Recreational Marijuana Sales Tax

In November 2022, voters in Missouri approved a State Constitutional amendment (Amendment 3) that allows for the recreational use of marijuana by adults throughout the state. Many of the state-licensed medical marijuana dispensaries began selling both medical and recreational marijuana shortly after. However, both medical and recreational marijuana are taxed at different rates. Additionally, municipalities in Missouri can add an additional 3% sales tax on recreational marijuana. The item on the ballot for voters to decide is whether to add that additional sales tax on recreational marijuana.  

If approved, this 3% sales tax will ONLY be applied on the sale of recreational, adult-use marijuana. Only those who purchase will be required to pay.

Based on sales of medicinal marijuana in the City's two dispensaries, it is forecasted that this 3% sales tax could create roughly $250,000 annually. 

The funds will go to the City's General Revenue, which is subject to Council approval for appropriation during the annual budget process. There are several priorities, including street improvements, that these fund could be used to support. $250,000 in additional revenue could help repave an additional 1,500 feet of neighborhood roadway.

The County is also asking for an additional 3% sales tax to be added on the sale of recreational marijuana. Originally, the Missouri Department of Revenue clarified a rule saying the County could not 'stack' its 3% sales tax on top of the City's 3% sales tax. They further clarified saying that a County sales tax would only apply on those sales outside City limits.

Since then, several counties in Missouri have filed a lawsuit in court hoping they will be allowed to stack their 3% on all sales in the County and not just those from dispensaries outside City limits. It is unclear how the courts will rule at this time.

A General Fund is a budgeting and accounting tool used by every local government. It is the primary fund used to collect a variety of sales taxes, property taxes, fees and other revenues that are then part of the annual Council-approved budget process to allocate funding to vital programs and services.

Like Public Safety and Parks, the general fund pay for the salaries of employees, funding for capital projects and supports annual maintenance programs like our Pavement Management Program. Also, just like the Public Safety and Parks funds, these funds are required to be approved by ordinance by the City Council every year.

Currently, a majority of the City's street improvement programs are funded through the General Fund.