$1.5 Billion In, Missouri Cannabis Faces a Regulatory Squeeze

Missouri is closing regulatory loopholes as the state’s cannabis market enters a new phase.

The state is cracking down on unregulated hemp-derived THC competition, while refining its licensed system, as the market transitions from expansion to consolidation and optimization.

State lawmakers have recently advanced a rule that would force intoxicating hemp-derived THC products like gummies and drinks into the licensed cannabis system or remove them entirely.

HB 2641, introduced by Rep. Dave Hinman, sets a strict limit of 0.4 mg of THC per container, with anything above that not counted as legal hemp, according to Marijuana Moment. A similar rule was included in a federal spending bill signed by President Donald Trump in 2025 that effectively bans most hemp-derived THC products nationwide.

The legislation is pending review by Gov. Mike Kehoe’s office and his final approval for enactment into law.

“The way the legislation is drawn up is it helps us match the federal standard that’s coming down on these issues,” Kehoe said in a recent episode of This Week in Missouri Politics. He added retailers would have until November to comply, calling it “something we need to get done.”

While lawmakers work to tighten regulations, Missouri’s broader cannabis market continues to grow steadily.

Missouri voters legalized medical cannabis via Amendment 2 in 2018 with 65.5% support, only to approve recreational marijuana for adults aged 21 and over in 2022. Marijuana sales launched in early 2023. Over the past three years, legal cannabis sales have generated over $255 million in tax revenue, reported Marijuana Business Daily.

The state has been generating consistently high monthly revenue since the recreational cannabis sales launch, including its strongest February on record — a total of $119.8 million of cannabis products sold, with adult-use sales accounting for $108.11 million, as per data from the Missouri Department of Health and Senior Services.

March sales of $133.3 million put the Show-Me State in line with Massachusetts and higher than Arizona and Nevada. That’s a 1.9% increase in sales year-over-year, as per the latest Headset data. While positive, it’s no longer an explosive legalization-driven growth, suggesting demand is stable and resilient.

With $1.5 billion in total sales in 2025, nearly 400 licenses, and over 190 dispensaries, the state offers an established, expanding market with predictable revenue streams. Furthermore, future microbusiness licenses could create additional opportunities for market entry.

That said, licensed operators could benefit from stricter regulations around hemp-derived THC products as they would reduce unlicensed competition.