The currency thriving Montana marijuana business is facing significant challenges from proposed legislation. Introduced by Senators Greg Hertz and Tom MCGillvary respectively, Senate Bill 443 (SB 443) aims to cap the THC content in cannabis products at 15%, while Senate Bill 307 (SB 307) looks to redirect marijuana tax revenues away from conservation programs, and toward law enforcement and treatment programs. These measures, if enacted, will severely cripple the state’s recreational marijuana businesses.
The 15% threshold comes from previous studies and subsequent calls from the Netherlands and United States governments suggesting that THC levels above 15% are more likely to lead to psychosis and other detrimental psychological issues, and thus should be categorized as hard drugs. Many psychologists disagree however, and physicians warn that a cap on THC may simply increase the amount of THC consumed. If consumed through smoke inhalation, increased consumption can lead to other serious health issues. It should be noted that the proposed threshold, passed in the Netherlands in 2012, is yet to be enforced, and will most likely be abandoned as consumption and abuse levels remain low despite not enforcing the cap. Cannabis revenues account for about $400B in revenues in the Netherlands, funds that would alternatively go to illicit sources if legal shops were forced to close due to THC thresholds.
Current Marijuana Laws in Montana
Current Montana legislation allows for adult-use recreational consumption, as well as medical marijuana consumption. Adults can possess up to 1oz (one ounce) of marijuana ‘flower’ or its equivalent in other forms, such as 8g (eight grams) of concentrate or 800 milligrams of any product that is THC infused. The current THC cap for marijuana flower is set at 35%, while other products do not have specific potency limits.
The state also imposes a 20% tax on recreational marijuana sales and a 4% tax on medical marijuana sales. Revenues from these taxes are allocated to various programs, including:
- The first $6 million in revenues are earmarked for Healing and Ending Addiction through Recovery and Treatment (HEART) fund.
- Remaining funds are allocated as below:
- 20%: Wildlife habitat programs.
- 4% for each State Park, trails and recreational facilities and nongame wildlife.
- 3% or $200,000 to Veterans and their surviving spouses.
- $150,000 to the Board of Crime Control.
Any remaining revenues go into the General Fund.
Senate Bill 403: Imposing a 15% THC Cap
Senator Greg Hertz introduced SB 443, which proposes a relatively strict limit on THC potency, capping it at 15% for all recreational cannabis products. Since current Montana law permits THC levels up to 35% (for marijuana flower), this bill would significantly reduce the allowable THC content, affecting all THC based products.
Proponents of the bill argue that high-potency THC products pose public health risks, especially concerning mental health & addictions among youth and young adults. However, studies show that there is no indication of a rise in youth THC / marijuana consumption. In the bill, Senator Hertz notes the increase in THC levels over the past few decades, stating, “The average THC content in cannabis in 1995 was around 4%, and today it pushes 35% and even higher.”
However, industry stakeholders contend that such a cap would devastate the legal market, with dire consequences. Charlie Gaillard, owner of Lone Peak Cannabis Company in Montana, is concerned that the legislation would effectively put legitimate dispensaries out of business, providing re-expansion the black market. While it’s intentions seem well founded, all indications show that these caps will significantly increase consumption, and reduce the market share of legitimate legal marijuana dispensaries.
The argument that customers will return to the black market is not an unrealistic one – studies have shown that legalization, and controlling cannabis sales, has significantly decreased the black market revenues, thereby allowing consumers to buy a safe, reliable product, while securing revenues for health, social and environmental programs state-wide.
Senate Bill 307: Redirecting Marijuana Tax Revenue
Sponsored by Senate Majority Leader Tom McGillvray, SB 307 looks to reallocate those remaining marijuana tax revenues from health, social, wildlife habitat and recreational programs to substance abuse prevention, treatment, and in particular, law enforcement.
Supporters of the bill maintain that the redirection of funds is essential in addressing the negative impacts of marijuana legalization, such as increased substance abuse among young adults. Supporters also believe that allocating resources to prevention and enforcement efforts is the logical step for reducing these risks. However, previous studies have shown that increased enforcement does not necessarily decrease marijuana consumption among young adults; that argument in fact was one of the cornerstones of the legalization movement.
Those opposed to the bill contend that this reallocation of revenues would deprive vital conservation and recreational programs of necessary funding. Tom Jacobson, a representative for the Montana Wildlife Federation, emphasized that these revenues and programs are critical for communities and that funding needs to remain in place.
Conclusion
While public health and safety appear to be the catalyst for the proposed legislation, SB 403 and SB 307 have potential profound repercussions on Montana’s recreational marijuana industry and the state parks and wildlife conservancy efforts. Implementation of a 15% THC cap will cripple businesses by limiting product offerings and pushing consumers toward the black market. Simultaneously, redirecting tax revenues away from conservation efforts could undermine community support and the perceived benefits of legalization. As these bills progress through the legislative process, it is critically important for stakeholders to consider the wider consequences and strive for an approach that safeguards public health without dismantling a legitimate and thriving industry.
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