Montana just changed its marijuana law. Here’s what you need to know
After months of high-stakes legislative drama, adult cannabis is actually finally coming to Montana. Retail sales are slated to begin on January 1, 2022.
Retail sales are slated to begin on January 1, 2022.
Montana Governor Greg Gianforte (R) signed HB701 today, achieving a tremendous cannabis reform victory that was far from guaranteed.
Although voters passed a statewide adult use measure, Initiative 190, last November by a margin of 57-43, the state’s Republican lawmakers, who control both houses, worked for months to get the initiative through their own legislation replace. While its original design was crippling with limitations, it was heavily modified by a Senate committee.
Despite last-minute efforts by House Republicans to rewrite much of the bill and dismantle the state’s medical program, the final draft signed by Gianforte generally follows the initiative’s focus on small business and allocates a good portion of the revenue as well public land protection.
“I’m feeling really good about it,” said Rep. Mike Hopkins (R-Missoula), the bill’s sponsor, to Leafly. “The legislative process worked, although from the outside it can sometimes seem chaotic when you look inside.”
Locals have a head start in the market
In an express effort to give current Montana pharmacies a temporary advantage over non-state actors, the new law provides for an 18-month moratorium on all new licenses. After the moratorium expires, new licensees are limited to a small Tier 2 license, which limits the amount of cannabis they can grow.
Adult licenses are only available to locals for the first 18 months.
In addition, new licensees must prove that they have lived in Montana for one year in order to apply at all. That being said, nothing prevents a NGO from buying an existing business from a current Montana resident.
Pepper Petersen, who led the legalization campaign and is now CEO of the Montana Cannabis Guild, told Leafly he was happy with the result. “It’s an even field,” he said. “Everyone from outside the state has to go through the same things that we had as residents.”
Tribes distributed eight licenses
One of the most innovative features of the new law is a provision that automatically assigns a comprehensive license to each of the state’s eight indigenous tribes. “We tried to get them an open door so they could get their feet wet and finally get into business,” said Senator Jason Small (R-Busby). Small is a member of the Northern Cheyenne Tribe and was instrumental in the passage of the determination. “There are quite a few opportunities to earn money.”
No vertical integration required
The Montana market is being integrated horizontally, which means that not every license holder has to do everything: grow, process, manufacture, and sell. Any company can streamline its operations and focus on what it does best. Farmers can only farm, retailers can only sell.
Farmers can only farm, retailers can only sell. Or both. The new law allows companies to do what they do best.
“It’s hugely wasteful when every vendor has to buy the same equipment and try to learn the skills to use it safely and develop a decent product,” said Jay Bostrom, co-owner of Dancing Goat Gardens, the Missoula store hat and havre. “Let those with interest and experience focus on their niches.”
Half of the counties in the state have deregistered
The licensing structure of the program has one major catch: the counties that didn’t vote for Initiative 190 (roughly half of Montana) will have to do a separate vote to enroll in the program.
Has your county deregistered? Check now or you will be disappointed on opening day.
This is a compromise from the original bill that required all counties to register and companies had to purchase a vague and arbitrary “Certificate of Good Standing” in order to obtain a license. Tribal licenses are valid anywhere within 150 miles of a reservation’s outer boundary, which Sen. Small hopes to guarantee their validity.
New frontiers for advertising
The opt-in policy isn’t the only restriction that survived the original bill. The packaging and advertising of cannabis is subject to significant restrictions. Cannabis brands can only reach consumers through digital ads, either on a shop’s website or through a website like Leafly (thanks to a separate invoice).
Home builders: know your new limits
The new law also contains new restrictions on who can grow what and where. Only existing open-air cultivation areas are permitted for licensed commercial producers. All others need to grow indoors. (Greenhouses and tire houses are considered “indoor” growth.) Individual residents are only allowed to grow two plants at home, with a maximum of four plants per household.
Mild potency caps, nothing extreme
There are also some slight potency restrictions in the mix. Flowering is limited to 35% THC, and foods are limited to 100 mg per pack, using no more than 10 mg per serving, which is a common industry standard. Most other products, such as vape carts and tinctures, cannot contain more than 800 mg of THC.
“What more could you ask for?” said Marc Lax, the CFO of Spark1, a pharmacy chain with branches across the state. “That seems very workable and very reasonable.”
Cannabis tax: maximum 23%
Customers are subject to taxes in the middle of the street. The new law provides a flat 20% cannabis excise tax on all purchases. Individual counties may add an additional 3% local tax.
Opponents of the bill have denounced these taxes, warning in recent hearings that they could fuel the illegal market and attract an influx of unlicensed products made by Chinese, Mexican, Vietnamese and Cuban drug cartels.
However, the most recent tax bill for the program assumes the state’s cannabis industry will generate at least $ 51 million in tax revenue by fiscal year 2025. 20% of this proceeds will be invested in public land conservation starting in 2023, $ 6 million in support of a new drug abuse treatment program sponsored by Governor Gianforte.
“I think the money is very fairly distributed,” added Spark1’s Lax. “I think it’s fantastic.”
A successful defense of the legalization vote
While the final version of HB701 comes pretty close to the electoral initiative, the legislature’s willingness to outrageously override the will of the people has raised concerns among citizens and lawmakers that may not resolve anytime soon, especially in the face of other anti-democratic measures that the legislature has taken this year.
For now, however, cannabis users, farmers, manufacturers, and retailers can finally breathe a sigh of relief.
“It took a long time,” said Petersen of the state cannabis guild. “We knew that [prohibitionist] Legislature came and there was a lot of fear about what we were up against. Many of these fears have been fulfilled. I feel good that we negotiated well with HB701, but I know we are not done yet. “
Max Savage Levenson
Max Savage Levenson probably has the lowest cannabis tolerance of any writer on the cannabis beat. He also writes about music for Pitchfork, Bandcamp and other people with glasses. He is the co-host of the Hash Podcast. His dream interview is Tyler the Creator.
Show article by Max Savage Levenson