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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 among the four states where voters last year approved recreational marijuana legalization measures (Arizona and South Dakota were the others).

Big Sky Country’s law was codified when legislators passed House Bill 701, and it was signed by Republican Governor. Greg Gianforte.

Notably, this legislation created the HEART Fund. It uses income from the newly established cannabis program for funding 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 gave the Department of Revenue the authority to regulate the Montana’s new cannabis policy. There has been much back and forth between lawmakers and the department. The department’s regulators unveiled the rules for the upcoming recreational marijuana market in late October. They include license, renewal and application fees, marijuana producer licenses, marijuana cultivator licenses, marijuana transporter licenses, combined use licenses, marijuana testing laboratory licenses, marijuana storage facility endorsement, worker permits, general labeling requirements, labeling requirements, labeling requirements, labeling for marijuana flowers; labeling non-ingestible cannabis-infused products, labeling for concentrates, extracts, and packaging requirements.

Newly approved rules, which were adopted Monday, will enable tribal governments to increase their operation via larger capacity licenses. Each tribe had access to only tier 1, which allowed indoor cultivation spaces not exceeding 1,000 square feet, when House Bill 701 was first passed. Every tribal government now has the right to apply for higher tier licenses. According to HB 701, the highest tier would be 12. This license will allow for cultivation areas not exceeding 50,000 sq. feet. Independent Record.

The new regulations require outdoor grow operations to maintain the same area. 

The Rule Changes were not supported by all Montana lawmakers

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.”