Legal Recreational Cannabis Sales Begin in Montana

Customers spent over $1 million in just the first weekend with legal sales

Source: Shutterstock

When the calendar turned to read “2022,” recreational marijuana hit the shelves in Montana. Consumers wasted no time before getting their hands on the now-legal product, with pot sales topping a whopping $1.5 million after just the first weekend. Seeing that the stuff is taxed at a 20% rate, those sales generated $313,000 for the state. 

The Governor’s budget office estimates those numbers will climb to about $130 million by the end of the year and could be more like $195.5 million in 2023. That’s all on top of sales of medical marijuana, which is taxed at a 4% rate, and has resulted in over $430,000 of sales, generating $17,000 in sales tax revenue. 

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Individual locales can also implement a 3% sales tax. Yellowstone, Park, and Dawson Counties all plan to add that tax to both medical and recreational marijuana; Missoula County will have it for recreational only.

What to Expect

Voters chose to legalize adult-use marijuana in the November 2020 election, allowing adults over the age of 21 to possess up to an ounce of cannabis, up to 8 grams of concentrate, or edibles containing up to 800mg of THC. Montanans can also have up to 2 mature plants and 2 marijuana seedlings in their homes. The marijuana flower is capped at 35% THC, and packages of edibles cannot contain over 100mg of THC each. 

The Montana Cannabis Guild, a bipartisan team of industry professionals, former elected officials, and insiders in the political realm created Initiative 190, and now continue to fight for dispensary owners and consumers. 

“We couldn’t be more proud of this accomplishment, and its success only further demonstrates the striking failures of cannabis prohibition,” the Guild said after the bill’s passage and eventual implementation.

If you’re worried about your information being logged, you’re in luck; Montana’s laws dictate that dispensaries must check your ID to prove you’re over the age of 21, but they can only keep that record for up to 180 days and cannot share that information with the state or any third party. 

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Montana was comparatively speedy in giving customers access to legal recreational marijuana — it only took about a year. In 2021, the state legislature passed HB701, a bill saying marijuana would have to be available for recreational use by January 1st, 2022, and they managed to keep that deadline.

Republican Governor Greg Gianforte vowed when he signed the bill that cannabis in Montana will be controlled in a “safe, responsible, and appropriately regulated manner. 

Montana Governor Greg Gianforte sitting on a wooden bench in nature

Source: US House Office of Photography

HB701 also dictates how all the sales tax revenue will be spent. Some Democrats originally voted against the legalization of recreational marijuana because the bill, as written, doesn’t fund conservation programs they’d hoped to help with. 

A large portion of it goes to the Healing and Ending Addiction through Recovery and Treatment (HEART) Fund, a drug treatment program that gives out money the state earned through marijuana sales tax to different local organizations or non-profits that specialize in substance abuse care and prevention services.

The Governor’s office is hopeful that the HEART Fund, combined with tobacco settlements and federal Medicaid dollars could lead to a $25 million check headed each year to help with treatment of substance abuse. 

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To start, though, the first $6 million of sales tax revenue will go to HEART, aside from $500,000 going to Indian Health Services in Montana. Once the $6 million hurdle is cleared, the next 20% goes to the Montana Department of Fish, Wildlife, and Parks. That’s intended to help fund habitat for wildlife.

From there, 4% goes to State Parks, 4% to the maintenance for the Trails department, and 4% to Nongame Wildlife Programs and Accounts. The state has now set up an account for veterans and their surviving spouses, which will get 3% of the marijuana sales tax revenue. The Montana Board of Crime Control gets $150,000 even for crisis treatment training. Any remaining money is set to be put into the state’s General Fund. 

Accessibility 

Right now, only businesses that already had medical marijuana licenses before the November 3rd 2020 election will be allowed to sell recreational marijuana. That’s the case until July 1st, 2023, when new businesses can start applying for permits. Some industry leaders fear that could create some supply chain issues as the medical marijuana businesses try to increase their production by an enormous margin to keep up with the adult use demand. 

The Department of Revenue has 30 days to process applications once they’re submitted. Medical and recreational marijuana is allowed to be sold at the same site. There will be 13 different cultivation licenses, or “canopy” options for cultivation facilities of varying sizes. There are separate licenses for cultivators, manufacturers, dispensaries, transporters, and testing laboratories. Employees of marijuana-related businesses also need specific work permits.

The outside of the Flower Dispensary in Missoula Montana

Source: @FlowerMMJ

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Although Initiative 190 passed with a wide margin of 56% in favor and 43% against, recreational marijuana won’t be available everywhere in the state. Montana allows voters in so-called “red counties” to opt out of legal recreational sales. Voters can also choose later on to change their tune. 

Likewise, “green counties” (we assume no pun was intended) where the majority of voters in the area supported legalization will have marijuana for sale. That includes 29 counties in Montana, compared to 27 red counties. However, it should be noted that the red counties are largely rural, so 90% of the state’s population lives in green areas.

Those businesses will be allowed to be open from 9:00 a.m. to 8:00 p.m. and any sales will have to be put in a reusable plastic child-proof bag.

Problems Already Starting

Although legal marijuana sales for adults just started up, Montana’s Cannabis Control Division is already warning of a scam where people pretending to be with that agency convince people they owe money that has to be sent over immediately. The CCD says it will only focus on regulation and compliance while it carries out inspections, and that it will always go to those inspections in-person in state-issued vehicles, and that any problems with unpaid taxes will be discussed with the Provider, not demanded immediately. 

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