A long-overdue overhaul is necessary in Mississippi’s medical cannabis industry, where the discrepancy between supply and demand is preventing the sector from being as profitable as in other states.
Cannabis sales across the nation were initially inflated as people flocked to dispensaries to buy cannabis products. Businesses then proceeded to scale up and expand, hoping to seize opportunities in this new market. But as the COVID crisis ended and people began going out again, cannabis sales dipped, and many in the industry failed to adjust properly. This same trend was seen in more mature markets such as California and Colorado, but in Mississippi, the regulatory environment has truly thrown a wrench into the works of this nascent industry.
Ken Newburger from the Mississippi Medical Marijuana Patient Association pointed out that there are 45,000 medical cannabis cardholders in the state, and for businesses to be profitable, that number needs to at least double. On top of that, taxes are another factor dragging cannabis businesses down, as they operate in a legal limbo—legal at the state level but illegal at the federal level—resulting in them being hit hard with taxes, according to Newburger.
While it costs around $40,000 upfront to get a cannabis business license, it’s much cheaper to obtain a cannabis cultivation license—around $3,500 to $4,000. Currently, the state has 130 growers and about 1,000,000 square feet of canopy, which is a lot compared to the small number of patients.
Around two and a half weeks ago, the state government held discussions on how to relaunch the program to better serve patients and offer better profit margins for active businesses.
According to attendees to that discussion, the plan is to add a couple of medical conditions in the next legislative session. The two main conditions being pushed for are insomnia and anxiety, which would significantly increase the number of potential patients. The new influx of customers could become a reality as soon as those conditions are added to the law, assuming it is written appropriately. If not, the latest it will take effect is July 2025.
In addition, Mississippi is considering accepting medical cards from other states year-round. Currently, out-of-state medical cards are accepted only for limited periods—namely, twice a year for a couple of weeks.
Another bottleneck for the industry is the number of prescribing doctors. According to a person familiar with the matter, doctors may be limited by various factors such as malpractice insurance, or restrictions from their employers or groups. A person MMJDaily spoke to visited five different grows in the state. With so much supply and so little demand, it is no surprise that these grows are operating at less than one-third capacity.
