Officials in Meridian anticipated an increase in tax revenue when they opted to participate in Mississippi’s medical marijuana program in 2022. However, two years post the opening of the first dispensary, the anticipated financial impact on the city has yet to materialize.
Background on the Mississippi Medical Cannabis Act
Enacted by the state Legislature in 2022, the Mississippi Medical Cannabis Act authorized the state’s Department of Health and Department of Revenue to implement a medical marijuana program. This legislation established regulations affecting patients, dispensaries, cultivation facilities, and laboratories. Local governments had a 90-day period to opt out of allowing marijuana operations within their jurisdictions, although voters could later reverse this decision through petitions and special elections.
Initially, Marion and Lauderdale County opted out, citing uncertainties regarding the program. However, voters in Lauderdale County overturned this decision, and subsequently, Marion officials decided to permit medical marijuana businesses after acquiring more information about the industry.
Meridian’s Early Participation
Meridian opted to allow the program and saw one of the first dispensaries open its doors in January 2023. Joseph Norwood, a City Council member from 2021 to 2024, mentioned that council members were informed of the potential for tax revenue to double with the establishment of medical marijuana. Nonetheless, tax allocations through the state Department of Revenue indicate that from January 1, 2021, to July 10, 2025, Meridian’s sales tax revenue increased only modestly by 6.83%.
Growth in Medical Marijuana Sales
Despite the slow revenue increase for Meridian, retail sales of medical marijuana in Mississippi have experienced significant growth. By the conclusion of the 2023 fiscal year on June 20, 2023, sales reached $11.2 million, escalating to $75.3 million in Fiscal Year 2024. The state has reported consistent double-digit growth in each quarter of 2025, finishing with nearly $118.7 million in total sales.
Tax Revenue and Comparisons
Yet, the tax revenue from medical marijuana sales remains relatively low. For Fiscal Year 2025, the 7% sales tax on total marijuana sales is projected to generate around $8.3 million. In comparison, Mississippi’s tobacco tax, which adds $0.68 per pack, and the tax on beer and wine, at 42.68 cents per gallon, yielded $115.9 million and $26.3 million, respectively.
The Department of Revenue does not provide specific sales tax data for medical marijuana in the Meridian and Lauderdale County regions, hindering a clear assessment of local tax contributions.
Supporting Infrastructure and Workforce Growth
Mississippi also collected approximately $7.5 million in excise tax and permit fees related to medical marijuana during the 2024 fiscal year, with $7.4 million collected in fiscal year 2025. The state imposes a 5% excise tax on wholesale transactions between growers, laboratories, and dispensaries.
As the medical marijuana industry has evolved, an array of supporting businesses and practitioners has emerged. Records from the Mississippi Department of Health indicate that Lauderdale County is home to 10 active dispensary licenses, four caregivers, and 170 workers, alongside nine practitioners. There are currently 1,236 medical marijuana patient applications in the county.
Property Tax Increases and Future Speculations
Dwayne Davis, President of the Meridian City Council, noted a slight uptick in property taxes attributed to medical marijuana businesses investing within the city. For instance, Southern Crop, a $20 million cultivation facility, commenced operations in April 2023.
Both Davis and Norwood speculate that some of the investments reflect anticipation of future legalization of recreational marijuana or potential changes in federal drug policy. Recently, President Donald Trump announced that his administration is considering reclassifying marijuana from a Schedule I substance, which aligns it with drugs like heroin and LSD, to a Schedule III designation, which includes certain steroids and ketamine. Although marijuana remains illegal federally, this reclassification could alter tax structures and reduce operational costs for marijuana businesses.