Missouri retailers sold $350 million worth of legal marijuana products since recreational sales began three months ago

This year, the combined medical and recreational cannabis sales in California will surpass $1 billion.

By Rebecca Rivas, Missouri Independent

Hippos Cannabis’ 40,000-square foot production facility is located in Vienna, Missouri. This town of 600 residents is just 30 minutes from Rolla.

Since Missouri recreational marijuana sales started in February, the company has added 25 employees, bringing their total to 70. These workers are from Vienna and the surrounding areas.

Nicholas Rinella is the CEO of Hippos, which includes three dispensaries in Missouri. “A number of employees were born, raised, and attended high school in Vienna. Now they all work together,” he said. It’s like a community here.

Hippos, like other companies, is expanding its facility where they make pre-rolled joint and jarred cannabis flowers buds. This will allow them to increase production and stock marijuana dispensary shelves.

Rinella stated that “we didn’t know whether Amendment 3 would pass.” When it passed, the industry expected a 2.5-fold increase in sales. It was closer to 5-6 times.

Missouri’s recreational cannabis sales for April totaled $91 million, according to the report released by the state on Friday. This is up from the $71.7 million of February and equal to March’s 93.5 million, for a combined amount of $256 millions in the first three month.

Missouri’s first three months of recreational marijuana sales included medical marijuana sales worth $350 million.

Missouri DHSS.

Cannabis business owners claim that these numbers could even be higher, as Hippos and other cultivators are not working to their full capacity.

Tyler Hannegan is the co-owner, chief of operations, and sales, at Robust Cannabis.

This is partly because any changes made to a cannabis facility must be approved by the state’s regulatory agency, the Missouri Department of Health and Senior Services.

DHSS spokesperson Lisa Cox said that since February, the agency has received over 80 requests to make changes to their facilities, on top of the 40 already pending.

Hannegan, Hannegan’s Missouri Sales Manager, said: “I do not think we have seen the peak yet because there are still cultivation groups which haven’t been online.” “They’ve only expanded but haven’t been approved.”

Missouri’s market is still one of the fastest-growing in the country.

Illinois took seven months after launching adult-use sales, in January 2020, to reach $300 million. Its first year ended at $670 millions. Illinois’s 2022 total was $1.6 billion, two years after it began adult-use sales in January 2020.

Missouri’s April figures of $132 millions are not as impressive as Illinois’, but it will still reach over a Billion in its first year.

Robust Cannabis, which opened its 75,000-square foot greenhouse and manufacturing facility in Cuba, Missouri (an hour south of St. Louis) a year ago, had six employees. They now have 70 employees, many of whom are local residents and grew up in the area.

In the last three months, they have hired 40 new employees.

Emily Braun, Director of Operations and Human Resources at Robust Cannabis, stated that they are still unable to meet the incredible demand of the state.

Braun said, “I’m not sure anyone could have predicted that Missouri would be so flower-frenzied,” referring to cannabis flower buds and prerolled joints. “Nobody is able to keep it on the shelf.”

Braun added that even if all Missouri companies produced at their maximum, he would not be satisfied. It’s insane.”

Turnaround Time

Missouri has begun recreational marijuana sales, three months after the voters’ approval of the constitutional amendment legalizing it in November.

According to a report from Brightfield Group, a cannabis analysis company in Chicago, this was the second-fastest turnaround in the nation, only two weeks behind Arizona’s record.

Several businesses need to expand in order to meet demand and can experience delays.

DHSS will review the construction plans submitted by companies and they can begin work immediately. DHSS will inspect the completed project and, hopefully, approve it.

Cox explained that the processing time of these requests is determined by how quickly an institution can make the changes they seek approval for. “They may even begin construction immediately after making the request,” he said. The DHSS will only approve the application once the expansion has been completed and is ready for inspection.

DHSS received 121 requests in total for February. 39 of those were for cultivation sites, 38 for dispensaries and 36 for manufacturing facilities. Seven were for transportation, while one was for a test facility.

Of the 23, 23 are approved and ready to go. Cox stated that 29 were in the final stages of inspection, and they should be approved within the next two week.

DHSS has inspected five of the 64 spaces that have been constructed, but is still waiting for the completion of construction on 64 more to conduct an inspection.

Like the cannabis companies themselves DHSS also hires new employees to keep up with the market’s growth.

Cox stated that “DHSS has begun hiring a significant number of new employees to deal with the increased workload that comes along with the new laws.” The Division of Cannabis Regulation has completed about 30% of their hiring plan, and they expect to have a fully-staffed division by the end of this year.

Conversations about value

Rinella says that the industry is experiencing some price increases due to the high demand. He said that it is important to keep in mind that an eighth of flower, the most popular product sold at dispensaries two years ago was $60.

At one point the price dropped as low as $25.

He said, “Right away it’s really just starting to stabilise.” The average price at Hippos is $40-$45.

He said that about 25 years ago, an eighth of a dollar was worth $50 on the illegal market.

He said, “It is actually cheaper to buy at a dispensary today and the quality is higher.” You know the product is safe and has been tested.

Hannegan said that he has seen an increase in Prices in Missouri.

He said, “This is really a testament to the fact that some dispensaries don’t have enough flower products.”

The yields of Robust, and other places are “phenomenally high”, which helps to keep the prices stable.

He said that some have had difficulty adapting recreational products and rushing the process, causing supply problems.

Jason Nelson, owner of Swade dispensaries, and Sinse Cannabis cultivation said that it is important to keep prices stable while Missouri’s marijuana market attempts to stabilize.

Nelson stated that customers can easily return to their previous dealers.

He has constant conversations with his customers about the benefits of buying products from a dispensary as opposed to their off-market sellers who may not know if they contain pesticides, heavy materials and other contaminants.

Nelson is in the lead if prices remain stable. Nelson said that if prices spiked, he would lose out, especially during “these times of high inflation”.

He said that the value conversation could not exist if it exceeded a 15 to 20 percent over the illegal market price. “While it may ultimately reduce top-line revenue, if overpricing and taking a short term gain on top-line revenue, you are going to risk losing this conversation.”

He has seen how the “large multistate operators” have taken the top-line approach to revenue and lost a large segment of their clients who returned to their old dealers.

He said, “We as responsible operators and comprehensive in Missouri have to manage this successfully.” “And I believe we’re ready to do it,” he said.

This article was originally published by Missouri Independent.