Montana State Legislature
SJ 31 - Study the Implementation of Montana's Recreational Marijuana Program
SJ 31 - STUDY IMPLEMENTATION OF MARIJUANA PROGRAM
Legislative Council assigned the Senate Joint Resolution No. 31 study to the Economic Affairs Interim Committee. The study ranked twentieth among the polled studies.
The committee reviewed the draft final report and final version of PD0001, listened to public comment on the study as a whole, and then held a work session to conclude the study. During the work session, a conceptual amendment was moved to extend the moratorium on the issuance of new licenses, and a request was made to postpone voting on the bill and report until later in the day. A second conceptual amendment was requested during the Cannabis Control Division's legislation proposals to move the duties of the state lab from the Department of Public Health and Human Services to the Department of Revenue. Both amendments were incorporated into PD0001-Version 2, which was reviewed in the afternoon, along with an updated recommendation page of the final report. The committee discussed the amendments at length and a motion was made to advance the bill with the amendments. The motion passed with a 9-1 voice vote, and Representative Kassmier offered to carry the bill. Finally, the committee moved to adopt the final report to conclude the study, and the report was adopted unanimously.
September meeting materials:
- Draft Final Report: Overseeing a Budding Industry
- Memo from LJIC to EAIC
- SJ31 Version 4 Draft Bill Summary
- PD0001: Generally revise marijuana statutes
The committee reviewed a third version of its committee bill, PD1-SJ31-1, with changes made based on decisions from the July meeting. Changes included recommendations on updating the definition of hemp and the definition of marijuana product, clarifying the section on penalties for violation, and adding provisions for the identity of controlling beneficial owners. The committee also listened to a presentation by the Department of Revenue on manufacturing facility cost structure analysis and decided not to make any changes to the manufacturing tier structure in the committee bill.
August meeting materials:
- Draft Final Report: Overseeing a Budding Industry
- Draft Bill (Version 3): PD0001
- Memo: SJ31 PD 0001 Version 3 Summary
- Memo: Manufacturing Facility Cost Structure Analysis
The committee reviewed a second version of its committee bill, PD1-SJ31-1, with changes made based on decisions from the June meeting. The committee also reviewed topics regarding the definition of hemp, the possibility of a catch-all penalty provision, and listened to a presentation by DOR regarding a retail price analysis for manufactured concentrate. The committee moved to have staff work with the Department of Agriculture to streamline the definition of hemp, and one committee member volunteered to provide suggestions for individual penalties instead of a catch-all provision. Regarding the manufacturing fee structure, the committee chose not to move forward on amending the statute and instead requested the Department of Revenue provide an analysis on their operating costs for administering the program to present at the September meeting, in order to better evaluate licensing fees at a holistic level. An additional request for the committee bill was made to incorporate a requirement for owner information disclosure, similar to alcohol license laws.
July meeting materials:
- Draft Bill (Version 2): PD0001
- July 2022: Definition of Hemp
- July 2022: Catch-All Penalty Provision
- Fee Structure for Manufacturers (from June 2022)
- Presentation by DOR: Concentrate Retail Price Study
The committee received the annual report on medical marijuana complaints from the Board of Medical Examiners and a letter from the director of the DOR regarding the department's stance on the combined-use license. The committee then held a work session to discuss the provisional draft bill for general cleanup and clarity on marijuana statutes. The committee reviewed the bill, heard public comment, had discussion with the department regarding the director's letter, and then reviewed the memos prepared by staff. The committee requested staff to revise the bill draft based on decisions made in the work session on several of the memos, and requested a meeting in July with the department and interested stakeholders to discuss remaining issues.
June meeting handouts:
- Annual Report on Medical Marijuana Complaints
- Letter from Director Beatty - Department of Revenue
- LSD Memos: Follow-up Analysis on HB701 Cleanup Options:
- Inconsistency in Definitions
- Definition of Hemp
- Catch-All Penalty Provision
- Expungement Court
- Identity of Complainant
- Background Checks
- Fee Structure for Manufacturers
- Increasing Tiers
- Combined-Use License
- Criminal Distribution of Dangerous Drugs
- Repeal of Title 61
- Local-Option Tax Statutes
- Draft Bill: PD1-SJ31-1
The committee was invited to an off-site tour at Bloom MT, along with the Revenue Interim Committee, to view its cultivation and manufacturing facilities and dispensary. The committee also watched a virtual tour of Fidelity Diagnostics' marijuana testing lab and heard a presentation on federal marijuana policy. After reviewing the staff briefing paper, hearing public comment, and committee discussion, the committee requested staff to:
- research several statutes for discussion at the June meeting; and
- prepare a provisional draft bill for general cleanup and clarity on numerous marijuana statutes.
April meeting handouts:
- Fidelity Diagnostics Tour Handout
- Expungement Rules & Forms
- Staff Presentation: Marijuana Metrics
- HB701 Cleanup Bill Options Spreadsheet
- Staff Briefing Paper: HB701 Cleanup Bill Options
The committee held a panel titled "Implementation success stories and pain points." The committee heard from the Department of Revenue, the Crow Tribe, and several industry members, including cultivators, manufacturers, and dispensary owners. The panelists provided their perspective on how the first few weeks of the recreational marijuana market went, explained what went well, and suggested areas for improvement. The Committee's staff attorney presented two opposing legal interpretations of 16-12-223, MCA, regarding cultivator "tier-ups." Staff provided briefing papers on updates to HB701 and the combined-use license, and the Department of Revenue provided January 2022 marijuana sales. The committee decided during its work session to shorten the marijuana tour in April to visit only one or two facilities. The committee also decided to begin looking at policy ideas for a committee bill based on the spreadsheet provided by staff and requested time at the next meeting to begin developing those ideas. Finally, based on public comment and industry testimony, the Committee moved to formalize its position on the cultivator "tier-up" issue and requested staff draft a letter to the DOR.
February meeting handouts:
- Staff Briefing Paper: The Rec Roundup: Updates to HB701 Implementation
- Staff Briefing Paper: Marijuana Combined-Use Licenses
- Report from DOR: January 2022 Marijuana Sales
Work session handouts:
The State-Tribal Relations Committee requested an update on the implementation of HB701 at its January 14, 2022 meeting. A briefing paper titled " Marijuana Combined-Use Licenses" was presented to the committee, which included a map of the state that shows the authorized areas for each tribe for the combined-use license.
The committee heard a presentation by the Legislative Services Division, Office of the Court Administrator, and Department of Revenue on the codified version of House Bill 701. Staff also provided a briefing paper on local ordinances and option taxes. The committee had a long discussion with the Department of Revenue regarding several licensing statutes, and heard public comment on a variety of issues, including conflicts with criminal statutes, lack of appropriation for law enforcement, concerns about loopholes within the statutes and rules, lack of moratorium for testing labs, and ideas for the study.
November meeting handouts:
- Briefing paper: Local Ordinances & Option Taxes
- HB701 Presentation
- Memo from Legal Services Office regarding codification issues
- Expungement and Re-sentencing Update from Montana Judicial Branch
- Public Comment from Montana Cannabis Industry Association
The committee reviewed a background paper on marijuana program implementation, and discussed study topic ideas and a suggested timeline. In addition to the study topics listed in SJ31, the committee plans to tour several marijuana licensed facilities, including a cultivator, manufacturer, testing facility, and dispensary.
- Evaluate the state's current marijuana program.
- Review the effects that legalization of recreational marijuana has had on Montana, including effects of tax collections, recidivism, addiction, and expungements.
- Monitor changes in federal policy that could affect recreational marijuana laws in the states.
- Evaluate the potential benefits and drawbacks of continuing the medical marijuana system in Montana.