Weed Stores Could Face Exponentially Higher License Renewal Fees Under New Bill
HB 903, now on Gov. Gianforte’s desk, could generate $4 million in new revenue for state coffers by raising license renewal fees based on how many stores marijuana businesses operateBy Max Savage Levenson, Montana Free Press
Beginning Jan. 1, marijuana retailers in Montana will see their licensing and renewal fees jump dramatically if a bill passed by the 2023 Legislature gets signed into law by Gov. Greg Gianforte.
House Bill 903, sponsored by Rep. Mike Hopkins, R-Missoula, would raise license renewal fees cumulatively for marijuana retailers based on how many locations the business operates. Under the new law, a business will pay $5,000 to renew the license on its first retail shop, and then $5,000 more per additional location. In other words, it will cost that business an additional $10,000 to renew its license for their second store, an additional $15,000 to renew the licenses for the third store, and so on.
Currently, retailers pay a flat renewal rate of $5,000 per location.
Among other changes, HB 903 additionally gives medical marijuana providers that applied for a license to sell recreational marijuana between Nov. 3, 2020, and April 27, 2021, a green light to do so. Existing policy allows only businesses that applied for an adult-use license before Nov. 3, 2020, to operate. HB 903 also allows the state board of medical examiners to conduct a review of any doctor who provides a medical marijuana certification to more than 39 patients a year.
Hopkins did not respond to multiple requests for comment for this story.
Four hundred and thirty-six marijuana retailers are currently open in Montana, according to the Department of Revenue’s Cannabis Control Division.
The dispensary chain Bloom operates the largest number of locations in Montana — 20 across the state — per the Department of Revenue’s current list. Under HB 903, the chain will pay an additional $1 million annually in licensing fees if it keeps all those stores open. Bloom CEO John Hoofman did not respond to multiple requests for comment for this story.
Many Montana marijuana businesses own only one or two locations, but smaller retailers could also feel the impact of the new policy.
“I think small businesses will feel it the most because they have smaller margins,” Pepper Petersen, CEO of the Montana Cannabis Guild, an industry association, told Montana Free Press. “Remember, all these businesses are self-financed. They don’t have a line of credit at a bank anywhere. And so $5,000 or $10,000 is a big deal to them,” he said.
According to Kristan Barbour, administrator of the Cannabis Control Division, HB 903 will generate an estimated $6,370,000 annually, nearly tripling the current $2,180,000 in revenue the state generates from marijuana licensing and renewal fees.
Barbour noted that the bulk of the revenue will go to the state’s marijuana special revenue account.
In 2022, Montana generated an estimated $58 million in tax revenue from cannabis sales. The revised renewal fees would add an additional 10% to overall revenue gains.
This story originally appeared in the Montana Free Press, which can be found online at montanafreepress.org.
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