New medical marijuana law draws millions in Mississippi investment

by Sara DiNatale, Mississippi Today
March 8, 2022

DeAundrea Delaney built a hemp empire in Mississippi, but her sights have long been set on opening one of the state's first medical marijuana dispensaries. 

As Delaney, 42, waited for Mississippi's medical marijuana program to clear legislative hurdles, she set up a foundation selling what she legally could: products with hemp-extract 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 left her job at an insurance office. Her husband was working at a Nissan manufacturing plant. The couple struggled to pay bills and build their savings while caring for their blended family of six children.

Selling CBD changed everything for Delaney's financial situation. Medical marijuana will too. And not just for her business, she said, but for the state. 

“We're on the cusp of a green economy here,” Delaney said from inside a new Hemp World shop she helped open in Olive Branch last week.

To her, that “green” economy refers to all the new jobs and revenue that will soon come into Mississippi to support the medical marijuana industry. With Mississippi's medical marijuana program just months from becoming reality, Delaney and other entrepreneurs are investing hundreds of thousands — even millions, in some cases —  to create the needed infrastructure to support it. 

Mississippi health board members said regulations for the program will be set by July. The state's deadline to begin issuing licenses for dispensaries and cards for patients is the following month. Growers have estimated medical marijuana could be available to patients as early as this fall. Most agree 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 growing and product manufacturing businesses. “People who have gained experience in other states where it's legal will gravitate and migrate to Mississippi because there's better opportunities in a new state.” 

That would be a change of pace for Mississippi, which was one of only three states with a population decline since 2010, according to the latest U.S. Census. 

Patterson saw the way medical marijuana impacted his home state of Oklahoma, where he started his businesses. Once-abandoned warehouses and factories are going to have second lives as hydroponic grow houses. Property values overall will go up, he said. 

His company's Mississippi operation — Mockingbird Cannabis, named for the state bird — has taken over a 163,000-square-foot building that once housed the state's Department of Revenue in Clinton. Mockingbird has invested $30 million in the facility, Patterson said, and it will support up to 200 new jobs. 

Delaney says her experience with CBD and hemp shows how transformative medical marijuana could be for Mississippians as a pathway to wealth in one of the country's poorest states. 

Delaney and her husband run two CBD shops in Pearl and Jackson. She also has set up six other shops with entrepreneurs through 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 has said it plans to begin accepting applications in June. 

Medical marijuana products will fall under the state's existing 7% sales tax. 

Delaney followed how other states legislated medical marijuana with hopes she will be able to easily transition her CBD shops to dispensaries. For example, she ensures shops aren't opened nearby schools or churches — something the new law prohibits. 

Now, it's just a waiting game until the health department releases further specifications. 

It's been an uncertain road for Mississippi's could-be medical marijuana patients and businesses. 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, spokesman for the Mississippi Cannabis Trade Association. “People were kind of worried about their investment not going anywhere.” 

Last month, Gov. Tate Reeves signed the Mississippi Medical Cannabis Act into law.
Now the trade association is receiving dozens of emails and phone calls each day from Mississippians wanting a slice of the medical marijuana business.

Out-of-state investment is already here. Grow Generation will open its 64th U.S. location in Jackson by the summer, according to company president Michael Salaman. The publicly-traded company is based in Colorado. Its locations sell growing supplies and tools like a Home Depot for the cannabis industry across 13 states — 14 with the Mississippi store.

Salaman said the 40,000-square-foot store and showroom inside an old restaurant supply warehouse will open this summer and house upwards of $3 million in inventory. Within 12 months, he said, there will be two other locations. His team is already scouting properties on the Gulf Coast and near the Tennessee border. It will be the company's first entry into the Southern market. 

Salaman estimates it will have 50 to 100 new employees in Mississippi from store and warehouse managers to sales people and truck drivers. 

“We're going to bring in growers and educational training,” Salaman said. “We provide not only the products but the knowledge so growers are successful.” 

Mississippi's bill allows micro-growers to receive licenses for as little as $2,000 a year with a $1,500 application fee. The costs are tiered in six levels based on a growing facility's size.

“As far as the cannabis business goes, that's pretty good,” said Robinson. “It's advantageous to smaller businesses and entrepreneurs.” 

Large cultivators with more than 100,000 square feet of growing space will have to pay a $60,000 application fee and $150,000 annual license fee. The dispensary system, however, isn't tiered. Business owners like Delaney will have to pay $15,000 to apply for a license to sell and an annual fee of $25,000, regardless of the businesses' size. 

That can be a barrier of entry, Delaney said, which is part of why she created the Hemp World partnership program to help others get shops off the ground. It's been a way for her to support the Black community. She's also the Mississippi chapter president for Minorities for Medical Marijuana. 

“We're not represented, more so incarcerated,” Delaney said, referring to Black Mississippians. “We're disenfranchised, so we need a stepping stone to get into the industry.” 

The new law does look out for Mississippi entrepreneurs rather than set up a system that could funnel profits out of the state. All marijuana and related products, from gummies to oil, have to be grown and made in Mississippi. 

Patterson says at least 80% of his anticipated hires will be current Mississippians. The positions range from $17-per-hour warehouse jobs — well above the state's $7.25 minimum wage — up to salaried executive positions. 

The closer Mississippi's program is to fully operational, the more ancillary businesses will pop up — like high-end security and transportation services to waste disposal companies. 

“The changes are going to be dramatic,” Patterson said. “I think that's going to have ripple effects for the whole state … That's additional money in the budget. I know that's the hope, that they can create new tax dollar revenue to give back to the people.” 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.