Local tax options, rollbacks on recreational

Eleven of the 16 ballot measures across the state deal with implementing a 3% local option sales tax that’s proved highly popular in previous elections. During the June primary, 13 counties, mostly rural, approved the local option taxes by a 3-to-1 margin.

The state already collects a 20% tax on recreational cannabis sales and a 4% tax on medical marijuana sales. Through the end of September, Montana has seen nearly $228 million in recreational and medical sales, and reaped over $33.5 million in tax revenue. Recreational sales, so far at $152.5 million, have eclipsed the state’s own projections for the entire 2022 calendar year, which had been forecasted at $130 million.

Five other measures ask voters whether to allow recreational sales in their local jurisdictions or ban them outright. Currently 28 counties and the city of Billings prohibit recreational cannabis sales. 

For the second time this year, Granite County voters will decide whether to allow recreational cannabis sales. The county first approved legalization in 2020, but a push in this year’s June primary to ban recreational sales won out with 53% of votes. It was the first county to reverse from “green” to “red.”

That repeal effort got a boost from Steve Zabawa, a perennial marijuana opponent from Billings who heads up the group SafeMontana. The group’s satellite organization in Philipsburg spent some $2,200 in advertising urging voters to repeal recreational sales ahead of the June election, but has reported no activity since the citizen effort to flip the county “green” again got started. 

Kendrick Richmond, manager at Top Shelf Botanicals in Philipsburg, went to the county courthouse three days after the election to get the re-do campaign underway. He gathered 394 signatures, about 20 more than needed to reach the November ballot, and has since been trying to coax voters back to their 2020 stance, when Granite County passed legalization by a 10-point margin. He also mustered up enough signatures to put a 3% tax on recreational and medical sales on the ballot. 

“We’re providing safe products, and I think that’s what’s lost here is because everything we do goes through the state, background checks and everything,” Richmond said in a phone interview this week. “The tax money is important because, and it’s not a lot of money, but it’ll certainly help and you don’t need to do a damn thing for it.”

Four municipalities, Great Falls, Deer Lodge, Manhattan and West Yellowstone, will each vote to prohibit recreational marijuana sales in city limits. There are no marijuana businesses inside the city limits of Deer Lodge or Powell County. The Montana Standard reported in September that the Deer Lodge City Council, while not taking a position on the matter, agreed in March to put banning recreational marijuana sales to a vote at the request of local marijuana opponents concerned about potential impacts on young people. 

Great Falls had banned marijuana sales in city limits through a local zoning ordinance, but District Court Judge David Grubich struck down that ban last month. Owners of the Green Creek Dispensary challenged the ordinance in court, arguing state law required a public vote on whether to ban recreational cannabis sales in a “green” county; Cascade County approved legalization in the 2020 election. 

Simultaneously, Cascade County will join eight others in potentially imposing a 3% local option tax on recreational and medical marijuana, each tax requiring its own vote. The other counties are Gallatin, Madison, Mineral, Sanders, Flathead, Hill, Valley and Sheridan. Of the local taxes, 50% is retained by the county, 45% is distributed to the municipalities and 5% goes to the state to defray the costs of administering the taxes.

Beaverhead County will vote to tax medical and recreational cannabis sales, although recreational sales are currently prohibited in the county. The Dillon Tribune reported on Oct. 19 that a citizen-led effort to put recreational sales on the ballot this November failed to gather the signatures to do so. 

The county, population 9,300, has reported almost $600,000 in medical marijuana sales through the end of September. A 3% tax that state law requires to be primarily split between the county and its municipalities would net $18,000 over a nine month period. 

Previously county officials have earmarked the potential tax revenue for a specific purpose ahead of the election. Beaverhead County Commissioner John Jackson said Tuesday commissioners have not tagged that potential funding for any department yet, but he would like to see it go toward public safety.

“In my opinion law enforcement is where it needs to go,” Jackson said, adding that the sheriff’s office isn’t hurting for funding, but he is “anti-drug.”

If each county approves those tax measures on Tuesday and Granite County allows recreational cannabis to return, all but three of the 28 “green” counties across Montana will have imposed a local option sales tax on marijuana sales.