Missouri Secretary of State Jay Ashcroft last week rejected an executive order that would have banned the sale of “unregulated psychoactive cannabis products” and upended the state’s hemp industry.
Green Market Report wrote on Monday that the executive order issued by Governor Mike Parson on August 1st “would have had a huge impact on the state’s hemp industry,” by prohibiting sales of foods containing psychoactive cannabis compounds. The order stipulates that such products can be sold if they come from an approved source, though the state does not recognize any approved source for the products in Missouri.
This was the second time that Ashcroft nixed emergency rules regarding hemp-derived cannabis products put forth by the Governor’s office. The Secretary of State said Parson's office did not provide the required legal justification for the emergency rule.
The executive order issued by Parson would have restricted sales of hemp-derived products beginning September 1st. It also directed the Department of Health and Senior Services to classify unregulated psychoactive cannabis products as unapproved beginning on September 1st.
Parson announced the ban on hemp-derived products at the Jefferson City Capitol building during a press conference in which he told reporters “our goal is to safeguard the health and safety of Missourians, especially the most vulnerable: our children.”
The Associated Press quoted Missouri Department of Health and Senior Services Director Paula Nickelson as saying that the state had received reports of adults and children being hospitalized after consuming these products, “which sometimes are packaged similarly to existing candies marketed for children.”
In an August 1st press release announcing Executive Order 24-10, Missouri Attorney General Andrew Bailey said “When purchasing products, Missourians have a right to know if they will be subject to serious and potentially dangerous side effects.”
The press release stated that “these intoxicating compounds are currently untested in humans, unregulated, and sold to the public without restriction. Due to lack of regulatory oversight, these products are marketed aggressively and assertively in eye-catching ways to attract public consumption, particularly that of young consumers.”
Because the emergency rule was rejected by the Attorney General the Missouri Division of Alcohol and Tobacco Control (ATC) must follow a formal rulemaking process to submit a new proposal, which should take at least six months.
“A Misguided Approach”
In an August 9th press release, the Missouri Hemp Association referred to Parson’s order as “a misguided approach that will devastate small businesses and drive consumers to the black market.”
“This heavy-headed and misguided measure threatens to dismantle an industry that has been a beacon of entrepreneurship, job creation, and innovation in Missouri.”
The group also alleged that the executive order “appears to favor large corporate cannabis multi-state operators (MSOs) at the expense of Missouri's small business owners, a move that undermines the spirit of free enterprise and economic freedom.”
Last week, Columbia-based NPR affiliate KBIA reported that a local store called Hemp Hemp Hooray closed, with owner Kevin Halderman citing the executive order as a major factor.
“Our lease was actually up at the end of next month, and so we kind of had to make a decision, so we made it officially the day that he signed that executive order," Halderman said.
In the interview, Halderman said that the opening of new dispensaries following legalization had also hurt his businesses, as had the influx of cheap hemp-derived products from overseas.
“A lot of the other issues were some of the illicit (products) that were coming in, probably from China. It made the market very hard to work in, and you had to do super high volumes to compete on a price. And that just really, really hurts the whole industry that way too,” Halderman said.
He also said he believes those products from overseas were the impetus for Parson’s emergency order.
$1.4 billion in cannabis sales in one year
In the November 2022 election, voters in Missouri approved Amendment 3, legalizing the possession, use, delivery, manufacture, and sale of recreational marijuana for adults over age 21.
Recreational cannabis sales officially became legal on February 3rd, 2023. In February 2024, the Missouri Department of Health and Senior Services reported that $1.13 billion in adult-use purchases had been made in the first year of operations. That figure made Missouri the country’s sixth-largest legal cannabis market, behind California, Michigan, Illinois, Florida, and Massachusetts.
But those numbers pale compared to the potential size of the legal intoxicating hemp products market.
According to a study by the market research firm the Brightfield Group, the intoxicating hemp-derived products market should expand to $3.5 billion per year by 2028, with a compound annual growth rate (CAGR) of 5%.
The report stated that the market in 2020 was worth only $200 million, and had already expanded to $2.8 billion in 2023.
“This exponential rise is a testament to promising consumer demand and the rapid diversification of product offerings in the sector. In the absence of comprehensive regulations imposing substantial restrictions on the sale of these products, the market is anticipated to expand to $3.5 billion by 2028, exhibiting a compound annual growth rate (CAGR) of 5%,” the report states.
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