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Dispensaries: Millions in tax revenue could be lost if legislators delay Montana's recreational marijuana program

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Posted at 5:26 PM, Feb 23, 2021
and last updated 2021-02-24 14:12:01-05

BILLINGS — The owners of Montana Advanced Caregivers, a medical marijuana dispensary in Billings, say their business and the state will lose millions of dollars if the voter-approved recreational marijuana program were delayed until January 2023.

“It would cost our business hundreds of thousands if not millions in losses of sales. Right now, Montana created a market. They’re having (cannabis) dinners down at the Billings Depot. The University of Montana projected $200 million worth of sales in the first year. If we’re not the ones supplying the market, somebody else will," said Jason Smith, co-owner of Montana Advanced Caregivers.

Smith and his co-owner Rich Abromeit have been growing and selling medical marijuana to patients in Billings since 2008 at Montana Advanced Caregivers. The pair operate three shops and are building a fourth now with expectations of stepping into the recreational market.

“We’ve made product, and we’re ramped up for it. We’ve built more facilities. We’re creating more product as we speak," Smith said.

Dispensaries say delay of Montana recreational marijuana bill would cost millions

Last week, Republican state Rep. Bill Mercer of Billings introduced a bill that would delay the date the state starts accepting recreational shop license applications one year to October 2022.

Mercer told MTN News the Montana Department of Revenue would need to add 35 investigators, 21 license permitters and 20 other employees to staff the program, and that all would take longer than six months.

When Montana voters passed two initiatives legalizing recreational marijuana last year, it made it legal for a person 21 or older to possess up to one ounce of marijuana or eight grams of marijuana concentrates. If the state delays licensing any dispensaries for one year, there would be no place legally where people can procure marijuana without a medical card.

Smith said a delay of the recreational market in Montana just makes the pockets of the black market fatter. The business owner misses out on sales, and the state misses out on potential tax revenue.

“To me, it would be a smart decision for legislators and lawmakers to use Montana’s newest natural resource. We’re an agricultural state," Smith said.

The Department of Public Health and Human Services currently oversees the state's medical marijuana program. The recreational program will be run by the Department of Revenue. People will be taxed 20 percent on their recreational marijuana purchases.

Smith said with a 10,000-square-foot outdoor growing facility, he can generate $40,000 in tax revenue for the state in the medical marijuana program. That same area under the recreational program taxed at 20 percent would generate $200,000 in tax revenue, Smith said.

Smith estimated on an acre of marijuana, he could generate $1 million in tax revenue for the state in a recreational program.

Mercer's bill to delay the recreational program is scheduled for a hearing in the House Business and Labor Committee on Friday. As of Tuesday, there have been eight bills introduced into the Legislature seeking to amend the recreational marijuana law.