Montana, which legalized recreational marijuana in November 2020, has experienced a booming cannabis industry, with sales reaching $203 million in its first year. However, the introduction of Senate Bill 546 by Sen. Keith Regier, R-Kalispell, has sparked debate as it aims to eliminate adult-use dispensaries and significantly alter Montana’s marijuana marketplace.

Understanding Senate Bill 546 and Its Impact on Montana’s Cannabis Industry

The proposed bill contains several amendments targeting the taxation, potency, and cultivation of marijuana. SB 546 would raise the state tax on medical marijuana from 4% to 20% and limit both medical marijuana potency and allowable amounts for possession. Although it would prohibit non-medical marijuana sales, the bill would not re-criminalize possession for adults. Additionally, it seeks to reduce the number of plants an adult can grow at home from two to one.

Since January 2022, Montana has generated $54 million in tax revenue from its cannabis industry, with less than one-tenth coming from medical marijuana taxes. If passed, SB 546 would significantly reduce this revenue stream, potentially harming the state’s economy and its residents.

Senator Regier’s Stance on Controversial Issues

Senator Regier has a history of proposing bills on contentious subjects. He filed a joint resolution urging Congress to investigate “alternatives” to American Indian reservations, claiming that they have failed to improve the lives of their inhabitants. He also sponsored Senate Bill 154, which asserts that the right to privacy should not apply to abortion, and Senate Bill 99, which seeks to ban gender-affirming procedures for transgender youth under 18.

National Cannabis Taxation Rates and Their Effect on Consumers

Since marijuana remains federally illegal, each state sets its own tax rate. Taxes can be levied on retail sales, state, local, potency, and weight-based factors. The most common taxation method is retail tax, which does not apply to wholesalers. Potency-based taxes are designed to discourage consumers from purchasing high-potency products but may inadvertently encourage them to turn to the illicit market.

In 2022, California collected the highest state cannabis tax revenue at $744.4 million, or $20 per capita. Washington State and Colorado followed with the highest per capita taxes at $67 and $61, respectively. Maine had the lowest per capita total for state cannabis taxes at just $13 per capita.

The taxes applied can significantly impact the end cost for customers. For example, the wholesale cost of an ounce of marijuana in Colorado is about $44; in Nevada, it’s around $130. Both states tax at the state level, applying a percentage of the overall price, weight-based tax, and local sales tax. However, the amount of tax and the final cost to consumers can vary significantly.

Conclusion: What’s Next for Adult Use in Montana?

Montana’s Senate Bill 546 has the potential to drastically change the state’s cannabis industry by eliminating adult-use dispensaries and altering regulations on taxation, potency, and cultivation. As the debate around this controversial bill continues, stakeholders will be closely monitoring its potential impact on the state’s economy, the lives of its residents, and the future of the cannabis market in Montana.

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