The structural question comes first
A brand that owns product and sells it through a licensed channel is likely trafficking for 280E purposes. A brand that licenses intellectual property to a Missouri manufacturer in exchange for a royalty, without ever taking title, sits in a different position.
That difference is worth more than any other decision a brand makes, so we analyze and document it before the arrangement is finalized rather than afterward.
Co-packing and production partnerships
Most Missouri brands produce through a licensed manufacturing partner. The agreement determines whether the brand carries inventory, who bears yield risk and how cost of goods is computed for margin purposes.
- Toll processing versus purchase-and-resale treatment
- Inventory ownership and risk of loss during production
- Cost transparency provisions that make unit economics knowable
- Royalty and licensing fee structures with supporting valuation
Brand economics
We track contribution margin by SKU after all trade spend, so a brand can see which products actually earn shelf space in Missouri retail and which are being carried by the rest of the line.
Distribution and receivables
Selling into dozens of dispensaries across Kansas City, Columbia and Springfield creates receivables risk concentrated among customers who face their own cash pressures. Credit policy and collections cadence belong in the finance function, not in sales.
Frequently asked questions
Can a Missouri brand deduct marketing spend?
Only if the brand is not itself trafficking. A licensing structure that avoids taking title to product may support ordinary deductions, but the arrangement must be genuine and documented.
How should royalty rates be set?
At arm's length, supported by comparable arrangements and documented in a written agreement. Rates set for tax convenience rather than commercial logic invite challenge.
