A recent report published by the Associated Press has revealed that Montana lawmakers turned down a $1.35 million budget request to fund the largely conservative state’s adult-use cannabis market. The news is sure to spark frustration regarding the program’s unreliability in meeting deadlines.

Montana’s state revenue department requested the funding as a means of establishing a department with 20 full-time employees. The request was rejected by the House Appropriations Committee with a vote of 23-2. 

Former U.S. attorney and Republican state Rep. Bill Mercer is believed to have dubbed the money request  as a “huge tranche of money”. Mercer even went as far as to have the money request spurned by sponsoring an opposing amendment.

Following the recreational cannabis budget’s dismissal, Republican Gov. Greg Gianforte’s budget director, Kurt Alme, claimed that the money was essential to preventing missed deadlines for Montana’s adult-use cannabis program, which was voted into law via a ballot initiative in November.

An overview of Montana’s recreational cannabis law

During the Election Day that took place on November 3, 2020, Montana was joined by Arizona, New Jersey and South Dakota in legalizing adult-use cannabis. State voters approved a pair of ballot initiatives – the Marijuana Legalization Initiative (“Montana I-190”) and the Allow for a Legal Age for Marijuana Amendment (“Montana CI-118”) – that essentially triggered the launch of a recreational market catered towards adults 21 and older.

The new recreational cannabis regime would enable residents to possess a maximum of one ounce of cannabis. Conversely, adults of legal age could possess up to eight grams of cannabis concentrate. Personal consumption to the amount of four plants would also be permitted under Montana’s adult-use cannabis measure.

Although the green plant would be legal for recreational purposes, employers would still be able to enforce drug policies. Moreover, public use of the plant would be forbidden, unless designated places have been specified as “cannabis-friendly” zones by local jurisdictions.

Employment, taxing and revenue for Montana’s recreational cannabis law

All recreational cannabis in Montana must be sold via licensed vendors, of whom will be required to impose a 20 percent tax on sales. Approximately 10 percent of tax revenue generated through the state’s adult-use program will be used to strengthen the general state fund. The remainder of tax revenue will be “dedicated to accounts for conservation programs, substance abuse treatment, veterans’ services, health care costs, and localities where [cannabis] is sold.”

Estimates from the measure’s authors and proponents suggest that by 2025, legalization could harvest around $48 million in annual tax revenue and licensing fees for the state. Furthermore, the committee that fronted the campaign for legal weed, New Approach Montana, previously cited a University of Montana study that pins the estimated tax revenue at $236 million by 2026. Within the first year of legal recreational sales, the university foresees sales surpassing $217 million. 

Although the ballot approval of Montana’s adult-use cannabis initiative might seem promising,  numerous state legislators have confirmed that they are in the process of drafting a bill that could potentially rescind the measure. Based on details of the initiative, license applications must be accepted on or before January 1, 2022. Sales are anticipated to kick off towards the end of 2022 or in early 2023.