2023 marked MO’s first year with legal recreational marijuana. In just 12 short months, the industry raked in ~$1.3 billion. Yes, that is billion, with a “b.” We shared this info with y’all last week and were met with the same question repeatedly:
Where did all that tax revenue go?
City Editor Charmaine did some sleuthing (ahem, looked at the state constitution) and smoked out the answer. Here’s what she found.
Medicinal sales taxes
Medicinal marijuana has a 4% sales tax rate. That money is puff-puff-passed around like so:
Two percent is reserved for governmental operating expenses. The remaining two go to the Missouri Veteran’s Commission to provide healthcare + social services for military veterans. Some of its services include tuition + housing assistance, mental health assistance, and drug rehabilitation.
Recreational sales taxes
Recreational marijuana has a 6% sales tax. How this money is distributed is a bit more complex.
First, governmental operating expenses for managing the marijuana industry — like cash transfers and processing paperwork — are covered.
Second, the money is used to pay for all processes related to expunging criminal records for nonviolent marijuana expenses. (Missouri cleared 100,000+ records last year.)
After those two items are fulfilled, the remaining balance is split three-ways:
- One-third is sent to the Missouri Veterans Commission and its allied state agencies.
- One-third is reserved for grants for nonprofits that provide low-barrier drug addiction treatment.
- One-third goes to the MO public defenders system and is reserved solely for legal assistance for low-income Missourians.
Hope this cleared the air for you. If you have any more questions you want us to dive into, let us know.