The Missouri Supreme Court ruled that the state's counties cannot levy a 3% tax on marijuana products sold at dispensaries in cities or towns.
It's a big win for the state's booming marijuana industry, which contended that counties were engaged in an unconstitutional cash grab.
After Missourians legalized marijuana for adult use in 2022, counties across the state started levying a 3 percent tax on dispensaries in incorporated areas. Florissant-based dispensary known as Robust Missouri Dispensary sued over the matter.
A St. Louis County judge ruled that counties could engage in so-called "tax stacking," meaning that cannabis products could have a 3% tax from cities and a 3% tax from counties. But on Tuesday, the Supreme Court ruled 6 to 1 that the counties could only levy the tax on marijuana sold in unincorporated areas.
"The plain language of [the constitution] is unambiguous," wrote Judge Mary Russell. "In an incorporated area, the 'local government' is an incorporated village, town, or city, and, in an unincorporated area, the 'local government' is a county. … Accordingly, [the constitution] authorizes a county to impose a retail sales tax at a dispensary located in an unincorporated area of that county but not at a dispensary located within the boundaries of an incorporated village, town, or city such as Florissant."
Judge Zel Fischer wrote in a dissenting opinion that the constitution allows any local government "to impose an additional sales tax up to three percent on recreational marijuana."
"Because the plain text of the constitution defines a county as a 'local government' in both incorporated and unincorporated areas, St. Louis and St. Charles counties may impose a three percent sales tax on recreational marijuana in the incorporated areas within their borders," Fischer wrote.
Andrew Mullins of MoCannTrade, which represents the state's cannabis industry, said in a statement that the decision could save consumers several million dollars a month.
"Missouri customers already pay their fair share, with sales tax revenue from cannabis in Missouri now tripling original state estimates," Mullins said. "The ruling's clarity preserves Missouri's standing as one of the nation's most impactful and accessible cannabis programs, ensuring patients and adult-use consumers continue to benefit from fair pricing, great service and robust product choice."
Doug Moore, a spokesman for St. Louis County Executive Sam Page, said that the Democratic official was disappointed with the ruling.
"We do not know its immediate financial impact, but if we assume that dispensary distribution is similar to county population, that means 2/3 of the revenue could be lost or $3 million of the $4.5 million the county receives," Moore said.
St. Charles County Executive Steve Ehlmann said in a statement he was disappointed with the decision, but would respect it.
"One thing this shows is how we need to stop putting everything that comes along into the state constitution," Ehlmann says. "Had this been just a regular law passed by voters, then the legislature could have come back and fixed the question of who can do the tax. But instead, we find ourselves bound by a final decision from the Missouri Supreme Court."
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