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End-of-session Marijuana Bills In Montana Provide Mixed Feelings

In the waning days of the 2023 Legislature, lawmakers passed a handful of bills that — if signed into law by Gov. Greg Gianforte — will have large impacts on the adultuse recreational cannabis industry in the state.

Some new policies — like an extended moratorium to prohibit new businesses until 2025, and new leniency with THC testing for edibles — could help bolster the industry. But others, like an enormous hike on license renewal fees, could make the industry more difficult for businesses to navigate. Over the course of the session, the Legislature also put the kibosh on a handful of bills that would have had enormous consequences for the industry, most notably Kalispell Republican Sen. Keith Regier’s Senate Bill 546, which would have fully eliminated adult-use cannabis dispensaries in Montana.

Between the 2021 and 2023 legislative sessions, the Economic Affairs Interim Committee crafted a list of proposed updates to House Bill 701, the cannabis industry framework bill passed by the 2021 Legislature.

This session’s House Bill 128, sponsored by Rep. Josh Kassmier, R-Fort Benton, serves as a vehicle for many of those updates.

Notably, it extends the existing 18-month moratorium on new cannabis business licenses by two years. Only after June 30, 2025, will new businesses, including out-ofstate entities, be able to open up shop in Montana. Per HB 701, only Montana’s existing medical marijuana providers currently have a greenlight to sell recreational marijuana.

House Bill 128 also clarifies complications in HB 701 regarding automatic combined- use retail and cultivation licenses for tribes in Montana. Per HB 128, tribes now have the go-ahead to open facilities that can expand over time. The bill currently awaits approval by the governor.

While HB 128 specifies when the moratorium on new licenses ends, House Bill 903, sponsored by Rep. Mike Hopkins, R-Missoula, clarifies when it began.

While Initiative 190, the 2020 ballot measure that Montanans passed to legalize adult-use cannabis, said the state would initially allow only existing medical marijuana providers to obtain a license to sell in the adult-use market, it did not include an explicit deadline for businesses to acquire a medical marijuana license and thus become eligible for an adult-use license as well.

HB 701 established Nov. 4, 2020 — the date of the election — as the cut-off. But the bill went into effect after 45 businesses applied for licenses following the election.

HB 903 extends the start date of the moratorium to April 27, 2021, and thus allows 16 of those businesses — those that applied for a license before April 27, 2021, and have since been stuck in a state of limbo — to begin selling adult-use cannabis. The other 29 businesses — which applied for licenses after April 27, 2021 — can sell only medical marijuana for the time being.

According to Kristan Barbour, administrator of the state Department of Revenue’s Cannabis Control Division, the 16 businesses will have a greenlight to sell recreational cannabis as soon as Gianforte signs HB 903, or allows the bill to become law without his signature.

“Once the bill is considered law, we will manually go in [to departmental software] and change those 16 businesses to be able to sell adultuse,” Barbour told Montana Free Press.

“Having this wrapped up will be totally amazing,” Kaari Fulton, co-owner of one of those businesses, Armadillo Buds in Glendive said.

The new bill includes other provisions that are more costly to the industry.

For one, it changes the state’s formula for calculating license renewal fees. While marijuana businesses currently pay a flat $5,000 annually to renew the licenses for their stores, HB 903 charges a cumulative $5,000 per additional location. In other words, it will cost a business an additional $10,000 to renew its license for a second store, an additional $15,000 to renew a license for a third store, and so on. The Department of Revenue estimates the new policy will generate an additional $4 million for the state this year, with $1 million coming from the state’s largest provider, Bloom, alone.

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