Montana Cannabis Licensing

Recently HB 701 was signed into law. Montana Gov. Greg Gianforte has signed a policy into law on how recreational marijuana will be regulated and taxed in the state after more than half of voters approved legalizing cannabis for adults 21 and older last November.

Montana residency will be required to get an adult-use business license, and existing medical marijuana companies will get an exclusive opportunity to enter the recreational market for the first 12 months.

But if your company wants to get into the cannabis industry, you should start preparing by now.

Types of Montana adult-use marijuana licenses

The new bills establishes six types of Montana marijuana establishment licenses:

Cultivator license (12 tiers depending on the size of the canopy)
Manufacturer license
Adult-use dispensary license
Testing laboratory license
Marijuana transporter license
Combined-use marijuana license

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Official fees for new entrants to the market

According to HB 701, the official fees are as follow:

Type of license	Official fees
Cultivator license	· $1,000 for micro tier canopy · $2,500 for tier 1 canopy · $5,000 for tier 2 canopy · $7,500 for tier 3 canopy · $10,000 for tier 4 canopy · $13,000 for tier 5 canopy · $15,000 for tier 6 canopy · $17,500 for tier 7 canopy · $20,000 for tier 8 canopy · $23,000 for tier 9 canopy · $27,000 for tier 10 canopy · $32,000 for tier 11 canopy · $37,000 for tier 12 canopy
Dispensary license	· $5,000 for each location
Testing laboratory license	· The fee has not been established in the bill, has to be established by rule of the department (16-12-202(4)(b), MCA)
Manufacturer license	· $5,000 for each manufacturing facility that produces, on a monthly basis, less than 1 pound of concentrate and up to 10 pounds of concentrate. · $10,000 for each manufacturing facility that produces, on a monthly basis, between 10 pounds of concentrate and 15 pounds of concentrate · $20,000 for each manufacturing facility that produces, on a monthly basis, 15 pounds or more of concentrate
Transporter license	· The fee has not been established in the bill, has to be established by rule of the department (HB701 Section 3 (1)(d))

Social equity program

There’s no info regarding social equity on HB701

Steps to apply for a license

General requirements for any license:

Before issuing any license, the department has to conduct the following background checks:

A fingerprint-based background check meeting the requirements for a fingerprint-based background check by the department of justice and the FBI in association with an application for initial licensure and every 5 years thereafter; and
A name-based background check in association with an application for initial licensure and each year thereafter except years that an applicant is required to submit fingerprints for a fingerprint-based background check.

For the purpose of the background checks, the department has to obtain fingerprints from each individual listed on an application submitted under this chapter and each individual who has a controlling beneficial ownership or financial interest in the license or prospective license, including:

Each partner of an applicant that is a limited partnership;
Each member of an applicant that is a limited liability company;
Each director and officer of an applicant that is a corporation;
Each individual who holds a 5% financial interest in the license applicant or is a controlling beneficial owner of the person applying for the license; and
Each individual who is a partner, member, director, or officer of a legal entity that holds a 5% financial interest in the license applicant or is a controlling beneficial owner of the person applying for the license.

Except as provided in the bill, any employee of a marijuana business shall undergo a criminal background check prior to beginning employment. Also, an employee of a former medical marijuana licensee in good standing with the department as of the effective date of the bill, must undergo a criminal background check within 90 days of the effective day of the bill.

Transporter License Extra Requirements:

A marijuana transporter license may be issued to a person to provide logistics, distribution, delivery, and storage of marijuana and marijuana products. A marijuana transporter license is valid for 2 years. A licensed marijuana transporter is responsible for the marijuana and marijuana products once it takes control of the marijuana or marijuana product.

On or after March 1, 2022, and except as otherwise provided in this section, all persons who transport marijuana or marijuana products shall hold a valid marijuana transporter license. The department shall begin accepting applications on or after January 1, 2022. The department may allow for a reasonable grace period for complying with this requirement.

The department shall establish by rule the requirements for licensure, and the applicable fee for a marijuana transporter license or the renewal of a transporter license. The department may not license a person to be a marijuana transporter if the applicant meets any of the criteria established for denial of a license under 16-12-203(2).

A person who is not licensed under this chapter must apply for and obtain a marijuana transporter license in order to transport marijuana or marijuana products.

A registered cardholder or consumer is not required to possess a marijuana transporter license when purchasing marijuana or marijuana products at a dispensary.

A person who obtains a cultivator license, manufacturer license, adult-use dispensary license, medical marijuana dispensary license, or testing laboratory license or is an employee of one of those licensees, may:

Transport marijuana or marijuana products between other licensed premises without a transporter license so long as such transportation:
- complies with rules implementing the seed-to-sale tracking system set forth in 16-12-105; and
- includes a printed manifest containing information as required by the department; and
Deliver marijuana from a dispensary to a registered cardholder provided that the person delivering the marijuana or marijuana products:
- complies with rules adopted by the department; and
- includes a printed delivery manifest from a dispensary to a registered cardholder containing the registered cardholder’s address and cardholder number and the dispensary’s address and license number.

A marijuana transporter licensee may maintain a licensed premises to temporarily store marijuana and marijuana products and to use as a centralized distribution point in a jurisdiction where the local government approval provisions contained in 16-12-301 have been satisfied or in a county in which the majority of voters voted to approve Initiative Measure No. 190 in the November 3, 2020, general election.

The licensed premises must be located in a jurisdiction that permits the operation of a marijuana business and comply with rules adopted by the department.

A marijuana transporter may store and distribute marijuana and marijuana products from this location. A storage facility must meet the same security requirements that are required to obtain a license under this chapter.

A marijuana transporter shall use the seed-to-sale tracking system developed pursuant to 16-12- 105 to create shipping manifests documenting the transport of retail marijuana and retail marijuana products throughout the state.

A marijuana transporter may deliver marijuana or marijuana products to licensed premises or registered cardholders only and may not make deliveries of marijuana or marijuana products to individual consumers.

A person delivering marijuana or marijuana products for a marijuana transporter must possess a valid marijuana worker permit provided for under [section 7] and be a current employee of the marijuana transporter licensee.

Cultivator License Extra Requirements:

The department shall license cultivators according to a tiered canopy system. Except as provided in subsection (6), all cultivation that is licensed under this chapter may only occur at an indoor cultivation facility.

There are the following cultivator license types:

A micro tier canopy license allows for a canopy of up to 250 square feet at one indoor cultivation facility.
A tier 1 canopy license allows for a canopy of up to 1,000 square feet at one indoor cultivation facility.
A tier 2 canopy license allows for a canopy of up to 2,500 square feet at up to two indoor cultivation facilities.
A tier 3 canopy license allows for a canopy of up to 5,000 square feet at up to three indoor cultivation facilities.
A tier 4 canopy license allows for a canopy of up to 7,500 square feet at up to four indoor cultivation facilities.
A tier 5 canopy license allows for a canopy of up to 10,000 square feet at up to five indoor cultivation facilities.
A tier 6 canopy license allows for a canopy of up to 13,000 square feet at up to five indoor cultivation facilities.
A tier 7 canopy license allows for a canopy of up to 15,000 square feet at up to five indoor cultivation facilities.
A tier 8 canopy license allows for a canopy of up to 17,500 square feet at up to five indoor cultivation facilities.
A tier 9 canopy license allows for a canopy of up to 20,000 square feet at up to six indoor cultivation facilities.
A tier 10 canopy license allows for a canopy of up to 30,000 square feet at up to seven indoor cultivation facilities.
A tier 11 canopy license allows for a canopy of up to 40,000 square feet at up to eight indoor cultivation facilities.
A tier 12 canopy license allows for a canopy of up to 50,000 square feet at up to nine indoor cultivation facilities.

A cultivator shall demonstrate that the local government approval provisions in 16-12-301 have been satisfied for the jurisdiction where each proposed indoor cultivation facility or facilities is or will be located if a proposed facility would be located in a county in which the majority of voters voted against approval of Initiative Measure No. 190 in the November 3, 2020, general election.

When evaluating an initial or renewal license application, the department shall evaluate each proposed indoor cultivation facility for compliance with the provisions of 16-12-207 and 16-12-210.

(i) Except as provided in subsection (1)(e)(iii), a cultivator who has reached capacity under the existing license may apply to advance to the next licensing tier in conjunction with a regular renewal application by demonstrating that:

the cultivator is using the full amount of canopy currently authorized;
the tracking system shows the cultivator is selling at least 80% of the marijuana produced by the square footage of the cultivator’s existing license over the 2 previous quarters or the cultivator can otherwise demonstrate to the department that there is a market for the marijuana it seeks to produce; and
its proposed additional or expanded indoor cultivation facility or facilities are located in a jurisdiction where the local government approval provisions contained in 16-12-301 have been satisfied or that they are located in a county in which the majority of voters voted to approve Initiative Measure No. 190 in the November 3, 2020, general election.

Except as provided in subsection (1)(e)(iii), the department may increase a licensure level by only one tier at a time.

Between January 1, 2022, and June 30, 2023, a cultivator may increase its licensure level by more than one tier at a time, up to a tier 5 canopy license, without meeting the requirements of subsection (1)(e)(i)(A) and (1)(e)(i)(B).

The department shall conduct an inspection of the cultivator’s registered premises and proposed premises within 30 days of receiving the application and before approving the application.

A former medical marijuana licensee who engaged in outdoor cultivation before November 3, 2020, may continue to engage in outdoor cultivation.

Adult-use Dispensary License Extra Requirements:

Except as provided in 16-12-201(2), an applicant for a dispensary license shall demonstrate that the local government approval provisions in 16-12-301 have been satisfied in the jurisdiction where each proposed dispensary is located if the proposed dispensary would be located in a county in which the majority of voters voted against approval of Initiative Measure No. 190 in the November 3, 2020, general election.

When evaluating an initial or renewal application, the department shall evaluate each proposed dispensary for compliance with the provisions of 16-12-207 and 16-12-210.

An adult-use dispensary licensee may operate at a shared location with a medical marijuana dispensary if the adult-use dispensary and medical marijuana dispensary are owned by the same person.

A medical marijuana dispensary is authorized to sell exclusively to registered cardholders marijuana, marijuana products, and live marijuana plants.

An adult-use dispensary is authorized to sell marijuana, marijuana products, and live marijuana plants to consumers or registered cardholders.

The department may adopt rules:

for inspection of proposed dispensaries;
for investigating owners or applicants for a determination of financial interest; and
establishing or limiting the THC content of the marijuana or marijuana products that may be sold at an adult-use dispensary or medical marijuana dispensary.

Marijuana and marijuana products sold at a dispensary are regulated and sold on the basis of the concentration of THC in the products and not by weight.

Except as provided in subsection (8)(c), for purposes of this chapter, a single package is limited to:

for marijuana sold as flower, 1 ounce of usable marijuana. The total potential psychoactive THC of marijuana flower may not exceed 35%.
for a marijuana product sold as a capsule, no more than 100 milligrams of THC per capsule and no more than 800 milligrams of THC per package.
for a marijuana product sold as a tincture, no more than 800 milligrams of THC;
for a marijuana product sold as an edible or a food product, no more than 100 milligrams of THC. A single serving of an edible marijuana product may not exceed 10 milligrams of THC.
for a marijuana product sold as a topical product, a concentration of no more than 6% THC and no more than 800 milligrams of THC per package;
for a marijuana product sold as a suppository or transdermal patch, no more than 100 milligrams of THC per suppository or transdermal patch and no more than 800 milligrams of THC per package; and
for any other marijuana product, no more than 800 milligrams of THC.

A dispensary may sell marijuana or marijuana products having higher THC potency levels than described above to registered cardholders.

If you want more information regarding what could you do in order to enter the cannabis industry in Montana, don’t hesitate to contact us.

If you want to be updated on the current state of Cannabis legalization, you should check out our map of marijuana legality by state.

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