Montana Gov. Greg Gianforte (R) signed House Bill 701 into law on Tuesday. This legislation implements and regulates the voter-approved recreational marijuana program.
Last year voters approved legalization in a ballot initiative, I-190, allowing adults over 21 to use and possess cannabis for recreational purposes.
HB 701 also funds a substance abuse prevention program that the governor has championed since his first day in office.
The bill followed an exceedingly long path to arrive at the governor’s desk. HB 701 emerged among an abundance of other proposals towards the second leg of the legislative session.
On the last day of the session, the Senate considered and ultimately failed a proposal to alter the bill’s taxation and revenue allocation structure. The proposal would have also tightened the medical card requirements for medical cannabis patients.
Following legalization, retail sales of recreational marijuana will begin in January of 2022. The counties in Montana that voted for I-190 will have recreational marijuana in their borders by default. In contrast, voters in counties that did not vote for I-190 will need to take affirmative action to bring recreational marijuana into their boundaries if they so choose.
Marijuana Tax Revenue
Recreational marijuana will have a 20 percent tax, while medical marijuana will remain at a five percent tax. In addition, the regulation and operation of the marijuana program will move from the Department of Public Health and Human Services to the Department of Revenue.
HB 701 will create a special drug court. This court will handle reviewing and possibly resentencing past marijuana-related convictions.
Tax revenue will also help finance the HEART Fund. It is a drug treatment program that will allocate state money to local organizations and nonprofits to help fill the gaps in substance abuse care and prevention services.
“Funding a full continuum of substance abuse prevention and treatment programs for communities, the HEART Fund will offer new support to Montanans who want to get clean, sober, and healthy,” Gianforte said.
Allocation of Funds
The core of the debate centered around how much to tax marijuana and what to do with the money. I-190 laid out a plan for revenues from a proposed 20 percent tax to fund veterans services, park and trail maintenance, and the acquisition of conservation easements through Habitat Montana.
This initiative passed in 2020 with 57 percent of the vote, but it was challenged in court by Wrong for Montana. This group cited that only state legislatures have the constitutional authority to appropriate state funds. The suit is still ongoing.
During the session, lawmakers began drafting plans to spend and or save the money. Conservatives favored a plan to lower the tax, fearing a 20 percent tax would drive people to a black market. They also wanted to put revenues in an interest-bearing trust fund. The trust fund would be utilized later down the line for any adverse effects of legalization.
Democrats wanted to stay as close to I-190 as possible. They argued that if they changed too many provisions laid out in I-190, it would go against the will of the people and the ideals that govern Montana politics.
At first, HB 701 made some changes to the voter-approved measure. It made only minor investments in parks, trails, and non-game wildlife paid into the HEART Fund. The rest of the revenue will go to the general fund. But, through compromise, HB 701 restored part of I-190’s funding structure on a delayed schedule. It also revived many other provisions.
In a press statement, Gianforte said, “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.”
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