Five Rules Approved To Expand Montana’s Cannabis Industry

The Economic Affairs Interim Committee, comprised of members of the state Senate and state House, convened on Monday, where lawmakers passed five changes to help resolve issues with the state’s cannabis industry, which were proposed by the Montana Department of Revenue. 

Montana was one of four states last year where voters approved measures at the ballot legalizing recreational pot (Arizona, South Dakota and New Jersey were the other three).

The law in Big Sky Country was officially codified in the spring, when lawmakers passed House Bill 701, which was then signed by Republican Gov. Greg Gianforte.

Notably, the legislation helped establish the HEART Fund, which uses revenue from the newly formed cannabis program to provide funding to substance abuse treatment. 

“Since January, we’ve been focused on implementing the will of Montana voters in a safe, responsible, and appropriately regulated manner. House Bill 701 accomplishes this,” Gianforte said after signing the bill in May. “From the start, I’ve been clear that we need to bring more resources to bear to combat the drug epidemic that’s devastating our communities. Funding a full continuum of substance abuse prevention and treatment programs for communities, the HEART Fund will offer new supports to Montanans who want to get clean, sober, and healthy.”

House Bill 701 empowered the Department of Revenue to oversee the new cannabis policy in Montana, which has led to the ongoing back and forth between the department and state lawmakers. In late October, regulators at the department unveiled rules for the forthcoming recreational cannabis marketplace encompassing more than a dozen different sections of the program: license, application and renewal fees; marijuana manufacturer licenses; marijuana cultivator licenses; marijuana dispensary licenses; marijuana transporter licenses; combined use licenses; marijuana testing laboratory licenses; marijuana storage facility endorsement; worker permits; general labeling requirements; labeling requirements for marijuana flower; labeling of ingestible marijuana-infused products; labeling of non-ingestible marijuana-infused products; labeling requirements for marijuana concentrates and extracts and packaging requirements.

The newly approved rules that were passed on Monday will allow tribal governments to scale up their operations via higher capacity licenses. When lawmakers first approved House Bill 701, each tribe was only given access to tier 1 licenses, which allows indoor cultivation space that did not exceed 1,000 square feet. Now each tribal government is allowed to obtain higher tier licenses. The highest tier is 12 under HB 701, which would allow up to cultivation spaces that do not exceed more than 50,000 square feet, according to Independent Record.

Under the new rules, however, outdoor grow operations are to remain at the same square footage. 

Not all Montana Lawmakers Supported the Rule Changes

While the clock was still ticking on Montana’s new cannabis law to take effect, lawmakers in the state were calling timeout.

Montana Public Radio reported that the state Department of Revenue “must send rules for the new industry to the Montana Secretary of State’s office” early this week, as it is the department’s “job to carry out that policy through rulemaking, but Republicans and Democrats on the Economic Affairs Interim Committee agree those rules need amending.”

Legislators there said “they want to take some more time to go through the rules that will govern those sales” that are scheduled to begin on New Year’s Day, according to local television station KTVH, as members of the Economic Affairs Interim Committee “voted to informally object to the current rule proposals from the Montana Department of Revenue.” That move would have intended to “delay the rulemaking process for a few days while lawmakers talk with the department and take a closer look at the proposals,” KTVH reported.

Lawmakers last week expressed concerns that some of the department’s proposals fell short. KTVH reported that Republican state Sen. Jason Ellsworth that he has concerns “about some of the provisions that he believes stray too far from what lawmakers intended with HB 701,” including “rules that would allow outdoor marijuana growers – otherwise prohibited but grandfathered in if they were already operating – to increase their cultivation space,” as well as a “a changed rule that would let marijuana dispensaries label their products with the word ‘cannabis’ instead of ‘marijuana.’”

“Since this is such an important issue for the state of Montana, it’s our obligation to make sure it’s 100% accurate, 100% within the intent of the Legislature – that our legislative intent is met for the people of Montana,” Ellsworth told the station “That is our job, and our job alone.”

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