CLAYTON — A judge has ruled St. Louis and St. Charles counties can add their own tax on the sale of marijuana, on top of municipal pot taxes, rejecting an effort from the industry to keep prices lower.
Counties and their advocates celebrated the decision. Marijuana taxes are another source of revenue for local governments struggling with inflation and deficits, they said.
“This is great news,” said Steve Hobbs, executive director of the Missouri Association of Counties.
The recreational cannabis industry in Missouri has boomed since it became legal in February 2023, generating more than $64 million in tax revenue, 10,000 new jobs and over $1.13 billion in sales.
People are also reading…
Attorneys for the Missouri Cannabis Trade Association said they plan to file an appeal to the judge’s ruling. The association’s executive director, Andrew Mullins, believes customers are being overcharged.
“We know from other states that when legal marijuana is taxed unnecessarily high, it only helps the illicit market, which deprives Missouri veterans and substance abuse programs of needed revenue,” Mullins said in a prepared statement. “As an industry, we are proud to stand up for these customers.”
In April 2023, 65% of St. Louis County voters approved collecting a 3% sales tax on marijuana sales; in St. Charles County, 72% did.
Last fall, a marijuana dispensary in Florissant sued St. Louis County, accusing it of “tax stacking,” or unconstitutionally collecting the tax when Florissant already was. The shop, identified in the suit as Robust Dispensary on Howdershell Road, argued the county is only allowed to collect the levy in unincorporated territory. St. Charles County later joined the suit.
The legal argument centered around how the 2022 constitutional amendment legalizing recreational cannabis defines “local government.”
The dispensary’s attorneys argued the term differentiates between municipalities and unincorporated county territory. Either could impose a tax within its borders, but not both.
St. Louis County Circuit Judge Brian May disagreed.
On April 22, May ruled that the counties are “constitutionally authorized to enact a retail tax” in incorporated areas.
“If plaintiff’s interpretation were accepted, then a municipality or city would essentially be given carte blanche to ignore any county ordinance or regulation, including those related to public health and safety wholly unrelated to the taxing issue,” May wrote.
The decision became publicly available in court records Thursday.
The Municipal League of Metro St. Louis agreed with the judge’s ruling.
“We have stacked taxes all the time,” said executive director Pat Kelly. “There are two different political subdivisions: the municipalities and the counties. That’s very common.”
Greenlight Dispensary CEO John Mueller said he’s disappointed in the judge’s ruling.
“As an industry, we’re obviously highly disappointed in the interpretation of a constitutional amendment that was approved by the people,” Mueller said. “The double taxing of any consumer is ridiculous.”
St. Louis County has received $1.6 million since recreational pot tax revenue distribution started in October, according to Doug Moore, a spokesman for County Executive Sam Page.
“We are pleased that the judge’s ruling supports St. Louis County voters,” Moore said.
St. Charles County Executive Steve Ehlmann said his county expects to receive a little over $1 million in annual revenue from marijuana sales taxes.
“Sounds like Judge May found that the marijuana merchants were one toke over the line,” Ehlmann said.