Montana lawmakers not yet approving funding for recreational marijuana preparations

Posted at 6:41 PM, Jan 11, 2021
and last updated 2021-01-12 11:22:38-05

HELENA — Last week, Montana lawmakers decided not to approve a state agency’s request for more than $1 million to help prepare for recreational marijuana sales. However, that is likely only a first step as the Legislature deals with the broader issues around legalization.

On Monday, the Montana House approved House Bill 3 – a “supplemental funding” bill that authorizes state agencies to spend additional money this fiscal year.

The bill passed without the Montana Department of Revenue’s request, which would have provided funding to help the agency start getting ready for legal sales. Last Wednesday, the House Appropriations Committee voted to remove that funding from HB 3.

“This was – in my view at least – unexpected, and it was a big number,” said Republican Rep. Bill Mercer of Billings, who requested the change. “We wanted to get some justification in terms of why this much, how many [full-time equivalents] are you talking about on a transitional basis, and then what does this mean for the longer term.”

The department initially asked for $1.35 million, but Mercer said they later adjusted that amount down to about $1.066 million. The money would have been used to hire about 20 new employees to work on the recreational marijuana program and for other expenses. One notable item would have been about $250,000 to set up a secure “cash drop room” where marijuana businesses – the vast majority of which operate only in cash – could deposit their taxes.

Montana voters approved Initiative 190 last year. It set up a legal framework for a recreational marijuana system, giving the Revenue Department to regulate sellers and collect a 20% tax on sales. The measure calls on the department to create rules and start taking applications for recreational marijuana retail licenses by Oct. 1.

Mercer said he appreciated why Revenue made the request.

“We’ve got to have some runway in order to be able to land this thing later in the year,” he said. “It would have been irresponsible for them not to come forward.”

Still, he argued there were too many unknowns about what the Legislature will do with marijuana laws.

“I think we thought we need more time to really sort through what’s needed, on what timetable – and do we stick with the timetable in the initiative, or do we say, ‘Well, if this is going to be too much, too fast, do we try to extend the time period that was set forth in the initiative?’” Mercer said.

Last week, Gov. Greg Gianforte – who opposed I-190 during the campaign – said his administration planned to “recognize the voters’ wishes” and allow recreational marijuana sales to go forward. However, he announced they plan to redirect the tax revenue to addiction recovery services and economic development. The initiative called for the money to go toward things like conservation and veterans’ programs, but Gianforte said a ballot measure can’t stop the Legislature from appropriating money how it chooses.