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Montana’s recreational marijuana bill rolls through Senate

HELENA — Months after voters passed a ballot measure legalizing recreational marijuana, state lawmakers have advanced a single bill to regulate and tax the drug, as well as direct the revenue from those taxes.

Millions of dollars will pour into the Department of Revenue to hire 34 new employees to run the program. After that, $6 million a year goes to Gov. Greg Gianforte’s Healing and Ending Addiction Through Recovery and Treatment, or “HEART” Fund.

When that fund is filled, about $5 million will go toward conservation efforts, including the Habitat Montana fund, which allows the state to buy land for conservation. 

Democratic leaders said the addition of funding for Habitat Montana helped bring Democrats on board for the bill, which has been primarily pushed by Republicans. Sen. Jill Cohenour, D-East Helena, spoke at a press conference Friday morning.  

“Us putting the select committee together — I think we got a lot of the work done that I think that the House really wanted to do before it came over — and what they were unable to do,” Cohenour said.

After numerous delays due to a COVID case at the Capitol and the amendment-drafting process, the committee elected to take an amended version of House Bill 701 to the Senate floor for further debate Wednesday. They passed it back to the House Friday.

House Bill 701 was the lone bill to come out of a special committee tasked with making a plan to implement the rollout of recreational marijuana.

To get to this compromise bill, lawmakers sorted through three bills that would have provided for adult-use recreational marijuana.

Lawmakers started meeting as part of a special committee Monday, April 13 under the looming shadow of the Legislature’s last days to determine the direction of Montana’s recreational marijuana program.

Sen. Jason Ellsworth, R-Hamilton, was the chairman of a special committee on marijuana law.

The bills in play differed in how they taxed marijuana and where the money from those taxes would have gone. One would’ve sent the money to a special account. Another would have sent it all to the general fund and the third would have divided the money up into several different accounts. 

Reps. Derek Skees, R-Kalispell, and Matt Regier, R-Kalispell, presented House Bill 670. Skees said his implementation bill was the most level-headed one because it doesn’t immediately begin appropriating money, something he faulted his fellow lawmakers for.

“We’re all salivating at the mouth,” Skees said. “How do we grow government? How do we pay for programs? How do we pay for pensions? How do we pay for this with all this new revenue the state’s going to get? And I suggest that that’s a plan for failure.”

HB 670 would have established a trust fund with a third of marijuana tax revenue. The state could pull from the fund to cover the “economic and social costs” of recreational pot. The rest of the money would have been sent to cover pensions for public employees. 

The committee tabled HB 670 on Monday, April 19.

Missoula Republican Rep. Brad Tschida, R-Missoula, presented House Bill 707, which he said intended to treat marijuana in the same way the state treats liquor: with tax collected on wholesale and a single central warehouse. 

The committee tabled Tschida’s bill the same day they heard it. 

Missoula Republican Representative Mike Hopkins presented House Bill 701, the longest of the bunch at 144 pages. His bill has the governor’s approval.

The three implementation bills needed to be distilled into a single package, and lawmakers considered pulling parts from HB 670 and HB 707 to add to 701.

If the committee didn’t roll out their own implementation bill, the text of Ballot Initiative 190, or I-190 would have been Montana’s implementation plan. 

From the very start, the question has been where and how to spend the money recreational pot generates — and who gets to make those decisions. 

During previous debates, lawmakers have questioned the legality of parts of that initiative, specifically the sections which allocate money to special revenue accounts to be used for conservation efforts. 

Rep. Bill Mercer, R-Billings, for instance, presented a bill that would have directed all of the marijuana money to the state’s pension fund. He made the case for legislative control.

“So if what was done here is, in fact, impermissible, then why would we grant it any deference whatsoever? We have to make the judgement about how these dollars are going to be spent,” Mercer said. 

However, a University of Montana law professor disagrees.

Anthony Johnstone is the Helen and David Mason Professor of Law and Affiliated Professor of Public Administration and Policy at the Alexander Blewett the Third School of Law at the University of Montana. 

Johnstone said there’s precedent for initiatives like I-190. 

“So the Montana constitution prohibits initiatives from appropriating money. The work-around that proponents of initiatives have used for decades,” Johnstone said, “is to allocate money to funds that are single-use funds.”

He said the monetary concerns have already been answered by previous case law. 

“This has been litigated for decades,” Johnstone said. “As long ago as the 1950s, there were initiatives that raised revenues from tobacco funds, but instead of appropriating those revenues … it used this device of creating special revenue funds in state government that were not appropriated but were subject to appropriation for limited purposes.”

A group called Wrong for Montana, which opposed the initiative, filed a lawsuit against the state the day the initiative passed, saying the initiative is an appropriation of money.

Some lawmakers have prepared for the Montana Supreme Court to overturn I-190. Rep. Derek Skees, R-Kalispell, introduced two different amendments asking for “contingent voidness.” He explained the term to the special Senate committee on Monday, April 12.

“This thing is totally unconstitutional the way it was written and passed, so if the Supreme Court rules it unconstitutional, we didn’t just pass my bill and make it legal,” Skees said. “Contingent voidness should be tied so that if the Supreme Court overturns I-190, all that we do goes away too.”

But Johnstone said the court has the ability to overturn the money part of the initiative while maintaining its core aim to legalize recreational marijuana in the state of Montana because of a severability clause. 

“The people were very clear in telling the courts that if you’ve got problems with this, if this has constitutional problems, you need to keep everything that is still constitutional,” Johnstone said.

But barring intervention from the courts, HB 701 will become Montana’s recreational marijuana law. If, that is, the new version of the bill can gain the approval of the House of Representatives and then the governor.