Last week, Montana lawmakers met to discuss three different bills on adult-use cannabis legalization. Each bill would act as a sort of amendment to voter approved I-190 measure passed by 54 percent in November 2020’s general election. Some miscommunication led to each bill almost dying in separate committee hearings. But two committees joined together to bring these bills back for a full House discussion and vote.

House Bill 701

This bill is the flagship of the three bills. It would allow for the creation of the adult-use cannabis program I-190 calls for. However, there are some major differences. HB 701 diverts most tax revenue to the state’s general fund, not back to the communities and environmental sustainability like voters approved. Plus, a 20 percent sales tax would go on every sale in the state. The bill became part of the House Taxation Committee.

This part became a huge contingency for many Democrats, who agreed to blanket reject the bill. Without democratic support, many GOP members joined in the rejection of HB 701 as well. They could be against recreational legalization, or they simply thought the measure needed more time. After all, Montana had a difficult time implementing their current medical cannabis program despite medical cannabis being legalized in 2004.

Unfortunately for HB 701, along with the other bills introduced involving recreational cannabis use, they were simply introduced too late into the session. Lawmakers took too long nitpicking a bill together instead of following voter approved measures to get a bill moving through Montana’s Congress faster.

House Bill 670

Across the hall in the House Business and Labor Committee, HB 670 was being heard. DIfferent from HB 7010, HB 670 only placed a 15 percent sales tax on all recreational sales, but would slightly increase the tax on medical cannabis to compensate. Additionally, revenue would go to paying down public employee pension obligations, plus create a trust fund for “economic and social costs” of legalization. This measure passed with a vote of 11-9.

House Bill 707

The third bill in discussion, HB 707, would only tax wholesale cannabis at 20 percent. This system is similar to the state’s alcohol structure, something that has proven to work and can work for cannabis as well. It’s unfortunately a complete overhaul of I-190’s tax structure, leading the bill away from what voters’ approved. This bill failed in the House Business and Labor Committee. 

Legal Concerns

If HB 670 became approved and HB 701 didn’t, then variety in plans and discussion wouldn’t happen among lawmakers. Apparently, that was the whole point of these three bills, to offer a variety of options to lawmakers to pick and choose from. 

“We wanted more options, that’s what the whole thing was about,” Representative Mark Noland (R) said. He’s currently the House Taxation Committee Chairman. “More options gives we the people better chances. Some don’t like one of those bills. Some have hiccups with the big bill. If we get everything moving, then we can discuss all of these bills.” 

After both the Taxation Committee and the Business and Labor Committee realized the mistake they had made in tabling two of the three cannabis measures, they reconvened and voted to undo their last move. 

As of now, all three bills – HB 701, HB 707, and HB 670 – will be brought before a full House chamber for discussion and vote. There are talks that discussion could start as early as this upcoming Thursday April 8th.

Public Response

With confusion in the committees, public response hasn’t been favorable towards lawmakers. Even medical cannabis dispensaries are upset by how everything is currently being handled. To them, HB 701 is simply a show of power for Montana lawmakers. I-190 will begin one way or another. However, lawmakers want their hand in it to make sure stricter rules are in place. Plus, further needed limitations can be added later on. 

Plus, HB 701 makes it incredibly easy for counties and municipalities to opt-out of legal cannabis. It will keep prohibition in place despite a state-wide legalization bill voters approved. 

As more information develops, we will be sure to update you with the latest. Make sure to check back for more cannabis and hemp related news.