Missouri’s recreational marijuana industry has been at the center of a legal battle for the last couple of years, now as the Missouri Supreme Court prepares to rule on whether cities and counties can impose overlapping sales taxes on cannabis. At first glance, this may appear to be a technical issue about local tax codes, but the implications run far deeper. For dispensaries, customers, and municipalities, this decision has the potential to alter the course of Missouri’s cannabis economy.

More importantly, it forces us to confront the larger question about fairness in the taxation of cannabis. Why has marijuana, a once-taboo substance, become a cash cow for cities and counties aiming to offset budget deficits? The stacking of taxes is not a standard seen in other industries, yet cannabis finds itself uniquely burdened.

Cannabis Taxation in Missouri

The legal fight began with Robust Missouri Cannabis, a dispensary in the city of Florissant. Currently, Florissant residents buying recreational marijuana are charged almost 21% in sales tax. This colossal tax rate comes from layering a 6% statewide marijuana tax with an additional 3% each from the city of Florissant and St. Louis County.

According to data from the Missouri Department of Revenue, more than 70 municipalities and counties across the state are stacking taxes in a similar manner, according to a recent article by the Missouri Independent. Robust Cannabis contends that imposing taxes from both city and county levels violates Missouri’s constitutional amendment for recreational marijuana, which voters approved in 2022. At the heart of this issue is whether “local government” means a city or a county—but not both together.

Missouri dispensaries like Robust argue that this interpretation was both intended by the amendment and necessary to ensure a fair taxation environment. This stacked taxation eats into dispensaries’ competitiveness while adding an undue financial burden to customers.

If the Supreme Court determines that cities and counties cannot both impose taxes on cannabis sales, it could lead to a major change in revenue distribution. St. Charles County, for example, estimates it could lose at least $2.4 million annually if it can no longer collect a local marijuana tax.

Local government officials argue that cannabis taxes help support public health initiatives, local ordinances, and community programs. But does this justify charging higher cumulative taxes in the cannabis sector compared to other industries?

That’s a important question because, no matter how you slice it, singling out cannabis as a revenue generator feels less like fiscal responsibility and more like exploitation.

Marijuana Taxes Are Overloaded

No other industry in Missouri is subjected to this kind of tax layering. Alcohol, tobacco, and other regulated substances don’t face the same stacked tax model. This disproportionate treatment creates the perception that cannabis legalization was less about personal freedoms or public health and more about generating revenue.

Cannabis users have already become used to higher taxes compared to what they would expect for alcohol or groceries. But layering municipal and county taxes crosses into seems like an overreach. For example, anti-cannabis sentiment years ago centered around preventing social harm. Ironically, today’s push for tax revenue appears to completely sidestep any of that, while targeting the industry as a budgetary Band-Aid.

Customers, especially those who are lower-income, feel this the most. By tacking on multiple fees, governments make it difficult for consumers to afford legal marijuana. This pricing disparity often drives users back to the illicit market, a trend we’ve seen in legal states across the country.

An Unfair Playing Field

The taxation of recreational cannabis highlights a disturbing double standard. When other industries receive tax incentives or streamlined tax codes to encourage growth, cannabis businesses wrestle with conflicting regulations and overlapping tax structures.

Critically, small-business dispensary owners bear the brunt of this tax burden. They can’t simply absorb these costs without passing them directly to consumers, and higher prices make it harder to compete with untaxed, illegal marijuana sales. The result is an unfair playing field where businesses feel penalized for trying to follow the law.

Additionally, municipalities argue that cannabis taxes help fund public health initiatives. But in many cases, organizations have not transparently allocated these funds to ensure they truly support the stated causes.

It’s time to reassess cannabis taxation—not as a special exception, but as a legitimate industry that contributes to the economy. A single-layer tax system at the state level or local level, rather than both, would ensure fairness while still providing critical revenue for public programs.

Alternatively, some experts recommend enabling caps on marijuana tax rates to ensure they don’t soar to untenable levels. This approach would mirror guidelines seen in industries like alcohol, ensuring that cannabis taxation remains proportional.

Governments need to recognize that burdening an industry with heavy taxes stifles its growth, limits its competitive edge, and ultimately damages their long-term tax revenue potential.

The Decision Ahead For Missouri Cannabis Taxes

The Missouri Supreme Court’s upcoming decision by the end of the month will likely set a precedent extending beyond this particular lawsuit. A ruling in favor of dispensaries may compel other states to rethink their cannabis taxation policies. On the other hand, if cities and counties continue stacking taxes, it could justify higher cannabis taxes in neighboring states.

Ultimately, the issue comes down to fairness. Missouri voters approved recreational cannabis use with the expectation of balance—not to see the industry turned into a piggy bank for budget shortfalls.

For Missouri’s cannabis consumers and dispensary owners, relief may come in the form of legislation or judicial interpretation. Until then, the cannabis industry remains trapped under the financial weight of a policy that unfairly singles it out.