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Medical marijuana brings business to smaller towns in Missouri

Columbia Missourian Columbia Missourian | August 11, 2022

Aug 11, 2022

Richard Gunnels used to be skeptical of marijuana, and he didn’t think it should be legalized for medical purposes.

Gunnels is a small-town Missouri row-crop farmer, and some of the land he grows on today has been farmed by his family for more than 120 years in Macon County. He grew up on that farm, which has been cultivated by his family for generations.

It was an uncle in Florida who changed his mind about medical cannabis. The uncle suffers from tremors, and he showed Gunnels how medical marijuana helped his condition. Now, the Missouri farmer oversees a medical marijuana operation in Macon’s industrial park.

“I’m always trying to help people out and do things for people to make their life better,” Gunnels said. “And this really fit in with the things that I like to do with agriculture and really fit into my interests.”

Medical marijuana production has been a source of new jobs and revenue in Missouri’s less-populated towns and cities since voters elected to legalize it in November 2018.

Gunnels’ operation, named Agri-Genesis, has one of many small-town cultivation facilities in Missouri. Nearly half of Missouri’s 63 cultivation licenses are based in towns with a population below 10,500. There are also growers in Humansville, Vienna and Vandalia, for example.

Missouri’s medical marijuana economy surpassed $400 million in sales this July. The total dates back to the state’s first sale in October 2020. The industry has been averaging around $30 million in sales each month since November 2021, said Lyndall Fraker, Missouri Department of Health and Senior Services’ director of medical marijuana regulation.

One influence on the proliferation of cultivation sites in small towns was a set of rules that awarded extra points in the license application process for companies planning to set up shop in lower-employment areas.

One company, Flora Farms, ended up with a cultivation facility in Humansville due to that rule, said Mark Hendren, president of Flora Farms. The group’s facility in the town of 907 employs around 150 full-time workers.

“The impact in that community is dramatic,” Hendren said.

Vandalia, population 3,533, is home to two cultivation facilities. City Administrator Darren Berry gave the topic no thought when Missouri voters approved medical marijuana as a ballot initiative in November 2018.

All of a sudden, Berry had three or four potential companies searching for sites in Vandalia. One of the companies was 1913 Holdings, which eventually rented a vacant 35,000-square-foot building in the city. The company recently bought the space, and it also has cultivation facilities in Carrollton and Waynesville.

The Vandalia facility employs 45 full-time workers. Berry has observed those employees frequenting local restaurants for lunch and convenience stores when passing through town. The city is also getting a boost from utility use by the facility.

Cultivation happens indoors because it yields more crops each year. The facility pays Vandalia around $45,000 each month in utility bills, and the location isn’t running at capacity yet, Berry said. For water alone, the usage is about 10,000 gallons each day.

“That’s extra revenue for the city that wasn’t there,” Berry said.

When 1913 was looking to take space in the Vandalia building, medical marijuana was new and taboo to the small town with an aging population, Berry said. Some residents might have had misconceptions about what a cultivation site in town would mean, and the city held a couple of public meetings for the companies to introduce themselves.

The companies pitched their business and benefits to the community, and public officials heard comments from residents. Although public comment shows some residents were skeptical of the incoming industry, 1913 received numerous support letters from local businesses and organizations.

“The perception of marijuana changed,” Berry said. “I think it generated a lot of excitement, the medical marijuana field did.”

The state’s licensed cultivation facilities have the capacity to cultivate enough medical marijuana for at least 300,000 patients, based on the square footage of all the facilities, Fraker said. The state has around 188,000 registered patients.

Flora Farms has the capacity to grow over 2,000 pounds of marijuana each month. However, there isn’t enough demand for that level of production, Hendren said. In Macon, Agri-Genesis is in the early stages of expansion, said Sean Carriger, president of the company.

Many in the medical cannabis industry hope Missouri voters will pass the recreational marijuana ballot measure in November. If that happens, they anticipate rapid growth for Missouri’s marijuana industry.

Around 3% of Missouri’s population participates in the medical marijuana market. Carriger said Agri-Genesis the could potentially see a five-fold increase to sales in a recreational market, due to the potential for greater legal participation.

“I can’t overstate the impact that would have, both on our company and the industry,” Carriger said.

Read the full story from Columbia Missourian and listen to the interview here.

Medical marijuana brings business to smaller towns in Missouri
Medical marijuana brings business to smaller towns in Missouri