”) map out the next few years of Missouri licensing requirements and business regulations. The Amendment went into effect December 8, 2022 and the draft regulations will be finalized soon.

Adult/Recreational Possession and Cultivation – Consumers over the age of 21 may now possess up to 3 oz. of dried, unprocessed marijuana, or its equivalent. Possession above these legal limits can result in sanctions and an administrative penalty of $200. Consumers may also apply for cultivation cards to grow up to six flowering plants, six nonflowering plants 14 inches tall or more, and 6 nonflowering plants under 14 inches tall at any given time in an enclosed locked facility in the consumer’s primary residence, not visible from a public place. There is a limit of two cultivation cards per household. Any supply of marijuana cultivated in excess of three (3) ounces must remain enclosed and locked at the consumer’s private residence. All personal cultivation must take place at the consumer’s private residence.

New Types of Licenses – There are two new categories of recreational business licenses to be issued by DHSS: (1) comprehensive facilities; and (2) microbusiness facilities.

Comprehensive: Comprehensive facility licenses can be for cultivation, manufacturing, or dispensaries. The first round of comprehensive licenses begins on December 8, 2022, and will be issued to any licensed Missouri medical marijuana facility in good standing that applies for conversion to a comprehensive facility license and pays the accompanying $2,000 fee. The application period for this round opened December 8, 2022, and must be approved or denied within 60 days. Comprehensive facility licenses will only be awarded to medical marijuana license holders until mid-2024.

Microbusiness: There are two types of microbusiness licenses: wholesale and dispensary. A microbusiness wholesale facility is able to cultivate marijuana and manufacture marijuana-infused products, whereas a microbusiness dispensary facility can sell marijuana and marijuana-infused products to consumers, qualifying patients, and primary caregivers. Importantly, microbusiness facilities are only able to transact with other licensed microbusiness facilities (other than transportation and testing facilities), meaning a microbusiness wholesale facility cultivating marijuana and/or manufacturing infused products may only sell those goods to a microbusiness dispensary facility licensed by DHSS. DHSS will begin accepting applications for microbusiness facilities on June 6, 2023. A microbusiness facility applicant with an owner who is also an owner of a medical facility will be denied licensure.

Eligible applicants for a microbusiness license must be majority owned by individuals who each meet at least one of the following qualifications:

  1. Net worth of less than $250,000 and an income below 250% percent of the federal poverty level, for at least three of the ten calendar years;
  2. Disability resulting from military service;
  3. Residency in an area that experiences high poverty levels, high unemployment levels, or historically high rates of incarceration for marijuana-based offenses;
  4. Personal or family criminal history relating to a marijuana-based offense; or
  5. Graduation from an unaccredited high school or resided in a zip code with an unaccredited high school for the last three of five years. 

Number of Licenses Available – The number of licenses for both medical and recreational facilities limited.  The Department will only issue:

  • 62 combined medical and comprehensive (i.e. adult use) cultivation facility licenses;
  • 88 combined medical and comprehensive manufacturing facility licenses;
  • 24 medical and comprehensive dispensary facility licenses, combined, in each of the 8 US congressional districts (a total of 192)
  • Six microbusiness licenses in each of the 8 US congressional districts, for the first 270 days; four will be microbusiness wholesale licenses and 2 will be microbusiness dispensary licenses (a total of microbusiness 48 licenses, initially); 
  • An additional six licenses in each of the eight US congressional districts, between the first 270 and 548 days; four will be microbusiness wholesale licenses and two will be microbusiness dispensary licenses;
  • An additional six licenses in each of the eight US congressional districts, after the first 548 days; four will be microbusiness wholesale licenses and two will be microbusiness dispensary licenses; and
  • 10 marijuana testing facility licenses.

The number of transportation facilities and seed-to-sale tracking system licenses will not be restricted. Despite the above limitations, DHSS has allowed itself the flexibility to ease the restrictions, if necessary, in order to meet demand and to ensure a competitive market while also preventing an over-concentration of facilities.

Lottery Awards – In cases where there are more applicants than available licenses for comprehensive and microbusiness facilities, DHSS will utilize a lottery system to select which applications will be reviewed. All timely applications submitted with an application fee will be eligible for the lottery. Eligible applications will be randomized and listed in sequential numerical order, and DHSS will review each application in order to determine if the applicant is eligible for licensure until the maximum number of licenses is issued.

Additional Amendment 3 Rule Changes – In addition to physicians, nurse practitioners may now certify that patients have a qualified condition to obtain their qualifying patient card. There are now employment protections for qualified patients, protections for tenant possession in leases, and a path to expungement for those who have marijuana possession on their criminal records. There are also updated attorney protections, tax deductions, privacy updates, and a position of Chief Equity Officer established under Amendment 3. For more information on these topics, or to learn more about the draft rules discussed above, please reach out to a member of our cannabis practice group.

Authors: Mallory Fisk and Zoe Hall