A report from Missouri State Auditor Scott Fitzpatrick found that while the cannabis program generated over $255 million in taxes last year and grew to $3.4 billion in annual sales, it suffers from licensing flaws, undistributed tax revenues, and high litigation costs. Despite these issues, the auditor gave the program a fair rating due to the complexity of implementing the program from the ground up.

Missouri Auditor Deems Cannabis Program ‘Fair’ Despite Licensing Issues

Feb 24, 2026

Source:

TG Branfalt

Ganjapreneur

A report from the Missouri state auditor released last week found
that combined medical and adult-use sales in the state generated more than
$255 million in tax revenues last year, but that there were significant
flaws with the business application process, issues with dispensaries
keeping customer data, and potential over-selling by dispensaries.

The report from State Auditor Scott Fitzpatrick suggests that the problems
with the licensing process – summarized as not ensuring consistency or
transparency – cost the state more than $12.5 million in costs associated
with litigation and administrative appeals from 2020 to 2023. During that
period, a total of 1,909 appeals were filed against the Division of
Cannabis Regulation (DCR). Of those appeals, 849 were denied (a rate of
44%), according to the audit.

The audit also found that cannabis-derived tax revenues “have not been
distributed in accordance with the constitution,” finding an $82.4 million
balance remaining in the Veteran Health and Care Fund, and an $89.2 million
balance in the Veterans, Health, and Community Reinvestment Fund. The
voter-approved constitutional amendment requires equal transfers of
cannabis taxes and fees to the Missouri Veterans Commission (MVC), the
Department of Health and Senior Services (DHSS) for drug programs, and the
public defender system.

“Both the MVC and the public defender system have communicated the need for
additional resources, but the full amount of the funds available have not
been appropriated in the approved budgets.” — Missouri State Auditor
Report, Marijuana Program, February 2026

The report shows cannabis sales in the state have made massive gains since
2020, from about $5.5 million that year to about $215 million in 2021,
about $605.3 million in 2022, about $1.9 billion in 2023, and about $3.4
billion in 2024.

Despite the issues raised in the report, Fitzpatrick gave the program a
“fair” rating due to the scope of implementing a cannabis program from
the ground up.