For most states that legalized either recreational or medical cannabis, earning tax revenue wasn’t the endgame. Although sales tax wouldn’t hurt, especially now that the coronavirus pandemic has drastically affected the economy, plenty of states pledged to use some of the tax revenue derived from cannabis sales to fund social justice initiatives like health programs for military veterans. Missouri was among them, and although medical cannabis sales are slated to start later this month, the Show-Me State recently completed the first-ever transfer of cannabis revenue to a state’s veteran fund.
More than $2.1 million was transferred from the Department of Health and Senior Services (“DHSS”) to the Missouri Veterans Commission (“MVC”) where it will be used to fund health services for military veterans. The money was sourced from the millions of dollars already collected from license and registration fees from businesses and patients. As soon as medical cannabis dispensaries open later this month, a 4% tax will be levied on sales.
“Facilities are up and running now, and the first testing laboratory is on track to be operational very soon. We are confident that medical marijuana will become available for patients this month, and I am grateful for all the hard work by so many that got us to this point,” says Lyndall Fraker, director of DHSS’s medical marijuana regulation section. According to the DHSS, a “formal presentation of this significant transfer of funds is being planned in the near future.”
“Missourians voted on this amendment because it allowed for a safe and well-regulated medical marijuana program for patients, but it also was written to simultaneously benefit our very deserving veterans through services MVC will now be able to provide,” says DHSS Director Randall Williams, referring to a provision in the state’s medical marijuana law passed by voters in 2018 which routes all state cannabis revenue after expenses to the veterans’ commission.
However, while the $2,135, 510 sent to the Military Veterans Commission is quite a hefty sum, it’s a tiny fraction of the total funds the state raised from cannabis revenue. State law requires that tax revenue is first used to pay operational costs and Missouri spent quite a sum to pay off operational expenses last year. The state’s licensing program for medical cannabis businesses came under fire last year, with Missouri spending $1.3 million defending itself against legal challenges from applicants whose applications for a medical cannabis license were denied.
The Post-Dispatch Report notes that the state medical marijuana program had generated $19 million as of this past November, “meaning the state spent nearly 7 percent of fees collected last year on legal expenses.” The program also spent $3.1 million on administrative fees. According to State Rep. Peter Merideth, the state’s opaque licensing process and arbitrary cap on the number of licenses available undercut the program’s economic promise.
“There are businesses across our state ready to get off the ground, and the government’s getting in the way and stopping them from doing it. Instead of raising money from this whole business development in our state, we’re spending that money to pay lawyers and fight businesses from opening.”
All the same, the fact that millions have been sent to the veterans’ health programs is seen by experts as satisfying to sector companies like Pure Extract Technologies Inc. who strongly believe that the industry benefits all sections of society.
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