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Opponents say Regier’s marijuana bill would kill industry, cost Montana millions


Opponents say Regier’s marijuana bill would kill industry, cost Montana millions

Mar 29, 2023 | 8:35 pm ET
By Blair Miller
Opponents say Regier’s marijuana bill would kill industry, cost Montana millions
Medical marijuana was legal but not yet mainstream in 2009 when Tamarack Dispensary opened its doors in the conservative community of Kalispell, Montana. Today, owner Erin Bolster says the shop has “become a normal part of the community.” (Justin Franz for Kaiser Health News)

Sen. Keith Regier’s bill to repeal adult-use marijuana in Montana is an effort to undo the will of voters, would kill hundreds of small businesses and thousands of jobs, harm sick people who rely on medical marijuana, and cost the state millions of dollars, opponents told a Senate committee Wednesday.

Nicole Hobday, a former industry employee who testified in opposition, said the bill was a waste of time and taxpayer resources that would hurt Montana businesses and people’s health.

“This bill is obvious, frivolous culture war. It’s an obvious losing battle that the people of Montana have already spoken on multiple times,” she said.

In the 14 months since adult-use marijuana sales started, sales have averaged more than $25 million a month, bringing in more than $50 million in tax revenue for Montana.

Regier’s Senate Bill 546 was formally introduced last Friday and saw its first hearing in the Senate Business, Labor, and Economic Affairs Committee on Wednesday, six days before next Tuesday’s deadline for all appropriations, revenue and referenda bills to pass at least one chamber.

The measure contains a multitude of changes to Montana’s marijuana industry. It aims to end adult use in favor of a registry-only medical model; increase the medical marijuana tax; reduce THC levels for flower, concentrates and edibles; raise the age for marijuana industry workers; limit possession amounts; and increase cardholder license fees.

A fiscal note for the bill released late Wednesday afternoon found the bill would cost the general fund an estimated $25 million to $28 million annually. It says the decreased tax revenue would cut distributions for several programs funded by marijuana taxes and leave local municipalities with a “significant” decrease in marijuana tax revenue.

Regier, a Kalispell Republican, said his bill was about “public safety” and called marijuana legalization, which was approved by 57% of voters on I-190 in 2020, “controversial” and something the legislature had the authority to overturn.

Sen. Keith Regier, R-Kalispell, presents his Senate Bill 546 to the Senate Business, Labor, and Economic Affairs Committee on Wednesday, March 29, 2023.
Sen. Keith Regier, R-Kalispell, presents his Senate Bill 546 to the Senate Business, Labor, and Economic Affairs Committee on Wednesday, March 29, 2023. (Photo by Blair Miller, Daily Montanan)

“Committee, the bill is yours now, and if you’re inclined to vote against it, look at it – what parts are good for public health?” Regier told the committee. “Keep the bill going. Change it to how you would like it and keep that public health in mind.”

The half-dozen proponents of the bill included representatives of the Montana Family Foundation, SafeMontana, Youth Connections and citizens opposed to legalized marijuana.

Scott Reichner, lobbying for SafeMontana, lamented the passage of I-190, saying there were “some questions there” about how the push to pass the initiative was funded, as well as the finalized House Bill 701 from the 2021 session that developed the guidelines for the industry.

“SafeMontana worked closely with the originators of that bill to make it a lockdown bill, to regulate it as best we could. Unfortunately, through the legislative process, we lost most of our safeguards. The industry pretty much got most of what they wanted in that bill,” Reichner said.

Most of the proponents of HB546 said they felt marijuana was too potent and unsafe for adult use, that there were too many dispensaries, and that they felt legalization had resulted in exacerbated mental health issues for children – something which several opponents refuted.

“We need to level the playing field right now. They won the last round in 2020, 2021; and in 2023, we need to be able to have absolutely what I-190 said it was going to do,” said Steve Zabawa, also with SafeMontana.

Pepper Petersen, the president and CEO of the Montana Cannabis Guild, along with more than a dozen other opponents that included many people who work in the industry, said the supporters of the bill were trying to relitigate the will of the voters through the legislature.

“The opponents said it was the best marijuana law in the country with the tightest regulations, and here they are now telling you they want a do-over,” Petersen said.

From January 2022 through February 2023, Montana marijuana sales total $353 million — $104 million in medical marijuana and $248 million in adult-use marijuana. Those sales have so far brought in a total of $53.8 million in tax revenue through February, according to Cannabis Control Division data.

Adult-use sales have increasingly outpaced medical sales in the 14 months since January 2022 – making up about 80% of sales in February compared to about 60% of sales at the start of last year.

Zabawa told the committee he did not see the measure costing Montana marijuana businesses a single job or leading to a burgeoning black market, as opponents said would certainly happen if the bill goes through.

“I don’t see where anybody’s going to lose a job, personally,” he said. “… We’re not trying to do anything to the business other than keep it where it’s at.”

The opponents in the marijuana business said they see things very differently.

They noted that prior to full legalization, 15% of Montana adults were using marijuana that was mostly bought on the black market. If Regier’s bill passes, they said people will simply drive to Washington or other states to buy products, some of which would be sold on the black market in Montana, leading to a massive decrease in sales and tax revenue.

“To the heart of your question, how’s it going to affect revenue? It will erase the state’s revenue,” Petersen said.

Owners of dispensaries and medical clinics also said limiting the THC levels in products would harm people who use stronger medical marijuana to treat side effects of terminal illnesses, cancer, PTSD, anxiety and depression and that increasing the tax on products and the cost of a card was punishing those groups.

“I do believe it’s a terrible idea to shift a tax burden to some of the sickest and debilitated patients in the state while at the same time reducing the effectiveness of their medicine and the ability to purchase it in the amounts they need,” said Elizabeth Pincolini, the owner of Billings Alternative Wellness.

Katrina Farnum, the owner of Garden Mother, a marijuana business, said the bill would have sweeping negative effects for people who use marijuana for medical purposes but buy recreational products because they are more accessible, as well as on the quality control of marijuana.

“This bill would completely erase the entire legal cannabis industry in Montana, eliminating thousands of jobs, erasing all of the tax money allocated for various state programs, bankrupt local business owners, and create a thriving black market of untested, unregulated drugs and associated behaviors,” she said.

Brian Porter, the owner of Zen Medicine in Missoula, told the committee the bill would also cut into marijuana tourism that brings in tax revenue for both the state and counties and replace it with unregulated sales.

The opponents said the bill did not seem well thought-out and urged the committee to kill it. The committee is expected to take executive action on SB546 on Thursday.

“This bill shows a complete lack of research and understanding of cannabis, the industry and the thousands of families and auxiliary businesses that rely on this industry to make ends meet,” she said.

HB 546 changes to industry

Regier’s bill repeals the adult-use industry and moves to have every user pay a $50 cardholder license fee – $30 more than the current medical card fee – in order to buy marijuana products. It increases the tax on medical marijuana, the only product that could be sold should the bill become law, from 4% to 20%.

The measure also greatly reduces the potency of marijuana products that could be sold. It lowers the THC limits for flower from 35% to 10%, moves the THC possession limit for edibles from 800 mg to 100 mg, and limits single-serving edibles to 5 mg of THC. The bill caps most products at 100 mg of THC, and limits concentrates to 10 mg THC.

A person could buy only one ounce of marijuana per month under the proposal, which would also change how the tax revenue is dispersed, dedicating 50% of tax revenue to the HEART Fund and 5% to the drug education and awareness account, but leaving most other disbursements in place.

Further, it would allow county commissioners or city councils to vote whether to allow or prohibit marijuana businesses, and allow citizens to run petitions to put a question on whether they should be allowed on the local ballot.