Adult-Use Cannabis in Montana: Summary of the I-190 Implementation Bill
By Colleen Mitchell, Tucker Wentz
Jun 9, 2021
In the 2020 election, Montana voters approved Initiative 190 to legalize, regulate and tax adult-use cannabis for adults aged 21 and older. After much debate, state lawmakers approved an implementation bill, House Bill 701, in April 2021 which Governor Gianforte signed into law on May 18, 2021. This bill outlines key aspects of the framework that will govern the Treasure State’s new program.
Key Provisions for Montana Consumers
When Montana retail sales begin in January 2022, adults 21 and older will be permitted to possess and purchase up to one ounce of cannabis, which may include up to eight grams of concentrate and/or up to 800mg of THC in edible form. Cannabis flower is capped at 35% THC, and edible products may not contain more than 100 mg of THC per package, with no more than 10 mg per serving size.
Adults will also be allowed to cultivate up to two cannabis plants in their own home, with no more than four plants per household. Home growers must keep any excess cannabis in a secure, locked location. The law also allows for individuals previously charged with crimes for newly legal activities to petition for resentencing and expungement on a case-by-case basis.
Multi-Million-Dollar Market Opportunities
As of October 2020, there were 41,335 medical patients in Montana, or about 3.80% of the state population, contributing to roughly $125.7 million in medical sales in 2020. By legalizing adult-use cannabis, Montana has the potential to generate between $217.2 and $259.8 million in annual recreational cannabis sales between 2022 and 2026.
Key Licensing Provisions for Operators
The Montana Department of Revenue is tasked with regulating the state’s adult-use market and issuing adult-use business licenses for cultivation, manufacturing, production, distribution, transportation, and retail sale. The Department will begin accepting adult-use business license applications in January 2022, however, only existing medical cannabis licensees that were licensed by or had an application pending with the Department on November 3, 2020, may apply. All other applicants will be able to apply on or after July 1, 2023.
There is no limit on the number of licenses the Department can issue, but there is a strict one-year residency requirement to hold any type of cannabis business license in Montana. The residency requirement applies to every person in the license-holding entity. While this prevents licensure for out-of-state businesses, interested parties may enter into management or licensing agreements with Montana residents as a way of entering this market.
In counties where a majority of voters approved I-190, local governments cannot prohibit adult-use cannabis businesses unless voters in that local jurisdiction vote in a separate election to exclude certain license types. In counties where a majority of voters voted against I-190, cannabis businesses cannot operate until the local government approves it. Municipalities can prohibit certain categories of cannabis business licenses if a majority of qualified electors in the municipality approve that category of license. This sets up the possibility of valuable merit-based cannabis licensing opportunities in municipalities with a limited number of dispensary licenses available.
If you have questions or are interested in learning more about the I-190 Implementation Bill and the retail sale of cannabis products in Montana, please contact either Jerrico Perez or Tucker Wentz.