Ever wonder if booming industries always mean booming tax dollars? In Meridian, Mississippi, the rapid growth of the medical marijuana program hasn’t quite translated to the expected financial windfall for the city. We dive into why the revenue is lagging behind the impressive sales figures. What does this mean for local economies?
Despite a flourishing medical cannabis market across Mississippi, local governments, particularly Meridian, are facing a perplexing reality: the anticipated surge in tax revenue from the burgeoning industry has yet to materialize, leading to a significant disparity between sales growth and municipal coffers.
The journey began in 2022 with the passage of the Mississippi Medical Cannabis Act, which established a framework for a state-regulated medical marijuana program. This legislation granted counties and municipalities a crucial 90-day window to opt out, a decision that saw initial hesitation from some, like Marion and Lauderdale County, who later reversed their positions to embrace the economic opportunities.
Meridian, however, was among the first to welcome medical marijuana dispensaries, with high expectations that the industry could potentially double its tax revenue. Former City Councilman Joseph Norwood recalls such projections, yet official data from the Department of Revenue indicates only a modest 6.83% increase in sales tax allocations for the Queen City between January 2021 and July 2025.
Statewide, the retail sector of the medical marijuana industry has demonstrated remarkable expansion. From its launch in January 2023, sales quickly escalated to over $11.2 million by the end of Fiscal Year 2023. This explosive growth continued, reaching an impressive $75.3 million in Fiscal Year 2024 and nearly $118.7 million by the conclusion of Fiscal Year 2025, consistently posting double-digit quarterly increases.
The paradox lies in the disconnect between these soaring sales figures and the comparatively low tax revenue generated. The state’s 7% sales tax on medical marijuana translated to approximately $8.3 million in revenue for FY25, a stark contrast when compared to the $115.9 million from tobacco taxes and $26.3 million from beer and wine taxes collected over the same period. Furthermore, specific sales tax figures for Meridian and Lauderdale County from medical cannabis remain unisolated by the Department of Revenue.
Beyond sales tax, Mississippi also garners revenue from excise taxes and permit fees. Approximately $7.5 million was collected in FY24 and $7.4 million in FY25 from a 5% excise tax levied on wholesale transactions between growers, laboratories, and dispensaries. This robust industry expansion is also evident in Lauderdale County, which now boasts 10 active dispensary licenses, four caregivers, 170 workers, nine practitioners, and 1,236 medical marijuana patient applications.
Councilman Dwayne Davis, Meridian’s current council president, points to a slight uplift in property taxes resulting from medical marijuana businesses investing in local infrastructure, citing the $20 million Southern Crop cultivation facility as a prime example. This investment, alongside the broader industry growth, prompts speculation among local officials.
Both Davis and Norwood suggest that some of this substantial investment could be strategic positioning by companies anticipating future shifts, such as the potential statewide legalization of recreational marijuana or significant changes to federal drug classifications. Recent discussions, including those by former President Donald Trump, regarding reclassifying marijuana from a Schedule I to a Schedule III substance, could profoundly impact taxation and operational costs for cannabis enterprises nationwide.
