How to Open a Dispensary in Missouri

How to Open a Dispensary in Missouri in 2024

The application window for a cannabis dispensary license is currently closed in Missouri. However, a new window is expected to open in June 2024. To open a dispensary in the state, you must obtain a microbusiness dispensary facility license. However, if you are an existing medical marijuana dispensary, you can petition the Division of Cannabis Regulation to convert your existing license to a comprehensive marijuana dispensary facility license. If you have either of these licenses, you can sell medical and adult-use cannabis in the state.

Why Open a Dispensary in Missouri?

Legal cannabis sales have skyrocketed in Missouri since adult-use cannabis sales began in the state after voters' approval of recreational cannabis in November 2022. Although only a handful of existing medical marijuana dispensaries were able to convert their licenses to comprehensive cannabis licenses, allowing for recreational cannabis sales, the cannabis sector still experienced massive growth. According to the Division of Cannabis Regulations, Missouri crossed the $1 billion mark in legal sales in May 2023. In the first 3 months following the start of recreational cannabis sales, Missouri recorded over $256 million in adult-use cannabis sales and $94 million in medical marijuana sales.

With Missouri residency not required, and small businesses allowed to obtain microbusiness licenses to set up dispensaries, barriers to entering the Missouri cannabis sector are now lower than before.

Types of Dispensary Licenses in Missouri

Missouri issues two types of licenses to operate cannabis dispensaries in the state. To open a marijuana store in a Missouri location, you must have either of the following licenses:

• Microbusiness cannabis dispensary facility license: A microbusiness dispensary facility license is a licensed microbusiness facility where marijuana is sold for medical and adult-use purposes. This license is issued to applicants with a net worth not exceeding $250,000 or veterans with a service-connected disability
• Comprehensive cannabis facility license: This license allows licensees to sell cannabis to medical and adult-use consumers. However, while the microbusiness dispensary license is issued to small businesses, the comprehensive license will be issued to larger businesses in the future. Currently, medical dispensary facilities are allowed to convert their licenses to comprehensive facility licenses in order to be able to sell adult-use marijuana to consumers.

For more information on converting a medical license to a comprehensive license, see the facility-conversion page of the Missouri Department of Health and Senior Services website

How to Get a Missouri Dispensary License

The Missouri Division of Cannabis Regulation (DCR) opened a 15-day application window for microbusiness license applications between July 27 and August 10, 2023. During this period, the DCR received microbusiness dispensary facility license applications via its web-based application system and issued 2 microbusiness dispensary licenses in each of the 8 congressional districts in the state in a drawn lottery.

However, should the next application window require the same or similar application process, it is recommended that you familiarize yourself with the current application requirements and process.

To apply for a microbusiness dispensary facility license, the business must be majority-owned by individuals who meet at least one of the following requirements:

• Have a net worth below $250,000 and an income below 250% of the federal poverty level or a successor level, as outlined in the applicable year's federal poverty income guidelines announced by the United States Department of Health and Human Services or its successor agency, for a minimum of three of the past 10 years prior to applying
• Possess a valid service-connected disability card issued by the United States Department of Veterans Affairs or a successor agency
• Be an individual who has been arrested, prosecuted, or convicted of a non-violent marijuana offense for at least 1 year, except for cases involving conviction for involvement in providing marijuana to a minor or driving under the influence of marijuana
• Live in a census tract area or ZIP code meeting one of the following criteria:
• Where 30% or more of the residents live below the federal poverty level
• Where the rate of unemployment is 50% higher than the state average
• Where the historical rate of incarceration for marijuana-related crimes is 50% higher than the state average
• Have graduated from an unaccredited school district or a district with a similar successor designation at the time of graduation, or have lived in a ZIP code containing an unaccredited school district or similar successor designation for three of the past 5 years

Note that Missouri residency is not required to apply for a microbusiness dispensary facility license.

For more information on the previous application process, see the cannabis licensing application process page on the DHSS website. The next application window for microbusiness dispensary facility license application is expected to open in June 2024. To stay abreast of information concerning the potential licensing application window, prospective applicants are advised to check the DHSS website frequently.

Information and Documents Required for a Dispensary License in Missouri

As per the July-August 2023 application window, the following information and documents were required of microbusiness dispensary facility applicants:

• Designated contact information (includes full name, email address, phone number, and physical address). A designated contact is the applicant’s authorized point of contact for all Department communication regarding the application
• Applicant information (includes legal name, tax ID (SSN or EIN), trade or fictitious name, phone number, and email address)
• Facility location information (includes congressional district, GPS coordinates, mailing address, house district, zip code, and physical address)
• Ownership information (includes full name, date of birth, ownership percentage, voting interest, social security number, email address, residential address, and city of residence)
• A visual representation of the applicant's ownership structure, including all entities (and individuals) listed in the ownership section of the application.
• If applicable, a copy of the local government requirement that replaces the department's 1000-foot rule. If the proposed license location is within 1,000 feet of any existing elementary or secondary school, daycare, or church, the applicant must provide copies of local ordinances expressly allowing a marijuana license to be sited within 1,000 of those locations at the time of application per 19 CSR 100-1.100(1)(C)
• If applicable, a copy of, and a hyperlink to, local government requirements. If the local government (city, town, municipality, township, or county) has enacted any requirements applicable to the proposed license's facility location, such as zoning restrictions, the applicant must provide a copy of and a hyperlink to all local government requirements for the proposed license's facility location
• Proposed blueprints that outline the entire facility, featuring all rooms and areas clearly labeled, including their purpose and square footage, camera locations, and limited access areas
• Documentation for individuals claiming majority ownership to demonstrate eligibility criteria. Individuals claiming majority ownership in a micro business application must provide documents demonstrating they meet at least one of the eligibility criteria required for microbusiness ownership in 19 CSR 100-1.190(1)(B)
• A valid (non-expired) government-issued photo ID

Note the DCR also requires certain documentation to support the applicant’s eligibility to obtain a microbusiness dispensary facility license. The requirements are listed on the cannabis license eligibility page of the DCR website.

What Plans Do You Need to Open a Dispensary in Missouri?

A site plan and a business plan are two key plans required for microbusiness dispensary license applicants. A site plan must include schematic diagrams for all entries, exits, customer service areas, camera locations, and limited entry areas. A business plan should include sections such as competitive analysis, sales strategy, marketing plan, financial plan, operations plan, and timelines and milestones for your objectives.

Are There Municipal Requirements for Opening a Cannabis Dispensary in Missouri?

Yes. Missouri municipalities have varying requirements for persons seeking to establish marijuana retail stores within their borders. Typically, you must register with the municipality, obtain a local business permit or license, and receive approval for locating your business in an appropriate zoning district. However, for specific municipality requirements, speak with local government authorities in the area where you plan to open a cannabis store.

How Long Does It Take to Get a Missouri Dispensary License?

The Missouri DCR issued microbusiness licenses to applicants on October 2, 2023, following the closure of the license application window on August 10, 2023. Therefore, it may take up to 10 weeks for prospective licensees to be awarded their microbusiness dispensary facility licenses after submitting their applications.

Where Can You Locate a Cannabis Dispensary in Missouri?

There are local regulations regarding where cannabis dispensaries may be established in Missouri municipalities. However, unless expressly permitted by a local government, a cannabis dispensary cannot be located within 1,000 feet of a school, daycare center, or church.

Individual counties and cities have the authority to establish their zoning requirements and setback distances, including the option to reduce the state-stipulated setbacks from sensitive locations.

Can Licensees Have More Than One Dispensary Location in Missouri?

A Missouri cannabis dispensary can have multiple locations in the state.

How Much Does It Cost to Open a Marijuana Dispensary in Missouri?

To obtain a microbusiness dispensary facility license, you must pay an application fee of $1,500. If the application is successful, you will pay a licensing fee of $1,500 annually for the dispensary license. If your application is unsuccessful, you are eligible to get a refund for the application fee.

However, there are other estimated costs associated with opening and operating a cannabis dispensary, such as:

• Startup costs: $30,000 - $350,000 (includes costs related to business incorporation, lease, equipment, legal, inventory, and marketing costs)
• Monthly operating costs: $20,000 - $100,000 (includes costs related to salaries, security, inventory, and marketing costs)

Do You Need an Insurance Policy for a Cannabis Dispensary in Missouri?

Although there are currently no mandated cannabis insurance policies for marijuana dispensaries, it is recommended that you acquire some policies to cover a variety of potential dangers that your business may encounter in the course of operations. Some of the recommended insurance policies are:

• Workers' Compensation Insurance: This insurance is a Missouri-mandated policy for all employers, offering benefits to workers injured in the course of dispensary operations to cover medical care, a portion of lost wages, and permanent disability. In return, the dispensary business receives immunity from civil lawsuits by employees over workplace injuries
• General Liability Insurance: This provides protection against a broad spectrum of common risks and liabilities from third-party claims involving bodily injury, property damage, or personal injury
• Product Liability Insurance: This insurance protects a cannabis dispensary against claims related to injuries or damages caused by products sold in the store, including medical bills, legal fees, and potential settlements
• Property Liability Insurance: This policy safeguards your dispensary's physical assets, including the building, inventory, equipment, and furnishings, against various risks such as fire, theft, vandalism, and natural disasters

How to Get a Grant to Open a Dispensary in Missouri

Financing a cannabis dispensary is expensive as it requires a lot of funds. Typically, you may require a grant or loan to start operations. You can access a loan to initiate your cannabis dispensary operations using one of the following means:

• Crowdfunding: Crowdfunding platforms allow you to run campaigns to attract donations from members of the public. Rewards-based crowdfunding offers donators non-equity rewards, while equity crowdfunding allows investors to claim a stake in your business
• Equity Funding: Private equity investors focused on the cannabis industry can provide substantial funding for your dispensary startup. They often seek equity in your business in exchange for their investment
• Family and Friends: You can raise capital for your dispensary by approaching family members or close friends who may be willing to invest in your dispensary
• Personal Savings: Using your personal savings can provide an initial injection of capital to cover startup costs
• Cannabis-Specific Lenders: Some lenders who specialize in the cannabis industry have a deep understanding of the industry's unique challenges and opportunities. Such lenders are often willing to finance dispensaries but may have stricter eligibility criteria and higher interest rates

Does Missouri Have a Social Equity Program for Cannabis Dispensaries?

Missouri does not have an official social equity program for cannabis dispensaries. However, the state's microbusiness license category lowers the barrier to entry into the state's cannabis industry for individuals who have been disproportionately impacted by the criminalization of marijuana. The microbusiness dispensary facility license is designed to provide a path to cannabis dispensary ownership for minority individuals who may not otherwise easily access that opportunity.

The microbusiness dispensary facility license is only open to applicants who meet one of the criteria outlined by the Department of Health and Senior Services. The criteria include having an arrest history or a family member arrested for a non-violent offense related to cannabis or living in a zip code with a historic incarceration rate for marijuana-related offenses 50% higher than the state average rate.

Does Missouri Tax Marijuana Dispensaries?

Missouri law requires marijuana dispensaries to include a 4% tax on medical marijuana sales and a 6% tax on recreational marijuana sales. However, municipalities are permitted to charge up to an additional 3% tax on recreational cannabis sales. The state-imposed taxes on cannabis are remitted to the Missouri Department of Revenue.