Increased fees for Montana marijuana dispensaries permanently blocked

Posted at 5:13 PM, Jan 10, 2024

HELENA — A provision of a new state law that significantly raised licensing fees for marijuana businesses that operate multiple dispensaries has been permanently blocked, after business owners reached an agreement with the state to resolve a lawsuit challenging the fees.

Last week, state District Court Judge Mike Menahan accepted a consent judgment signed by attorneys for the Montana Department of Justice and three marijuana licensees. In the document, the two sides agreed licensing fees will be set back to $5,000 per dispensary, as they were before the passage of House Bill 903 last year.

Under HB 903, passed just before the end of the 2023 legislative session, licensees would have to pay $5,000 for the first dispensary, $10,000 for the second and another $5,000 added to the fee for each additional one. Granite Peak Holdings, which operates 14 dispensaries under the name “Elevated,” said the change would have increased their fees from $70,000 to $525,000. They joined two other licensees – TSB and MariMint – in a lawsuit.

The consent judgment includes a “conclusion of law” stating that the increased fees would generate more revenue than is necessary to cover the Montana Department of Revenue’s costs for regulating the marijuana industry – a benchmark set out in law. It says the state will provide refunds to any licensees who paid the higher fees.

Advocates for the marijuana industry said the new fee structure was an unfair and unnecessary burden on these businesses.

“These fees represent the continuing efforts by ‘reefer madness’ politicians to tax cannabis businesses out of existence,” said Pepper Petersen, president and CEO of the Montana Cannabis Guild.

They also questioned the way the change was brought forward.

“This amendment as well another one went in in the final days of the session, with no public input,” said Kate Cholewa, with the Montana Cannabis Industry Association. “The likelihood of this outcome was clear in the halls of that Capitol when it happened. So we hope the best takeaway from this is to take these businesses seriously.”

The rest of HB 903, which included a number of changes to marijuana law, will remain in effect.