(The Center Square) – Missouri medical marijuana sales topped $16.5 million in June, $1 million more than the previous month, and could top $200 million by year’s end, according to the state’s Department of Health & Senior Services (DHSS).
But the growing number of Missouri businesses in the medical marijuana industry, which employ nearly 4,000 statewide, won’t be able to deduct expenses on state tax returns like other businesses.
Gov. Mike Parson’s veto of a massive tax omnibus bill not only nixed a pandemic property tax refund but killed a measure allowing Missouri marijuana industry operators to claim expenses on their state income tax filings.
The governor rejected Senate Bill 226 primarily over objections to allowing owners of businesses forced to shut down by local pandemic restrictions to claim a property tax refund based on how many months the restrictions were in place.
“This is a significant departure from the current tax structure in Missouri and could severely undermine the ability of cities and counties to provide local services,” Parson wrote in his two-page veto letter.
But Parson didn’t stipulate in his letter any objection to the provision providing tax relief for the state’s burgeoning medical marijuana industry.
Missourians legalized medical marijuana in 2018 when more than 66% of voters approved Amendment 2.
Under the program, patients who have approval from physicians can receive identification cards from the state that will allow them and their registered caregivers to grow up to six marijuana plants and purchase at least 4 ounces of cannabis from dispensaries each month.
Missouri’s program allows doctors to recommend medical cannabis for any condition and imposes an additional 4% sales tax on cannabis sales with revenues earmarked for veterans’ services.
According to DHSS, through June 21, 145,014 Missourians have filed applications for medical marijuana ID cards with more than 125,000 granted. The number of granted ID cards first topped 100,000 in May.
DHSS reports it has received 4,944 caregiver applications, 27,790 patient cultivator applications and 2,811 caregiver cultivator applications.
The department also offers a county-by-county breakdown of patient/caregiver medical marijuana applications with Jackson and St. Louis counties leading the way with between 12,000 and 15,000 patients each.
As of July 9, the number of active licensed/certified facilities that operate as medical marijuana dispensaries in the state was 377.
But under federal law, growing, transporting or selling marijuana remains a crime. Therefore, marijuana businesses cannot deduct expenses from federal tax returns but states are rapidly adopting laws to allow them to do so in state filings – as Missouri lawmakers did in SB 226.
Lifting the prohibition enjoyed overwhelming bipartisan support during the session with the provision endorsed near unanimously in both chambers.
Testimony during the session from proponents and marijuana industry executives noted Missouri businesses attempting to get into the expanding market face an “effective tax rate” of at least 70%.
MoCannTrade, which represents about 300 Missouri marijuana businesses, lamented the veto, noting it was “both common sense and smart public policy to put medical cannabis businesses on a level playing field with all others that pay state business taxes.”
“While disappointed in the veto, we remain encouraged by the overwhelming bipartisan support for a measure of basic tax fairness that received near-unanimous votes in both the state House and Senate,” MoCann Executive Director Andrew Mullins said in a statement.
“As our state’s newest industry continues to create thousands of new jobs and generate tens of millions in new spending each month,” Mullins added, “we look forward to again passing this policy change and seeing it signed into law.”
Originally Appeared Here