Missouri’s Supreme Court has ruled that counties and cities cannot each apply a separate sales tax on recreational cannabis.
The court stated that under the constitutional amendment passed in 2022, only one local authority may collect a 3% sales tax on cannabis. The local authority can either be a city, town, or village in an incorporated area or a county in unincorporated regions—not both.
The justices pointed out that the amendment’s language ties the term “local government” to the location of the dispensary. That means if a cannabis store is inside a city’s limits, only that city can apply the 3% tax, not the county too.
The decision was based on a case involving Robust Missouri 3 LLC, a dispensary located in Florissant. Customers were being taxed nearly 21%, including 3% from both St. Louis County and Florissant. The court’s ruling invalidates the county’s tax in this situation and affects more than 70 other locations across Missouri where both city and county governments have been collecting a marijuana sales tax.
Judge Zel Fischer disagreed with the majority, arguing that the amendment allows for both cities and counties to apply the tax—even within incorporated areas. He wrote that interpreting “and” to mean “or” leads to an unreasonable outcome and ignores the plain wording of the law. In his view, counties should be allowed to collect taxes within their borders, whether incorporated or not.
Previously, a Missouri appeals court sided with the dispensary, stating that the amendment’s language is clear and doesn’t allow for double taxation by both city and county governments. That decision overturned an earlier ruling that had permitted both levels of government to impose their own taxes on cannabis.
The Supreme Court’s decision also settles a related case, which had been on hold until this ruling. That case involved a Buchanan County judge who had ruled in favor of stacked taxes as well.
Andrew Mullins, who leads the Missouri Cannabis Trade Association, praised the ruling. He said the group filed the legal challenge shortly after dual taxes started appearing in 2023, aiming to defend consumers from unnecessary costs. Mullins estimated that the decision will save buyers around $3 million each month.
He added that cannabis customers in Missouri are already contributing significantly through taxes and that the ruling helps keep prices reasonable while maintaining the program’s strong reputation for quality and access.
As unnecessary double taxes are halted, the marijuana industry could deepen its reach and create opportunities for more entrepreneurs, such as those starting businesses similar to Innovative Industrial Properties Inc. (NYSE: IIPR) that serve cannabis firms without directly engaging in trading marijuana products.
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