A Missouri House committee on Thursday narrowly approved a GOP-led bill to tax and regulate adult-use marijuana in the state.
The legislation from Rep. Ron Hicks (R), titled the “Cannabis Freedom Act,” cleared the House Public Safety Committee in a 5-4 vote, with amendments. It now heads to the Rules Committee before it could potentially advance to the floor.
Beside legalizing possession and sale of cannabis, the bill would further provide opportunities for expungements, authorize social consumption facilities and permit cannabis businesses to claim tax deductions with the state.
While advocates had hoped that the panel would advance the bill without revisions, members ultimately adopted three amendments.
The changes concern licensing caps, regulatory authority over the cannabis market and a proposal described by one lobbyist as a “poison pill” that imposes restrictions on who would qualify for equity benefits.
Hicks told Marijuana Moment in a phone interview on Thursday that he’s “disappointed” by the committee amendments, particularly a change pushed by Rep. Nick Schroer (R) that the sponsor said represents a “poison pill” that’s already causing cosponsors of the original bill to pull back.
The revision unnecessarily plays into partisan divides over rights for transgender people, Hicks said. And while he’s frustrated by its adoption, he stressed that he understands why it would cause some cosponsors to balk and he doesn’t “hold it against them.”
“This [legalization bill] is really important for Missourians—their voice needs to be heard,” he said, adding that he feels those voices would not be effectively heard if the reform is decided at the ballot instead, as some activists are pushing for.
“I want the legislature to be able to handle it so that when there are problems and things need to be changed, it can be changed,” he said. “We need to be able to grow as [the industry] grows. This market can grow to billions of dollars. I want to see that the state grows with it. I don’t want to put in a box.”
Advocates are gearing up to push back against the unfavorable revisions as the legislation advances to the floor, which could happen within weeks.
“I look forward to having the full House of Representatives debate this bill,” Eapen Thampy, a lobbyist with Great State Strategies, told Marijuana Moment. “Missouri has a chance to get this right—and we will we will fight to ensure that we pass a good bill that is free of of corruption.”
Here’s what the cannabis legislation would accomplish, as amended:
Possession, home cultivation and licensing
The bill would allow adults 21 and older to purchase and possess cannabis from licensed retailers. There doesn’t seem to be a possession limit in the measure; it simply does away with existing statutes criminalizing the activity. Adults could also cultivate up to 12 plants for personal use.
The Missouri Department of Health and Human Services would be responsible for regulating the adult-use program, just as it currently does for medical cannabis. Before being amended in committee on Thursday, the Department of Agriculture, which handles hemp, would have had that regulatory authority.
The department would be required to develop rules to issue temporary and annual licenses for cannabis retailers, growers, processors, transporters and wholesale distributors.
As drafted, there would not have been any cap on the number of licensees that could be approved. But members adopted an amendment to allow double the number of current medical cannabis licensees in the state in order to serve the adult-use market.
Interestingly, the legislation also says that adults could “contract” with a licensed grower to cultivate up to 12 plants on their behalf for personal use and also work with licensed processors to produce marijuana products.
Social equity and consumer protections
Additionally, the measure contains expungement provisions, allowing people with non-violent marijuana convictions over activities made legal under the bill to petition the courts for record clearing. Those currently incarcerated would also be eligible for resentencing, and those on probation or parole would be allowed to use marijuana.
Police would not be allowed to use the odor of marijuana alone to conduct a warrantless search of a person’s private property under the legislation. And cannabis could not be used “as a factor in family court proceedings.”
The bill further stipulates that medical cannabis patient information cannot be shared with federal authorities.
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As part of the licensing amendment that was adopted in committee on Thursday, language was added to create a loan program to support women- and minority-owned businesses participate in the market. However, a GOP member got a change attached that could undermine Democratic support because it controversially revised the equity provisions to specify that only women who are “biologically” female would be eligible for the benefit.
Taxation, banking and social use
The state Department of Revenue would set a tax rate for adult-use marijuana sales that could not exceed 12 percent. There would be no such tax on medical cannabis products.
Tax dollars that the state generates from the recreational market would be deposited into a “Cannabis Freedom Fund,” with revenue first covering the administrative costs of implementing the marijuana program. Remaining revenue would be “divided equally between teachers’ salaries, first responders’ pensions, and the Missouri veterans commission.”
Licensed marijuana businesses would also be able to make tax deductions with the state up to the amount that they’d otherwise be eligible for under federal law if they were operating in a federally legal industry. Cannabis companies across the country are required to pay federal taxes, but they’re barred from receiving tax benefits.
People who apply for a Missouri cannabis business licenses and pay the application fee could also deduct that cost if they’re ultimately denied licensing.
Hicks’s bill also adopts a provision from a separate cannabis bill that would allow for “hospitality permits” so that hotels, bars and restaurants could “sell and serve marijuana or marijuana products in private events or venues.”
Proud to meet with former Missouri State Representative & Judge Chris Kelly and my current colleague in the House Bill Hardwick about my Cannabis Freedom Act. Chris has a great passion for justice and led the way on legalization during his tenure as an elected #moleg pic.twitter.com/ncLdWhzV5B
— Ron Hicks (@RNHCKS) March 29, 2022
Restrictions and room for improvement
Hicks stressed in an earlier cosponsorship memo to colleagues that his omnibus bill as drafted was “not perfect,” and he urged lawmakers’ “continued input as we move through the legislative process.”
The lawmaker also specifically noted that he’s working with members of the Black Caucus “to further ensure that startups in this market space can access loan and grant programs to ensure that entrepreneurs can compete on an equal playing field.”
Meanwhile, another Missouri Republican lawmaker is again making a push to place cannabis legalization on the ballot. But some activists aren’t waiting on the legislature to take action to refer the issue to voters, with one campaign officially launching signature gathering last month for a separate reform initiative.
Under that plan, adults 21 and older could purchase, possess and cultivate cannabis for personal use. It also does not specify allowable amounts.
Another Republican lawmaker in the state, Rep. Jason Chipman (R), filed a joint resolution this month that would let voters require additional oversight over how medical cannabis tax revenue is distributed to veterans.
Separately, the group New Approach Missouri, which successfully got a medical cannabis initiative passed by voters in 2018, announced last summer its plans to put the reform proposal on the ballot through its new campaign committee Legal Missouri 2022.
The organization tried to place the issue of legalization before voters in 2020, but the COVID-19 pandemic derailed that effort.
Despite the health crisis, activists managed to collect 80,000 raw signatures within months, though they needed 160,199 valid signatures to qualify.
A different campaign, Fair Access Missouri, is separately exploring multiple citizen initiatives with the hopes of getting at least one on the ballot next year. Three of the four would create a system of legalized cannabis sales for adults 21 and older, while another would simply amend the state’s existing medical marijuana program.
Another state lawmaker filed a bill late last month to decriminalize a range of drugs including marijuana, psilocybin, LSD, MDMA and cocaine.
The measure’s introduction came after a Republican Missouri legislator filed a separate bill to give residents with serious illnesses legal access to a range of psychedelic drugs like psilocybin, ibogaine and LSD through an expanded version of the state’s existing right-to-try law.
Additionally, a Missouri House committee held a hearing last week on a GOP-led bill to legalize a wide range of psychedelics for therapeutic use at designated care facilities while further decriminalizing low-level possession in general.
Nearly one out of every 10 jobs that were created in Missouri last year came from the state’s medical marijuana industry, according to an analysis of state labor data that was released by a trade group earlier this month.
Separately, there’s some legislative drama playing out in the state over a proposal that advocates say would restrict their ability to place Constitutional amendments on the ballot.
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