Commissioners consider local marijuana tax

The Sanders County Commissioners held a public hearing last week to get public comment as they explore possibly taxing marijuana sales in the county.

The public hearing last Wednesday was attended by two community members, including Conor Reishus, who owns A+ Medicinal Dispensary in Trout Creek.

The commissioners are proposing a 3% tax on marijuana sales in the county, as allowed by legislation passed in 2020. The commissioners said they plan to let the voters decide on the tax with a resolution on the November ballot. The resolution is not yet written, but commissioners will give residents the option to vote to not tax any sales or to tax only medical sales, only recreation sales, or both.

Montanans approved recreational marijuana sales with Initiative 190 on the 2020 ballot. In counties where the majority of voters approved I-190 (59% of voters approved the initiative in Sanders County), recreational sales became legal January 1, 2022. Certain established medical marijuana businesses, including the one operated by Reishus, who were licensed on November 3, 2020, were allowed to begin selling adult-use marijuana this year. Other establishments will be able to begin selling on July 1, 2023.

The state legislature set the tax rates for medical sales at 4%, recreational sales at 20%, and allowed for counties to also elect to collect up to 3% in a local-option marijuana excise tax. House Bill 701 states that if a county imposes a local-option marijuana tax, 50% of the tax revenue must be retained by the county, 45% must be given to municipalities based on the ratio of the city or town’s population to the county population, and the remaining 5% is retained by the Department of Revenue to defray costs of administering the tax.

So far, four counties – Park, Missoula, Yellowstone and Dawson – have voted for the local tax on marijuana sales. Voters in Park, Yellowstone and Dawson chose to collect the tax on all sales, while Missoula County voters opted to tax only recreational sale sand not medical sales.

“Everybody says 3% isn’t much, but I’m concerned we keep getting taxed,” Reishus, who sells to both medical and recreation customers, told the commissioners. According to the Department of Revenue, all but one of the five licensees in Sanders County have opted to sell both medical and recreational marijuana. “Small businesses are struggling across the nation,” said Reishus, who added that he would have preferred that the 3% local tax be taken from the 20% already taken by the state. “I wouldn’t have any problem with that. It’s just the additions keep coming.”

The 20% state tax on recreational marijuana and 4% tax on medical sales provide $6 million for the Healing and Ending Addiction through Recovery and Treatment (HEART) fund. Of the remaining tax revenue, 20% funds wildlife habitat through the Department of Fish, Wildlife and Parks, 4% goes to the state park account, 4% to the trails and recreational facilities account, 4% to the nongame wildlife account, and the lesser of 3% or $200,000 goes to the veterans and surviving spouses state special revenue account. Another $150,000 goes to the state board of crime control to fund crisis intervention team training.

The next step for the county commissioners will be to write the resolution for the November ballot. Resolutions must be submitted 85 days before the election.