After costs, the revenue generated can be used to process cannabis expungements, support veterans, fund drug treatment, and add money to the Missouri Public Defender System’s budget.
By Rebecca Rivas, Missouri Independent
According to state officials, since Missouri began selling marijuana in 2019, the state collected more than $100 million from taxes and fees.
In the constitution of the state, there is a roadmap for how the money can be spent.
First, let’s look at operational costs. According to law, all expenses incurred for running medical marijuana and recreational marijuana programs – such as salaries or professional services – must be covered by marijuana revenue.
The salaries of cannabis inspectors cannot compete with those of teachers who are paid from the main fund of the state, the general revenues fund.
Last week, the Missouri Department of Health and Senior Services told The Independent that the agency responsible for the program’s regulation has incurred expenses of $38.4 millions.
About a third is allocated to the cannabis division of the department. A third of the money was spent on hiring private attorneys who represented the state in appeals against denials.
After expenses, revenue can be used to support veterans, fund drug addiction treatment programs, and add to the Missouri Public Defenders System budget.
All this money comes with a big asterisk: the legislators have to pass budget bills that allocate these funds. They did so in the first week of may.
The money will begin flowing into these areas on July 1, when the state fiscal year begins.
According to records of the state treasurer and DHSS, the medical marijuana fund in the state had $22.7 million and the recreational marijuana fund $10.9 million as of April 30.
Medical marijuana
In 2019, medical marijuana was first introduced to the market. The medical marijuana program was launched in 2019. Since then, it has generated $85.2 million. Of that, $57.7 million came from fees. This includes new license application fees and annual license fees.
Sales tax revenues accounted for $27,4 million of the total.
The Missouri Veterans Commission was mandated to receive the revenue after operating expenses from the constitutional amendment which legalized medical cannabis in 2018. This appeared on the ballot under Amendment 2.
To date, $27 million have been spent on veterans’ support.
According to DHSS, to date the state has paid private attorneys $11.7 million in order to defend hundreds appeals by businesses that claim they were wrongly refused a license to cultivate and sell medical cannabis.
Wise Health Solutions was the company that made these decisions. The Nevada-based firm paid $2.2M to score marijuana business license applications.
There are 305 appeals pending out of the 850 initial appeals for licenses denied.
Lisa Cox said in an email sent to The Independent by DHSS last week that the reduction in cases was largely due litigants dismissing or reversing their decisions.
Revenues and costs of adult use
The revenue road map for the recreational adult-use marijuana program is slightly different, and it was defined by Amendment 3 which was approved by voters last November.
According to law, the first direct revenue goes towards operating costs. Then it is used for court expenses related to expunging marijuana-related offenses from criminal records.
The remaining revenues will then be divided among three groups: public defenders (public defenders), drug addiction treatment, and veterans.
According to the DHSS, since recreational marijuana sales began in February, revenue has already reached $13.8 million.
Since February, the monthly marijuana sales in Missouri has tripled . However, so too has the workload at DHSS.
DHSS has employed 50 full-time staff to oversee the medical marijuana program for the past two decades.
Cox, speaking to The Independent, said that the total number of employees would be just under 170. This includes 23 employees for medical marijuana as well as 148 employees for recreational use.
The lawmakers allocated about 32 million dollars for operating expenses between the medical program and recreational programs. This is a little over double the amount of money that was appropriated in previous years.
Budget documents show that DHSS never used the entire amount of the budget, even though the fund was sufficient to cover the whole amount.
The DHSS was allocated $13.5 million in fiscal 2020 for personal services, equipment, and expenses. The department spent only $6.3 million.
In fiscal year 2020, DHSS received $13.5 million in funding and spent $9.4 millions.
In fiscal year 2020, DHSS received $13.8 million in funding and spent $8.4 millions.
The Department also spent $5 million on employee benefits. These are not included in the DHSS budget but come from a separate section of the state’s budget.
Cox says it has taken time for him to figure out the cost of the program.
She said that it would take two to three years to reach operational stability for both programs, under the new legislation. This will allow us to better match funding with expected expenses.
The lawmakers approved $4.5 million this year for state courts in order to pay overtime to their employees or hire temp workers so that they can complete the massive amount of expungements as required by law. On May 5, they approved an extra $2.5 million as part of a supplemental Budget.
The remaining $1.3 million will be allocated to veterans, public defenders and treatment programs.
As it was last year, 13 million dollars of the medical revenue will be given to the Veterans Commission.
The Missouri Independent first published this story.
The article How Missouri spends its legal marijuana revenue first appeared on Marijuana Moment.
