New medical marijuana law draws millions in investment to Mississippi | Local News
DeAundrea Delaney has built a hemp empire in Mississippi, but her goal has long been to open one of the first medical marijuana dispensaries in the state.
While Delaney, 42, waited for Mississippi’s medical marijuana program to clear legislative hurdles, she started a foundation selling what she legally could: products containing hemp-extracted cannabidiol, or CBD. Hemp is marijuana’s cousin – cannabis without the high.
Delaney opened her first Hemp World store in 2019. At the time, she had just quit her job at an insurance office. Her husband worked in a Nissan manufacturing plant. The couple struggled to pay bills and build up savings while caring for their blended family of six children.
The sale of CBD changed everything for Delaney’s financial situation. Medical marijuana will be too. And not just for her business, she says, but for the state.
“We’re on the cusp of a green economy here,” Delaney said from inside a new Hemp World store she helped open in Olive Branch last week.
For her, this “green” economy refers to all the new jobs and income that will soon arrive in Mississippi to support the medical marijuana industry. With Mississippi’s medical marijuana program months away from becoming a reality, Delaney and other entrepreneurs are investing hundreds of thousands — even millions, in some cases — to create the infrastructure to support it.
Members of the Mississippi Board of Health said regulations for the program will be established by July. The state’s deadline to begin issuing dispensary licenses and patient cards is the following month. Producers have estimated that medical marijuana could be available to patients as early as this fall. Most agree that it will be available by the new year.
“You’re going to see thousands and thousands of jobs that are going to be created,” said Clint Patterson, the cannabis entrepreneur behind what will be one of Mississippi’s largest growth and product manufacturing companies. “People who have gained experience in other states where it is legal will gravitate and migrate to Mississippi because there are better opportunities in a new state.”
It would be a change of pace for Mississippi, which was one of only three states to experience a population decline since 2010, according to the last U.S. census.
Patterson saw the impact of medical marijuana on his home state of Oklahoma where he started his business. Once abandoned warehouses and factories are getting a second life as hydroponic grow houses. Overall, property values will increase, he said.
His company’s Mississippi operation — Mockingbird Cannabis, named after the state bird — has taken over a 163,000 square foot building that once housed the state’s revenue department in Clinton. Mockingbird has invested $30 million in the facility, Patterson said, and it will support up to 200 new jobs.
Delaney says his experience with CBD and hemp shows how transformative medical marijuana could be for Mississippians as a path to wealth in one of the nation’s poorest states.
Delaney and her husband run two CBD stores in Pearl and Jackson. It has also created six other stores with entrepreneurs under Hemp World’s store partnership program. Each of the hemp stores plans to apply for licenses to sell medical marijuana and become dispensaries under the state’s burgeoning program. The state health department said it plans to start accepting applications in June.
Medical marijuana products will be subject to the current 7% state sales tax.
Delaney has been following how other states have legislated medical marijuana in hopes she can easily transfer her CBD stores to dispensaries. For example, it ensures that stores are not opened near schools or churches, which the new law prohibits.
Now, it’s just a waiting game until the health department releases new specifications.
It’s been an uncertain road for medical marijuana patients and businesses in Mississippi. In November 2020, voters overwhelmingly passed Initiative 65 to create a medical marijuana program. But in May 2021, the state Supreme Court struck it down on a constitutional technicality.
“When Initiative 65 was struck down by the Supreme Court, it kind of put things in limbo,” said Melvin Robinson, spokesperson for the Mississippi Cannabis Trade Association. “People were a bit worried that their investment was going nowhere.”
Last month, Governor Tate Reeves signed into law Mississippi’s medical cannabis law. Today, the trade association receives dozens of emails and phone calls every day from Mississippians wanting a slice of the medical marijuana market.
Investments outside the state are already there. Grow Generation will open its 64th US location in Jackson by the summer, according to company president Michael Salaman. The publicly traded company is based in Colorado. Its locations sell supplies and tools growing like a Home Depot for the cannabis industry in 13 states – 14 with the Mississippi store.
Salaman said the 40,000-square-foot store and showroom inside a former restaurant supply warehouse will open this summer and house more than $3 million in inventory. In 12 months, he said, there will be two more locations. His team is already exploring properties on the Gulf Coast and near the Tennessee border. This will be the company’s first entry into the Southern market.
Salaman estimates there will be 50 to 100 new employees in Mississippi, from store and warehouse managers to salespeople and truck drivers.
“We’re going to bring in producers and teacher training,” Salaman said. “We not only provide the products, but also the knowledge needed for growers to succeed.”
Mississippi’s bill allows micro-producers to receive licenses for as little as $2,000 per year with a $1,500 application fee. Costs are broken down into six tiers based on the size of a growing facility.
“As far as the cannabis business goes, it’s pretty good,” Robinson said. “It’s good for small businesses and entrepreneurs.”
Large growers with more than 100,000 square feet of grow space will need to pay an application fee of $60,000 and an annual license fee of $150,000. The dispensary system, however, is not hierarchical. Business owners like Delaney will have to pay $15,000 to apply for a sales license and an annual fee of $25,000, regardless of business size.
That can be a barrier to entry, Delaney said, which is part of why she created the Hemp World Partner Program to help others start stores. It’s a way for her to support the black community. She is also president of the Mississippi chapter for Minorities for Medical Marijuana.
“We’re unrepresented, even more incarcerated,” Delaney said, referring to black Mississippians. “We are disenfranchised, so we need a stepping stone to enter the industry.”
The new law accommodates Mississippi contractors rather than setting up a system that could divert state profits. All marijuana and related products, from gummies to oil, must be grown and manufactured in Mississippi.
Patterson says at least 80% of his planned hires will be current Mississippians. Positions range from $17-an-hour warehouse jobs — well above the state’s $7.25 minimum wage — to salaried management positions.
As Mississippi’s program becomes fully operational, more ancillary businesses will appear — like high-end security and transportation services for waste disposal companies.
“The changes are going to be dramatic,” Patterson said. “I think it’s going to have ripple effects for the whole state… It’s extra money in the budget. I know it’s the hope that they can create new tax revenue to give back to people.