Montana voters support local marijuana taxes and sales

Two years after Montana voted to legalize adult-use marijuana, residents of more than a dozen counties and cities returned to the ballot box this month to consider local measures to either ban sales or add taxes to adult-use and medical marijuana.

Taken as a whole, the measures indicate ongoing interest across the state in capitalizing on Montana’s burgeoning cannabis industry. Though several campaigns to ban adult-use sales were triumphant, they tended to be located in rural areas and small towns. Every adult-use tax measure passed, and nearly all of the medical marijuana tax votes passed as well.

Montana institutes a flat statewide 20% tax on adult-use and a 4% tax on medical marijuana sales. The local-option taxes that Montanans voted on this election cycle all add a 3% local tax to adult-use and/or medical sales.

Between the state’s launch of its adult-use cannabis program on Jan. 1 and the end of September, providers have sold $228 million worth of cannabis in Montana. Two-thirds of those sales are attributable to adult-use customers, and the rest to medical marijuana patients. The state has generated more than $33 million in tax revenue from sales during the same time period.

All counties that have approved a local tax will split the resulting revenue the same way: The county keeps half; 45% of the money gets divided among municipalities within the county; and 5% is returned to the state to cover administrative expenses.

“This is not a partisan issue in Montana. Montanans of all political stripes supported legalization in 2020 and they continue to do so, as evidenced by last night’s votes in favor of marijuana taxation and sales,” Pepper Petersen, president of the Montana Cannabis Guild, told Montana Free Press.

THE GRANITE COUNTY EXCEPTION

The most dramatic marijuana vote of Election Day occurred in Granite County, where residents narrowly rejected a measure, by a margin of 52 to 48, to turn the country from “red” to “green.”

The campaign followed a protracted battle between proponents and opponents of legal cannabis. In 2020, county residents voted in favor of legalized adult-use cannabis; during the 2021 Legislature, lawmakers used that metric to determine that Granite County would permit sales.

During June’s primary elections, however, residents voted to reverse course and ban adult-use sales. That decision forced the county’s sole retailer —Top Shelf Botanicals in Philipsburg — to halt adult-use sales in September. (The store can continue to sell marijuana to state-certified medical patients.)

The store’s manager, Kendrick Richmond, led the charge to relegalize sales in the county, along with his wife, Justine.

While Granite County opted this week not to allow sales, residents did pass separate measures to tax both medical marijuana and adult-use sales, should the county reinstate the latter at a future date.

At the other end of Montana, the Dawson County Clerk and Recorder’s Office confirmed that the tiny town of Richey voted to ban sales as well. Sixty-four residents supported the ban, and 32 opposed it.

GREAT FALLS VOTES FOR SALES

In Great Falls, residents voted by a 52-48 margin to allow cannabis sales within city limits. The decision comes on the heels of a court case that allowed a marijuana business to open within city limits, barring a vote to the contrary.

Cascade County, home to Great Falls, also passed local-option taxes on medical and adult-use cannabis sales, by wider margins. The small town of Cascade, on the other hand, voted overwhelmingly to ban adult-use sales.

MORE AFFIRMATIVE REFERENDUMS ON SALES IN GALLATIN COUNTY

Residents of Manhattan and West Yellowstone also considered bans on sales during this week’s election, but both of those measures failed. The results were particularly pronounced in Manhattan, where 69% of voters rejected the ban.

Gallatin County residents passed separate measures to tax adult-use and medical marijuana. The county had already passed the same measures in June’s primary election, but an administrative snafu necessitated a do-over.

DEER LODGE PICKS AND CHOOSES

Residents of Deer Lodge, in Powell County, split their votes on a series of very specific marijuana measures.

Deer Lodge gave testing laboratories, manufacturers and shops (including combined-use licenses reserved for Native-owned businesses) a green light, but decided against allowing any other cultivation or transport businesses within city limits. As of Thursday, the Montana secretary of state’s website notes that the measure to permit cultivators — currently separated by only two votes — may go to a recount.

MOST OTHER TAX MEASURES SAIL THROUGH

Nearly all of the other local taxation measures on Montanans’ ballots proved successful.

In Flathead County, a tax on adult-use sales sailed through, while a separate measure to tax medical marijuana narrowly failed.

The vote in Sanders County played out dramatically: While an adult-use tax zipped through, a measure to tax medical marijuana failed by two votes.

Madison and Mineral counties passed taxes on both adult-use and medical sales; in both instances, the adult-use tax passed by much higher margins. Valley County residents also passed both taxes.

“Almost all of the counties that could have adopted an optional tax have done so. There’s an air of permanence that comes with taxation,” said Petersen, of the Cannabis Guild. “We feel like marijuana is here to stay in the counties that have adopted the local-option tax.”