Trio of economic research firms vying to study health of Missouri’s cannabis industry

A trio of research firms who contend Missouri is a poster child for success in the cannabis industry hope to win a contract to study the state’s market closer.

“As it relates to cannabis markets, Missouri is pretty famously the model to follow,” said Mackenzie Slade, CEO and owner of New York-based Cannabis Public Policy Consulting. “So I’m very interested in doing a super deep dive.”

In March, the state issued a request for proposals looking for a vendor to conduct a cannabis market and economic impact study. Currently, Missouri has issued nearly 400 cannabis licenses to operate full-scale cultivation and manufacturing facilities and dispensaries. The state will also eventually have 144 microbusiness licenses, which are limited in size and scope and meant to benefit disadvantaged business owners.

In 2024, Missouri sold $1.46 billion in total marijuana sales in the state’s second year of adult-use marijuana, outperforming states with a longer history of marijuana legalization like Arizona, Colorado and Nevada.

The results of the study will help the state determine “whether or when the state will be required to issue additional cannabis facility licenses and, if so, how many, where, and of what type,” according to a March press release from the Missouri Department of Health and Senior Services.

Missouri received three responses that fit the requirements of having at least five years of experience specializing in the economic impact of marijuana, or at least 10 years of experience conducting economic impact studies in general.

The responding agencies were Slade’s firm, St. Louis-based Capital Consulting Services and Oregon-based Whitney Economics. The firm that wins the bid will be awarded the contract.

Beau Whitney’s company, which conducts studies globally, gathers data monthly on the cannabis industry for each legal state on business licenses, supply capacity and revenues.

Whitney calls Missouri a “success story.” In one of his recent reports that looked at investment potential nationwide, he found there’s still opportunities for growth, development and investment into the Missouri market.

That’s because there’s too much supply, an over saturation of licenses and prices are so low that people can’t make any profit, he said.

“My goal with Missouri is to give them the data that they need to avoid that scenario,” Whitney said.

Slade has seen the same in New York, where her firm has been based for about seven years.

Her company administers a national survey on cannabis use, which essentially measures and quantifies demand behavior for consumers. One of the things that they use it for, she said, at a national level is to try to understand how states are performing based on their policies.

“And Missouri continuously outperforms other states, relative to their date of sale,” she said. “…because they were able to stand up a market so quickly.”

That was in part because Missouri limited the number of licenses to get operational within just a few months. For the study, Slade proposed to use the state’s track and trace data to identify the efficiencies of the licenses.

“That’s a prime example of where we would uncover some extremely important considerations for policy,” she said.

Tracey Jeffries’ company, Capital Consulting Services, has helped governments with economic feasibility studies for 15 years on a state and federal level, and she’s a certified Missouri minority-owned business enterprise as a Black woman owner. According to state policy, winners of any state contract must employ 10 percent minority-owned and 5 percent women-owned businesses.

State law says the cannabis regulators may “lift or ease any limit on the number of [cannabis] licensees or certificate holders in order to meet the demand for marijuana in the state and to ensure a competitive market while also preventing an over-concentration of marijuana facilities within the boundaries of any particular local government.”

Experts generally agree that Missouri’s decision to only issue the minimum licenses allowed under its constitution has been the key to the industry’s boom. However, critics have long argued the decision created a monopoly that’s kept out opportunities for people who were most impacted by the War on Drugs. While the microbusiness license program was included in the 2022 constitutional amendment to address inequities, the limitations on what these businesses can do make it difficult to turn a profit.

Jeremy Washington, spokesman for the Office of Administration, the agency that handles contracting for the state, said there isn’t a “published schedule for the completion of the evaluation process.”

However, upon completion of the evaluation process, the MissouriBUYS Bid Board will be updated to reflect the changed status. In addition, the entire procurement file will be published on the Division of Purchasing’s awarded bid and contract document site.

The Missouri Independent, www.missouriindependent.com, is a nonprofit, nonpartisan news organization covering state government and its impact on Missourians.