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Montana Lawmakers Send Mixed Bag Of Marijuana Bills To Governor’s Desk

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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.

By Max Savage Levenson, Montana Free Press

In the waning days of the 2023 Legislature, lawmakers passed a handful of bills that—if signed into law by Gov. Greg Gianforte (R)—will have large impacts on the adult-use 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.

Read on for a rundown of the marijuana bills that made the cut and those that fell by the wayside.

Two More Years Of Homegrown Business

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), 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-of-state 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.

New Restrictions, Fees And Moratorium Dates

While HB 128 specifies when the moratorium on new licenses ends, House Bill 903, sponsored by Rep. Mike Hopkins (R), 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 November 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 adult-use,” 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, told MTFP.

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.

HB 903 also allows the state board of medical examiners to review the license of any physician who writes more than 39 medical marijuana certifications a year.

Hopkins did not respond to multiple requests for comment for this story.

Bill Bans Synthetic Marijuana In Montana

This session, Rep. Steven Galloway (R), sponsored House Bill 948, which outlaws the manufacture and distribution in Montana of synthetic marijuana products including Delta-8 THC and HHC. The products, which are federally legal, are typically derived from legal CBD found in hemp plants. Their effects are analogous to those of marijuana, though many consumers describe Delta-8 THC, the most popular of the products, as “marijuana lite.”

Current law does not subject synthetic marijuana gummies, vape cartridges and other products to the testing or regulations applied to cannabis. A business needs no particular license to sell them, though marijuana businesses may not offer the products.

The bill will go into effect immediately following the governor’s signature.

New Leeway With Edible Potency

House Bill 229, also sponsored by Hopkins, allows for a 10 percent deviation in permissible THC quantity in edibles. It is pending the governor’s approval.

“It’s expensive and inefficient for both manufacturers and laboratories to not allow for variance in a manufactured product,” Andre Umansky, co-owner of Missoula-based testing lab Fidelity Diagnostics, told MTFP. Under current law, an edible product that tests even marginally above the allowed amount—100 milligrams of THC per package, or 10 milligrams per serving—has thus failed its safety test.

“Variance depends on safety. With a 10 percent variance [in a serving], one milligram is not going to make you or break you. It’s like a glass of wine with 10 percent alcohol versus one with 11 percent alcohol,” Umansky said.

New Funding Still Up In The Air

Late in the session, the Senate voted 48-1 to pass Senate Bill 442, which would divvy up recreational marijuana tax revenue between the General Fund, county road construction and maintenance, conservation and recreation programs, addiction treatment and veterans services. Gianforte subsequently vetoed the bill. Sponsor Sen. Mike Lang (R) is currently mulling an attempt to override the veto.

Lawmakers Table Repeal, Advertising Ban, Medical Marijuana Tax And Smell Test

Lawmakers this session also threw cold water on a handful of bills that would have drastically impacted the industry.

In addition to Regier’s SB 546, which was tabled in the Senate Business and Committee, the same committee declined to pass House Bill 351, sponsored by Rep. Kerri Seekins-Crowe (R). The bill would have outlawed most forms of cannabis advertising in Montana, including online ads, radio ads, print ads, oral communications and more.

The House Taxation Committee killed another Hopkins bill, House Bill 420, which would have eliminated the existing four percent state tax on medical marijuana.

Lastly, after multiple attempts to revive it, the Senate allowed House Bill 304, sponsored by Rep. Jeddiah Hinkle (R) , to die in process. It would have required marijuana growers to limit the odor they allow to spread into surrounding areas.

This story was originally published by Montana Free Press at montanafreepress.org.

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