Judge quashes Montana law creating escalating cannabis licensing fees

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A Montana judge has restricted state regulators from collecting escalating fees from adult-use cannabis operators based on the number of stores they own.

The order effectively overturns a key element of House Bill 903, which required entrepreneurs with multiple retail licenses to pay higher fees, according to the Independent Record.

The law, signed by Republican Gov. Greg Gianforte in May, levied an initial licensing fee of $5,000, with each subsequent permit costing an additional $5,000.

So a second location would cost $10,000 and a third $15,000, and so on.

In some instances, the fee structure would cost marijuana retailers more than $250,000 annually.

Helena Judge Mike Menahan issued the order on Jan. 5 in response to a lawsuit filed by state-licensed marijuana retailers Granite Peak Holdings, MaraMint and TSB Montana, the Independent Record reported.

In his ruling Menahan wrote that the original fee structure “generated sufficient fees” to cover operational costs of the state’s Department of Revenue for regulating the Montana Marijuana Regulation and Taxation Act, according to the news outlet.

Menahan also ordered that any fees paid under the new law should be returned to operators.

Adult-use sales in Montana began Jan. 1, 2022, thanks to a 2020 voter initiative that lawmakers tweaked in 2021.