Gianforte signs HB701, beginning new chapter for marijuana legalization in Montana

Recreational pot sales for adults are set to begin next year

Green Marijuana Cannabis (Photo by Lakia Hinson/Pixy, Creative Commons)

Montana Gov. Greg Gianforte on Tuesday signed House Bill 701, landmark legislation that implements and regulates the recreational marijuana program that voters approved in a ballot initiative last year and funds a substance abuse prevention program that the new governor has championed since his first days in office.

The bill, sponsored by Rep. Mike Hopkins, R-Missoula, followed a long and bumpy path to the governor’s desk, emerging among a slew of other proposals in the back half of the session. Even on the 67th Legislature’s final day, the Senate considered an ultimately failed proposal to alter HB701’s carefully negotiated taxation and revenue allocation structure and significantly tighten medical card requirements.

Under HB701, retail sales of recreational marijuana for adults 21 and older will begin in January of next year. The half of Montana counties that voted for I-190, the ballot initiative legalizing adult-use cannabis, will have recreational in their borders by default, while voters in the the other half of counties will have to take an affirmative action to bring recreational marijuana in their boundaries if so desired. Recreational pot will be taxed at 20%, while medical marijuana will retain a 5% tax. The bill also moves operation and regulation of the state’s marijuana program from the Department of Public Health and Human Services to the Department of Revenue.

And it creates a special drug court to handle the review and possible resentencing or expungement of past marijuana-related convictions, a key goal of criminal justice advocates for the marijuana program.

The new marijuana law also uses tax revenues from the sale of the product — which could reach tens of millions of dollars a year, depending on the estimate — to help finance the HEART Fund, a drug treatment program that would dole out state money to local organizations and non-profits to fill gaps in the continuum of substance abuse care and prevention services, Gianforte’s office said.

With marijuana revenues, federal Medicaid match dollars and an infusion of tobacco settlement funds, the governor’s office estimated that the HEART Fund — short for Healing and Ending Addiction through Recovery and Treatment — could invest $25 million a year in substance abuse treatment.

“From the start, I’ve been clear that we need to bring more resources to bear to combat the drug epidemic that’s devastating our communities,” Gianforte said in his statement. “Funding a full continuum of substance abuse prevention and treatment programs for communities, the HEART Fund will offer new supports to Montanans who want to get clean, sober, and healthy.”

How much to tax pot and what to do with the money formed the core of debate over HB701. I-190 laid out a plan for revenues from a 20% tax to fund veterans services, park and trail maintenance and the acquisition of conservation easements through Habitat Montana. But the initiative, which passed with a healthy 57% of the vote, was quickly challenged in court, as only the Legislature has the constitutional authority to appropriate state funds. The suit is still ongoing.

So lawmakers this session set about drafting plans to spend or save the money themselves. Some conservatives favored a plan to lower the tax on recreational pot, fearing that a 20% levy would drive consumers to the black market, and put revenues in an interest-bearing trust fund that could be used to defray negative effects of legalization further down the line. Democrats wanted to hew as close to I-190 as possible, arguing that anything else disregarded the will of the voters and the pro-public lands ethos that underlies much of Montana politics.

Initially, HB701 made minor investments in parks, trails and non-game wildlife, paid into the HEART Fund at a rate of $6 million a year and left the rest to the general fund. But regular agitation from conservation groups and a deal struck in the Senate restored part of I-190’s funding structure, albeit on a delayed schedule, and revived many of its other provisions, earning support from initiative backers and authors who had been hesitant to embrace any legislative changes to I-190 earlier in the session.

“Since January, we’ve been focused on implementing the will of Montana voters in a safe, responsible, and appropriately regulated manner. House Bill 701 accomplishes this,” Gianforte said in a press statement sent out after he signed the bill May 18.