Missouri Says Its Cannabis Market Captures 93% of Spending. The Study Couldn't Tell Who Owns It.

Gideon Cunningham's team was hired to answer a question Missouri has been arguing about since voters legalized adult-use cannabis in November 2022: does the state need to issue more licenses? Cunningham, a principal investigator at the New York firm Cannabis Public Policy Consulting, delivered the Phase 1 report to the Division of Cannabis Regulation this month, and the headline answer was no. The regulated market, the report concluded, is "effectively meeting demand and has successfully transitioned into a mature, competitive marketplace." (S1, S2)

The number behind that conclusion is genuinely remarkable, and it is the best in the country. About 93 percent of Missouri's reported cannabis spending happens inside a licensed dispensary. In every one of the state's eight congressional districts, licensed stores account for more than 90 percent of reported spending, ranging from about 92 percent in the first district to better than 97 percent in the second. Four years in, Missouri has done what California, Colorado and New York have all failed to do: it has made the legal market the market. (S1, S2)

Then, in the section on competition, the report says something else. The researchers could not determine how concentrated ownership is, because they did not have usable data on who owns the licenses, or on whether multiple dispensaries operating under different licenses belong to the same company. (S2)

“Ownership-based analyses would provide a more comprehensive assessment of market structure by evaluating concentration across common ownership groups.”

— Missouri Cannabis Market Study: Phase 1 Report, Cannabis Public Policy Consulting

The technical shape of the gap is worth naming, because it is what makes the conclusion fragile. The study measures concentration using the Herfindahl-Hirschman Index, the standard antitrust yardstick, but it runs the HHI across licensed facilities rather than across owners, and recommends that the division start feeding de-identified ownership data into those same calculations. An HHI computed on storefronts tells you how sales are spread across addresses. An HHI computed on owners tells you whether the market is concentrated. Only the second is what the word means.

Take the headline finding seriously first, because it is the rarest thing in American cannabis: evidence that a legal market can win. Missouri caps licenses, and the standard criticism of caps is that they restrict supply, hold prices up and push buyers to unlicensed sellers. California's experience is the cautionary tale operators cite. Missouri capped anyway and still took 93 percent of the spend. (S1)

The underlying numbers show a market absorbing growth rather than diluting it. Annual dispensary sales rose from about $1.30 billion in 2023 to $1.51 billion in 2025. Over the same stretch the number of active dispensary licenses went from 201 to 220. Average sales per store held between roughly $6.5 million and $6.9 million, meaning demand grew about as fast as the storefronts did, which is the signature of a market that is not yet saturated. Consumers spend an average of $161.81 a month, with a 95 percent confidence interval running from $142.41 to $181.21, roughly half of it on flower, then vapes, then edibles. Price, potency and convenience drive the decisions. (S2)

The ownership blind spot is not an oversight by the researchers. It is a disclosure problem, and the report names it: "While ownership information is collected as part of Missouri's licensing and regulatory processes, these data are complex and subject to legal and confidentiality considerations that may limit external use." The state has the information. Its own consultants could not use it. (S2)

Amy Moore, who directs the Division of Cannabis Regulation, acknowledged the limitation when the study came out. "While this study did not include all factors related to market evaluations, such as ownership data," she said, "DCR intends to include this information as recommended by CPPC in future studies to assist with more comprehensive market monitoring." The division has filed proposed rules that would require every licensee to report its ownership percentages annually. (S2)

That sounds like the fix until you read the next sentence. Those annual ownership reports, division spokeswoman Lisa Cox said, "would be subject to the same confidentiality analysis as any other information received from a licensee" under state law. Missouri is building a better ownership dataset that may be just as unusable by anyone outside the division as the current one. (S2)

The reason the gap matters this month rather than someday is that Missouri courts are already litigating the question the study declined to answer. At least two antitrust suits were filed in May alleging that cannabis companies violated the state's constitutional license cap. Good Day Farm, a Little Rock company and Missouri's largest dispensary chain, faced a second suit within two weeks of the first. (S3)

The allegation is specific. Good Day Farm and affiliated entities are tied, through ownership records, management structures and acquisition agreements, to more than 60 of Missouri's 224 dispensary licenses, better than a quarter of the market. The petition, brought by Local Cannabis and VIBE, names nearly 50 limited liability companies and a handful of individuals. It calls the arrangement the "GDF Cartel" and argues the structure is "unlawful, unenforceable, and void." On October 1, a judge denied Good Day Farm's motion to dismiss. (S3, S4)

The legal fight turns on eleven words that disappeared. Missouri's 2018 medical marijuana amendment barred the state from issuing more than five dispensary licenses to any entity under "substantially common control, ownership, or management." The 2022 recreational amendment replaced that with a cleaner-looking rule: no entity may own more than 10 percent of total dispensary licenses. The phrase covering common control and management was dropped. Attorneys for the plaintiffs say the broader medical language still governs; some of those same attorneys served on the advisory team that drafted the amendment. (S3)

An ownership cap written without the words "control" or "management" is a cap on the name on the paperwork. Nearly 50 LLCs is what that looks like in practice, whether or not a court ultimately finds it unlawful. And it is precisely the structure a facility-level sales analysis cannot detect: sixty stores under sixty license numbers look like sixty competitors in the data.

Nor is the litigation theoretical anymore. On October 6, two weeks before the study was released, a St. Louis jury awarded $10 million in a separate and sprawling fight over Missouri cannabis ownership. Juries assigning eight-figure damages over who controls a license is not the profile of a market whose ownership structure is a settled or minor question. (S8)

Good Day Farm's position, anticipated in the plaintiffs' own filing, is that the operation is lawful, that its arrangements do not constitute substantially common control, ownership or management under the constitution, and that coordinated wholesale purchasing does not violate state antitrust law. That is a serious defense, not a technicality: voters did approve new language, and the plain text of what they approved speaks to ownership percentage. A court may well decide that the dropped phrase was dropped on purpose.

It is also fair to say the study did what it was asked to do. Cunningham's team was commissioned to assess demand and market concentration with the data the state made available, it reported no evidence of overconcentration on that basis, and it explicitly told the division to add ownership analysis next time. The failure here is not research misconduct. It is a state answering a competition question without the competition data, and then publishing the reassuring half.

1. The Good Day Farm antitrust litigation, now past a motion to dismiss, which will produce the ownership record the study lacked.
2. The division's proposed annual ownership-reporting rule, and whether the resulting data is shielded by the same confidentiality analysis as everything else.
3. Phase 2 of the market study, and whether it incorporates ownership as Moore said it would.
4. The microbusiness rollout, 144 licenses are expected in total, with roughly 20 approved so far, which will change the concentration math.
5. Any move to issue additional dispensary licenses, which the study says may not be necessary and the plaintiffs' theory implies is beside the point.

Missouri built the most successful illicit-market displacement in the United States. That is a real achievement, it belongs to the operators and regulators who did it, and no antitrust suit takes it away. Ninety-three percent is the number every other state would like to have.

It just does not answer the question the state asked. Whether Missouri's market is competitive depends on who owns the stores, and the report that declared it competitive says, in its own words, that it could not see.

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