August 2018

MARKET AT A GLANCE Main measure Initiative 148 (legalized MMJ) Initiative 182 (legalized dispensaries and other MMJ businesses) Year passed Initiative 148: 2004 Initiative 182: 2016 MMJ business regulations Heavy. MMJ providers must be licensed and are subject to requirements that include testing, labeling, packaging, signage and waste management. No adver- tising is permitted. Final rules, which went into effect April 10, require enrollment in a new seed-to-sale tracking system. State tax requirements Tax on providers’ gross sales was lowered from 4% to 2%, effective July 1 . Sampling of state licensing & application fees Application: Dispensary/Provider: $50 License: Dispensary/Provider: $1,000-$5,500 annually, depending on number of patients registered with the business What to watch • The tax rate on MMJ providers’ gross sales fell from 4% to 2% in July 2018. This will likely lower prices, which could give MMJ sales a small boost. • Though regulations requiring Montana’s MMJ providers to test, label and track their products went into effect in April, lawmakers are still ironing out the details of other rules that will directly impact the business climate in the state – such as the amount of MMJ that providers can have on hand and limits on canopy space. No timeline for finalizing these outstanding regulations has been established. Montana With no limits on the number of providers allowed to operate in the state and surging patient counts, Montana’s medical marijuana program is firing on all cylinders. As of early 2018, the number of registered MMJ patients in Montana stood at nearly 26,000 – approxi- mately 2.5% of the state’s population – and was rising quickly. The program reached its height – boasting more than 30,000 patients – in June 2011, just before a state Supreme Court ruling nearly regulated the industry out of existence. A 2016 ballot initiative legalized dis- pensaries and other MMJ businesses. Strong competition and newly established regulations on medical marijuana providers could limit the potential to run a profitable cannabis business in the state, but it’s clear the demand for MMJ in Montana is strong. August 2018 • Marijuana Business Magazine • 121