Experts analyze significance of Missouri’s marijuana ballot issue

Published: Nov. 5, 2022 at 11:21 PM CDT|Updated: Nov. 6, 2022 at 12:21 AM CDT
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FAIRWAY, KS (KCTV) -- On Tuesday, Missouri voters will decide whether to allow legal sales of cannabis to anyone over the age of 21. The most significant piece of what’s on the ballot as Amendment 2 might not be what becomes legal after it goes into effect but what it does looking back at previous cannabis-related convictions.

KCTV5′s two political analysts – one left-leaning, the other on the right -- remarked on just that during our election special today.

“The expungements I think are significant,” said Sly James, former Kansas City mayor turned political consultant.

“The expungements are a part of this that aren’t getting enough attention. That is a big deal,” said conservative talk show host Pete Mundo.

Other states allow for expungement, but it’s something that has to be initiated by the person previously convicted.

“You have to file a petition and initiate legal proceedings,” explained cannabis lawyer Drew Goodwin with Joseph, Hollander & Craft, LLC. “For a lot of people that requires a lawyer and lawyers require money and you have these convictions that go unaddressed.”

If Amendment 2 passes, that expungement would be automatic with court fees paid by the tax revenue from the program. Exceptions include violent offenders and convictions for distribution to a minor or driving under the influence.

Polls show a majority of the Missouri electorate in favor of the amendment. James and Mundo talked about the changing perception behind that, as well as an important financial piece that some people miss.

“Regardless of whether it’s legalized or not, people are still going to be smoking,” said James.

“And that’s why it’s important to make sure the sales tax rates are also at the right place, so the underbelly market isn’t undercutting what’s legally going on,” replied Mundo.

An often used example of a high tax rate that left the illicit market thriving is California.

“Consumers are extremely price sensitive when it comes to cannabis purchases, but they’re willing to pay a premium to do things in the legal market, just as long as that premium is not excessive,” explained cannabis economy expert Beau Whitney. “The sweet spot really is a 10 to 15 percent premium above the illicit market price.”

In Missouri, the measure would keep the tax rate at 4% for medical card holders. For non-medical purchase, what’s known as adult-use, it goes up to a 6% state tax and an optional local tax of up to 3%.

“I think it’s a low enough tax rate that it gets rid of the illicit market and makes us one of the most competitive states,” said John Payne, with Legal Missouri 2022, the group that initiated the ballot measure.

It’s tricky to compare states because there are a variety of taxes involved on both state and local levels. Some states add sales tax, wholesale taxes and even business taxes

Looking solely at state excise tax, reports Alaska as the lowest in effect at zero. The highest is Washington state at 37%. The median excise tax rate for adult-use retail sales is between 14 and 15 percent.

Then again, tax rates are not the only factors that affect the final price of pot for consumers. Washington has the highest tax rate but some of the lowest prices. Alaska may have the lowest tax rate, but the price for consumers is on the high end for adult-use sales based on the typical cost of one ounce of medium-quality marijuana has.