An Ordinance approving the 3% taxation on all tangible personal property retail sales of adult use marijuana.

The attached ordinance imposing a sales tax at a rate of three percent on all tangible personal property retail sales of adult use marijuana sold within the City of Cape Girardeau, Missouri, pursuant to Article XIV, Section 2.6(5) of the Missouri Constitution subject to the approval by the voters of the City of Cape Girardeau at the general municipal election to be held on Tuesday April 04, 2023, designating the form of ballot, and directing the city clerk to provide notice of said election.

Missouri voters passed Amendment 3 to legalize recreational marijuana to adults.  The amendment is approximately 30 pages long.  The amendment allows for a sales tax at a rate of three percent on all tangible personal property retail sales of adult use marijuana sold. Currently Cape Girardeau County and other cities are planning on putting the tax on the April ballot.  If the council wishes to impose the three percent tax, the taxation ordinance and ballot must be approved by the city council and delivered to the County Clerk no later than January 24, 2023 at 5:00 p.m.

There are currently about 190 dispensaries state wide open for business, so the average dispensary is making right at $184k monthly. There will be some more dispensaries operational by this time next year, which will probably put the number around 205. With that number of dispensaries and statewide monthly revenues at $87.5m, the average dispensary will gross $427k each month.  A 3% tax on those sales will generate $12,805 each month and $153,660 annually. That is in addition to regular local sales taxes, and it is expected that the market will continue to grow for at least the next few years.

The staff recommends the approval of the ordinance.

ATTACHMENTS: Name: Description: 2023.01.09.Marijuana.Tax.Ord.pdf Ordinance.2023.01.09