Montana Department of Revenue: “We are ready” for recreational marijuana launch

HELENA — Following months of preparation and planning, recreational marijuana sales in Montana are starting Saturday morning.

The big question for the Cannabis Control Division at the Montana Department of Revenue (DOR) is are they ready? “We are ready,” said Kristan Barbour, the division’s administrator.

House Bill 701, the main marijuana bill lawmakers passed during the 2021 legislative session, pushed the first day for sales back from Oct. 1, 2021, to Jan. 1, 2022.

Barbour said DOR would spend Friday — the last full day before the launch — implementing new licensing and tax systems and making sure marijuana providers’ systems at the point of sale are functioning correctly.

“There’s nothing at this point that would prevent it from happening — short of maybe a power outage where these systems just are down, and we do have protocols in place to allow for, if a power grid goes out, how these businesses can pivot and make sales and track that data separately,” she said. “We feel like we’ve tried to really address anything that could potentially happen, short of the things you just can’t guess.”

Starting Saturday, dispensaries that were licensed prior to Nov. 3, 2020, can begin selling marijuana to recreational customers over the age of 21, as well as licensed medical customers — as long as they’re in a county that allows adult-use sales. The tax rate will remain 4% for medical marijuana sales and will be 20% for recreational sales.

Barbour estimates about 380 dispensaries around the state will be eligible to start selling to adult-use customers Saturday, and they expect almost all of them to do so. She said the department is confident the system can handle whatever volume of sales they see.

One of the final pieces of the puzzle came into place last week, when DOR finalized the initial sets of rules for the recreational marijuana system.

“I would say we did get all of the critical components of House Bill 701 stood up in time under our rules for Jan. 1,” said Barbour. “We do know we have some important items that we need to address going into the first part of 2022. I think the most important part of that will be our packaging and labeling standards.”

Barbour says, for now, they’ll allow dispensaries to follow either the current labeling requirements for medical marijuana or the new policies set out in HB 701, until they have time to fully transition.

The department made several changes to the rules in response to public comment — notably removing a provision that would have banned the sale of CBD products in dispensaries and another that advocates worried could keep people with minor criminal convictions from working in the industry.

They also addressed some concerns from state lawmakers, including taking out a proposed rule that would have allowed some outdoor marijuana growers to increase their cultivation space.

Barbour said DOR will be monitoring for possible violations once recreational sales begin.

“Making sure that people are selling an ounce or less, we’re going to be really keeping an eye on that,” she said. “Making sure that they’re operating within the hours of nine A-M to eight P-M every day – really kind of watching for those baselines and anything that looks like it’s outside of that will certainly pique our interest to where we’ll do a further investigation.”

However, she said she’s optimistic there won’t be many egregious issues.

“From what we’re hearing from the industry and from what we’ve seen, everyone wants to do this well — they want to be successful at this,” she said. “This is their opportunity to really show that these are legitimate businesses who are following the law. So our concern is not whether they’re going to act out, it’s really just making sure that they know that we are checking and that we are holding people who aren’t going to follow the law accountable.”

Barbour said the department should have a basic idea of the volume of marijuana sales fairly quickly, but they won’t speculate immediately on how much of that will be recreational sales or how much it will translate to in tax revenues. Taxes will be due quarterly, so the first information on revenues will likely be available in April.