Flagship pot bill emerges from Senate committee
Conservation funding from ballot initiative partially restored
Green Marijuana Cannabis (Photo by Lakia Hinson/Pixy, Creative Commons)
They may have just missed 4/20, by which point they had hoped to see House Bill 701 hit the floor, but a committee of Senate lawmakers succeeded Wednesday evening in passing a heavily amended version of a bill to implement and tax recreational marijuana in Montana, one of the final priorities of a legislative session nearing its close.
Among the many changes that the Senate Select Committee on Marijuana Laws made to the bill before passing it on a voice vote is to partially restore some funding in the bill for conservation and land easements — allocations that existed in Ballot Initiative 190, a legalization proposal that voters approved last year, but that received pushback from Republicans who argued that only the Legislature has the right to make spending decisions, not the voters. The version of the flagship pot bill that emerged from committee Wednesday also allows for limited home-grow of marijuana, some local taxation and provides a compromise on the sticky issue of a locality’s right to refuse to authorize recreational marijuana.
An amendment that lawmakers on the committee passed Wednesday first directs marijuana revenues — recreational pot will be taxed at 20%, as it stands now — to the Department of Revenue, then $6 million to substance abuse prevention program called the HEART Fund, of which a chunk goes to tribal healthcare, with 20% of the remaining sum going to Habitat Montana, a program to fund conservation easements. From there, 4% each of the remainder goes to parks, trail maintenance and non-game wildlife habitats, with several hundred thousand dollars then going to care for veterans and programs within the Department of Justice, followed, ultimately, by the general fund.
There is at least one caveat: The money wouldn’t become available until 2024, a compromise introduced by Sen. Tom Jacobson, D-Great Falls. In the first year of the program, parks, trail maintenance and non-game wildlife protection accounts would split $2 million, and beginning in 2023, Habitat Montana would receive around $5.4 million. That appropriation would continue in 2024 and beyond, with the conservation easement program receiving 20% of post-HEART Fund revenues, or, according to current projections, around $5.4 million. At that point, the parks, trails and non-game wildlife accounts would receive 4 percent of the remaining funds each.
This means that the bill would allocate money out of the current biennium. The Legislature in one session can’t bind the hands of their successors in the next session — so while many of the same lawmakers may still be in Helena in two years, lawmakers next session could always choose a different way to spend marijuana revenues.
The language, part of a large amendment brought by Sen. Jason Ellsworth, R-Hamilton, and developed in concert with Democrats on the committee, finds an uneasy middle ground between I-190, which would have put almost half of marijuana revenues into conservation and park programs, and HB701 as initially introduced, which made only small investments in outdoor recreation and conservation and directed the bulk of pot monies to the general fund. It could mean millions more in funding for programs that environmental and hunting groups have advocated for all session, assuming the changes last through the rest of the process. It would also boost funding for veterans’ care, another proposed allocation in the ballot initiative.
“Trying to stay as true to the initiative as possible has been our priority,” said Jacobson.
“And the fact that we have to have enough votes to get this out of here in some way that makes sense for Montanans,” said Senate Minority Leader Jill Cohenour, D-East Helena, one of the other Democrats on the committee.
Bringing HB701’s funding language closer to I-190 has been the top priority of Democrats during debate on the many marijuana implementation bills this session. Rep. Mike Hopkins, R-Missoula, HB701’s sponsor, said the new language could help bring minority lawmakers into the fold, but that he and other Republicans also acknowledge the need for continued funding in programs like Habitat Montana.
“We obviously have conversations on our ability to be able to fund all of their requests, and we especially have a conversation around being able to fund the maintenance portions for projects within Habitat Montana (in other appropriations bills),” Hopkins said. “And then, also, it allows us to work a little bit more closely with our Democratic friends.”
The amendment from Ellsworth also would ask the Supreme Court to appoint a judge specifically to handle expungement and resentencing of past marijuana provisions, which is allowed for under HB701. And, though some Republicans were itching to impose THC limits and nix the ability for recreational users to grow marijuana at home after a presentation earlier in the process from a drug enforcement officer from Colorado who warned lawmakers of the dangers of smelly basement grow-ops and marijuana-induced psychosis, the committee ultimately left those components largely intact. Recreational marijuana under the bill can have up to two plants per person and four per household.
Finally, the bill still officially bans the outdoor growing of cannabis, a provision requested by the hemp industry, but the amendment allows for the grandfathering of existing outdoor operations.
The bill first came to the Senate in early April, and has undergone a series of protracted deliberations alongside other proposals for legalizing marijuana that the Senate panel has gradually picked off. At each stage, concepts have been shuffled around or amended to address concerns from an expanse of stakeholders and an existing medical marijuana industry sensitive to change. It seemed for most of the process that Republicans would be unwilling to restore environmental funding, despite repeated pleas from advocates to follow the language of the initiative. Exactly what changed isn’t entirely clear, and Ellsworth, who led the Senate’s marijuana committee, declined to comment on the deliberations that led to the language approved Wednesday.
Other changes that the Senate committee approved includes a compromise on the issue of local excise taxes, which were allowed in the first draft of HB701 but removed in the House. After Wednesday’s amendments, municipalities can levy a separate excise tax of up to 3% on marijuana if approved by the voters.
The bill will also strike a balance on the county option. At first, HB701 would require every county to opt-in to adult-use marijuana, which some in the industry feared could lead to local governments deciding to shutter existing medical marijuana businesses. But Republicans in the Senate including Ellsworth worried that this would constitute a takings by the government, so an amendment that failed in the House was revived and added to the bill. Now, the half of Montana counties that supported I-190 will have adult-use unless voters decide to opt out, while counties that voted against I-190 will still have to pass local initiatives opting in if they want recreational marijuana.
The amendment also fixes a technical issue that arrangement created: At first, tribes, which as federal entities cannot license dispensaries on their land, would only be able to operate dispensaries within a 25-mile radius. But that would mean many tribes could only operate dispensaries in counties that did not support I-190 and presumably would not opt-in to the program; so, the amendment Wednesday expanded that boundary to 150 miles.
The final piece to fall into place was how to handle the problem of a legal challenge to either the bill or the underlying initiative. When Ellsworth’s amendment debuted early Wednesday, it contained language that would void all of HB701 if any part of I-190 was found unconstitutional, which some fear could be a possibility given the ballot language allocating funding. I-190 — and HB701, — also contain provisions restricting the ability to own dispensaries to Montana residents, language that in other states the court has challenged as illegal protectionism. Some members of the marijuana industry feared that language amounted to a poison pill that could tank recreational marijuana if the program is challenged.
But by the time the ink dried on the amendment, the language was updated to explicitly protect the overall legalization effort if the funding provisions of I-190 are declared void or the court overturns any other sections of the initiative, so long as those sections aren’t integral to the function of the program.
The committee’s work Wednesday addressed most of the concerns that J.D. “Pepper” Petersen, a dispensary owner and Montana Cannabis Guild President who wrote I-190, had on that front, he told the Daily Montanan.
From here, lawmakers will need to rush the bill through the Senate and then send it back to the House so lawmakers there can vote to concur with the Senate amendments. They’ll have to walk a tight-rope, and possibly suspend rules, in order to make it happen, but Cohenour said she’s quite sure that her counterparts in the House can offer their votes.
“The biggest thing is trying to stay true to the people of Montana,” Jacobson said. “Given the circumstances, we did as good a job as we could, and I think we met that expectation. Like anything, this isn’t over. We’re gonna see what loopholes, what bugs we can fix. But I think we’ve got a pretty solid start.”
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