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Montana Races to Iron Out Recreational Cannabis Rules and Regulations

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Montana’s recreational cannabis sales are set to start on January 1, but regulators and retailers still haven’t finalized a number of details that will determine the marketplace’s initial success.

Brian Monahan, co-owner of Greenhouse Farmacy, discussed the difficulty with Montana Public Radio. “I feel like I’m in a hamster wheel. It’s constant.”

Currently, Monahan is working to convert his medical marijuana dispensary into a recreational one. With anyone over the age of 21 allowed to purchase cannabis, he estimates that his sales could triple next year.

In order to accommodate the rapid change, he’s been boosting up production, updating floor plans, establishing new sales kiosks, and upgrading the space’s parking lot.

“It’s almost just like a marathon runner at the end of a marathon,” he says. “It’s like, just a couple more miles and it’s there.”

On January 1, cannabis will officially be legalized for recreational use. However, sales will only be legal in about half of the state counties – places where voters approved the ballot measure for adult use. Furthermore, residents of these counties voted on how much cannabis should be taxed.

In fact, taxes are one of the biggest debates right now for Montana’s industry, with places scrambling to figure out how much to tax these products. For example, in Missoula, Park, and Yellowstone counties, a three percent local tax has been placed on recreational marijuana alongside the state-mandated 20 percent tax. Not to mention, Park and Yellowstone both decided to increase taxes on medical marijuana.

Due to this, marijuana sales are likely to differ from county to county and it goes beyond tax revenues. For example, in places like Billings or Missoula, they’re still determining how many storefronts to allow and how they want to manage those businesses.

As Kristan Barbou, head of the state revenue Department’s Cannabis Control Division, notes: “I think what we’re hearing from local governments is a real interest in making sure that they control their particular area with what their citizens want to see.”

Working Out the Finer Details of Legalization

Montana isn’t the first state to have a rush in patchwork approach to their cannabis sales. In fact, it’s quite common due to disputes between policymakers, regulators, and those involved in the industry.

‘It’s not unique at all,” says Aaron Smith of the National Cannabis Industry Association. “There are certainly a lot of complex issues to sort out. Mistakes will be made along the way, as we have seen in other states. What’s important is making sure that the will of the voters is advanced, and I think Montana’s on track for that.”

There are still a few rules that need to be sorted out. For example, the legislation claims those who hold a cannabis license are banned from selling CBD products on premises. As you can imagine, this isn’t going over well with both dispensary owners and cannabis enthusiasts.

Another initiative has asked the Revenue Department to reassess who would be allowed to work in cannabis shops.

Even through all these challenges, most expect Montana’s cannabis industry to be extremely profitable, making millions for the state in tax revenues.

“I think we’re going to see the opt-out counties come to the Legislature in 2023 saying, ‘we want some of that damn money,’” says Pepper Peterson of Montana’s Cannabis Guild. “We’re going to fight for that. If you don’t participate, if your county does not allow sales, you shouldn’t get any of the money.”

While it remains too early to tell, the University of Montana Bureau of Business and Economic Research predicts Montana will produce $200 million in recreational sales next year.

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