Cities such as Columbia, Jefferson City studying uses for recreational marijuana taxes

COLUMBIA, Mo. (KMIZ)

Recreational marijuana sales began in early February in Missouri but after April they could become more expensive for some Mid-Missouri consumers.

Many Mid-Missouri cities have added a sales tax on recreational marijuana to the April ballot. Plenty of revenue is generated by sales of the drug -- Missouri brought in more than $14 million from medical sales in 2022 -- and local governments are getting in on the game.

Jefferson City and Columbia voters will decide whether a 3% tax will be added to the recreational sale of marijuana.

City of Columbia spokeswoman Sydney Olsen said if the tax is passed the revenue will be added to the city's general fund and will be used to fill gaps in funding.

Columbia is predicting that the revenue from recreational sales could bring in $630,000 to upward of $1 million. Olsen said the revenue could go toward expanded social services, public safety, parks and recreation and transportation.

"We're having internal discussions right now, on the gaps that funding could really feel and so it will of course be a part of the budget conversation with both council and staff," said Olsen. "If it's approved by voters, we're looking at some of those initiatives where we know there's a need, but there's not potentially funding in place currently."

Olsen said the funding could go toward public safety services such as building Fire Station 10 in east Columbia.

"We're looking for funding for that project, and we know that's really necessary for the residents that live in that area of town, to keep response times low," Olsen said.

Replacing police dogs could potentially be paid for by the funds as well.

"Any canine that has been trained to detect marijuana will have to be retired because they can't unlearn that," Olsen said. "We can look at how revenue, like revenue from that tax, if it's approved can help fund those changes for us."

Olsen said the city is also looking to, "fund some initiative for our health department as well."

Olsen said the city has been gathering feedback both internally and from Columbia residents to find out where they would like to see the money spent, as the city prepares to create its fiscal 2024 budget.

"Our role is really to educate the voters and the citizens so that they can make the decision on whether or not they feel they do want to support that tax," she said.

Jefferson City Mayor Carrie Tergin said if the tax is passed, the revenue generated from the sales will go toward "extra incurred expenses" caused by recreational sales.

Tergin said this includes law enforcement expenses and zoning and planning departments among others.

"It's important that everybody is informed, that they realize that this tax is something that is for the marijuana recreational sales tax," said Tergin. "It's not something that is for medical and realizing that a lot of cities are doing this and that cities are going to incur costs and expenses."

Jefferson City did not have an estimated cost of how much it expects to gain in revenue, but Tergin said its city council members will see where the funding is "needed the most in the upcoming budget."

Experience with medical revenue

Missouri has a 4% medical marijuana tax applied to every sale. In 2022, collections of the tax totaled $14,575,488 according to the Missouri Department of Revenue.

The DOR collects a 6% tax on the state sales tax for recreational revenue. The department projects an estimated $12.3 million increase in general revenue from the recreational sale of marijuana.

The recreational revenue will be deposited into the Veterans, Health, and Community Reinvestment Fund which is administered by the state treasurer.

All state taxes collected are deposited into the state's general revenue account. All local sales taxes collected from the sales of medical marijuana are distributed back to political subdivisions.

The DOR deposits medical marijuana taxes to its Missouri Veteran's Health and Trust Fund. All medical marijuana taxes are subject to both state and local sales tax.

The Department of Health and Senior Services transferred the funds from the Veteran's Health and Trust Fund to the Missouri Veterans Commission's Veterans Assistance Fund.

A total of $26,978,820 from medical sales has been transferred to the Missouri Veterans Commission from the Department of Health and Senior Services. The last transfer was in September 2022.

According to the Missouri Veterans Commission's Aimee Packard, the money is used to support veteran initiatives and veterans living in one of the state's seven veterans homes.

The uses include Wi-Fi upgrades to veterans' homes, infection control, maintenance and repairs and advanced data analysis.

Recreational marijuana began sales Feb. 3.