Medical Cannabis Dispensary Warns Against Open Market

In January 2020, the Missouri Department of Health and Senior Services began awarding licenses for medicinal cannabis dispensaries.

Several of such dispensaries opened in the fall of that year.

However, the DHSS denied licenses to the vast majority of applicants because state imposed a cap on the number of permits it may issue.

The St. Louis Post-Dispatch reports that the district spends millions of dollars on legal expenses to defend its license denials.

The action detracts from tax funds intended for the Missouri Veterans Commission, hence why others believe the agency should eliminate the license cap. However, Chief Operating Officer Michael LaFrieda at Shangri-La dispensary in Columbia disagrees.

“Oregon and Oklahoma have an open market,” said LaFrieda. “And it’s not a very good setup for the industry.”

LaFrieda has prior expertise in cannabis in Nevada and believes that knowing the market and excess of products is critical to ensuring the industry’s health.

“192 dispensary licenses in Missouri was already quite a bit, and currently — and I might be slightly off on that — probably roughly 25 percent of those businesses are still not up and running yet,” LaFrieda added. “So, if there was an even bigger market of businesses opening, they probably wouldn’t even be opening.”

Regarding LaFrieda and the Shangri-La Dispensary, the restriction may result in a more positive consumer experience. LaFrieda stated that consumer demand would remain constant even in the absence of a cap.

“We’d rather have a few extra dollars, be able to provide a much better selection of products instead of that total surplus and ‘total free-for-all’ that we’ve seen in open markets,” he explained. “The same amount of money [tax revenue] is going to be generated either way.”

LaFrieda predicts recreational cannabis usage in Missouri might be legalized by the state legislature by the end of 2022.

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