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Local players in the marijuana industry noted February was a record-setting sales month as recreational weed made its Show-Me State debut.
Some companies reported sales doubling and even tripling since adult-use marijuana became legal to sell Feb. 3. The market expansion beyond medical marijuana occurred three days earlier than many in the industry expected, as a Feb. 6 recreational launch date was previously anticipated.
It contributed to a state record of $102.9 million in cannabis sales for February, according to the Missouri Department of Health and Senior Services. Nearly $72 million of the total was generated by adult use, with $31.2 million coming from medical sales. February easily surpassed the industry’s previous monthly sales record of $40.5 million in December 2022.
Humansville-based Flora Farms LLC and Republic-based Easy Mountain Cannabis Co. were among over 300 companies ready to begin selling at the start of the month after their dispensaries were approved for a comprehensive license by the state Division of Cannabis Regulation.
Mark Hendren, Flora Farms president, said its four dispensaries in Springfield, Humansville, Neosho and Ozark saw increased customer traffic immediately when recreational sales began.
“It’s a significant increase in sales as we had hoped and expected since last year,” he said, noting company sales increased 250% in February from its average month but declining to disclose figures. “Every retail outlet we have is up.”
Both Hendren and Alex Paulson, Easy Mountain co-owner, say February was the largest single month for sales in their respective companies’ young history. Flora Farms opened in late 2020, followed by Easy Mountain in early 2021.
“It’s coming up on about three times our normal business,” Paulson said, noting the 300% sales increase started the first weekend of recreational marijuana sales and has mostly remained consistent ever since.
Paulson said his business tracks its customers, which he refers to as patients, regardless of whether they buy products for recreational or medicinal purposes.
“Previously, to see 150 patients was a really busy day for us,” he said, noting that would usually be a Friday and Sunday might have about 70 customers. “Now, we’re seeing 400 people on a Friday and 250 on a Sunday. That’s adult use and medical.”
At Easy Mountain, the adult-use and medical marijuana customer split is roughly 60/40, Paulson said. Hendren said about 70% of Flora Farms’ customers are recreational weed buyers. However, the 30% that continue to purchase marijuana for medical purposes is holding steady, he said.
Medical users pay a 4% tax on their purchases while recreational marijuana is taxed at 6%. Municipalities are allowed to increase that 6% if approved by voters. Several Springfield-area towns, including Ozark, Monett and Mount Vernon, have a 3% marijuana tax proposal on the April 4 election ballot. City of Springfield spokesperson Cora Scott said no decision on the issue is pending from Springfield City Council.
“We saw a slight uptick in the medical sales in the last week of January,” Hendren said. “That’s now leveled back where it was. We think it was primarily because of the uncertainty of what prices and availability might be.”
Hendren said lines persist at Flora Farms dispensaries, especially on the weekends, but wait times are typically no more than 10-12 minutes per person. The wait averages 5-10 minutes at Easy Mountain, Paulson said. Both companies have separate lines for adult use and medical customers.
Recreational sales statewide during the first weekend of February totaled roughly $8.5 million, according to the DHSS. Sales for January, the last full month of just medical marijuana in the market, were over $37 million, according to DHSS data.
Supply and demand
Buffalo-based Heartland Labs, which manufactures cannabis-infused products for distribution to roughly 125 dispensaries across the state, has experienced a strong uptick of orders, said Michael Pearcy, managing partner of the family-owned business. While not disclosing financials, he said February sales were up about 350% from the average month last year.
“What we’ve seen is the order frequency has increased by about twofold, and the volume within the orders has increased probably by 300%-500%,” he said.
Demand for Heartland Labs products, which include edibles, such as cookies and gummies, as well as concentrates, cannabis-infused honey and transdermal patches, are up across the board, he said. The baked goods, which include several flavors of cookies, are currently the most popular. The turnaround time to get the products tested by a licensed testing facility and receive results is roughly 10-14 days.
“We were prepared as we had been ramping up our inventory and getting ready for this as best as we thought we could,” Pearcy said of the expected demand ahead of recreational sales starting.
The company has kept up with demand but not without a lot of effort, Pearcy said, noting about 90% of the staff are putting in overtime.
“It’s all voluntary; we don’t require it,” he said, adding the company has expanded its staff in the past couple months to 13, an all-time high.
Staff growth to handle increased business also is ongoing at Flora Farms and Easy Mountain. Hendren said each dispensary has nearly doubled to over 20 employees each. Last year, the dispensaries employed between 10-12 people apiece. The Humansville cultivation facility has scaled up about 40 employees in the past couple of months, pushing the company’s workforce past 200.
“It’s a moving target every day as we’re recruiting and hiring. We do not have enough right now,” he said, adding the company wants to hire another 20-30 people. “Our main bottleneck right now that we’re getting addressed is in the trimming and packaging areas.”
Paulson said Easy Mountain added two new employees to its payroll as February ended.
“We went from a pretty intimate crew of about eight of us that were full time to now we’ve got 15 going on 16 full-time people,” he said, adding the dispensary is now probably fully staffed. “We’re growing by quite a bit.”
Flora Farms desires to expand its cultivation facility, which occupies 115,000 square feet among two buildings, by another 80,000 square feet. But Hendren said officials want to keep watching adult-use sales before moving forward.
“We are hopeful this is a steady and consistent increase in business. It’s a month in and it has been steady,” he said. “Our plan is to evaluate this for about 90 days and then make a decision.”
Easy Mountain also is eyeing an expansion project, Paulson said. The dispensary intends to begin expanding its interior showroom in the next couple months, with plans to also add a drive-thru and more parking. Bids are still being sought for the project, he said, adding the interior work will hopefully start by late April.
“It will be a significant investment,” he said, estimating a $250,000 price tag.
Paulson said he’s confident that business will remain strong enough to justify the investment.
“We help as many people as we can every day,” he said. “We’re at a pretty consistent and steady new normal for us right now.”
SBJ interviews the interim dean at the William H. Darr College of Agriculture at Missouri State University.