The recreational cannabis market in Montana topped $1.5 million in sales in its first weekend, according to the state revenue department.
With a statewide 20% sales tax on recreational cannabis, that opening weekend haul — $1,566,980 — amounts to $313,396 in tax revenue for the state.
The Department of Revenue's Cannabis Control Division tallied a combined total of $1,999,597 with recreational and medical sales last Saturday and Sunday. The 4% tax on the $432,617 in medical sales provided an additional $17,305 in tax revenue to the state.
“The rollout of the adult-use program went off without any issues from the department’s supported IT systems," Cannabis Control Division Administrator Kristan Barbour said Tuesday in an email. "We were able to successfully verify with (the) industry that our licensing and seed to sales systems were working on Friday to ensure a successful launch on Saturday, Jan. 1, 2022. The successful launch was a result of staff’s hard work and planning over the past six month to meet the challenges of implementing HB 701.”
House Bill 701 was the state Legislature's framework for the recreational cannabis market and the revenue department's role in that system.
Missoula, Yellowstone, Park and Dawson counties have each implemented an additional 3% local sales tax in recent elections. Those taxes, however, do not go into effect until 90 days after the elections to implement the tax, and do not factor into the weekend sales numbers.
Recreational cannabis sales went live in 29 counties on New Year's Day, while 27 continue a ban on recreational cannabis. The arrangement is a feature of the regulatory framework passed by the state Legislature: whether or not a county allows recreational cannabis sales depends on whether the county approved the legalization ballot initiative in the 2020 election. This split was not projected to crater the state's potential tax revenue windfall, however, with roughly 90% of the state population located in the so-called "green" counties.
The Governor’s Office of Budget and Program Planning projected $130 million in recreational sales in 2022, climbing to $195.5 million in 2023 once the moratorium on new businesses ends.
Because the Department of Revenue does not track consumer data on recreational cannabis sales, purchases by out-of-state residents are unknown.
The first $6 million in tax revenue will pour into the Healing and Ending Addiction through Recovery and Treatment (HEART) Fund, a new substance use disorder treatment and addiction recovery program. The fund was first proposed by Gov. Greg Gianforte, who listed it among his list of accomplishments during his first year in office at a press conference Tuesday.
"We took steps to combat the drug epidemic, created the Heart Fund and Angel Initiative, to help folks struggling with addiction to get the treatment they need," Gianforte said.
Of that first $6 million pool, $500,000 will be allocated to Indian Health Services in Montana. Once the HEART Fund bucket is filled, 20% of the remaining funds go to Montana Department of Fish, Wildlife & Parks to fund wildlife habitat; state parks, trails and nongame wildlife accounts each receive 4%; 3% goes to a special state account for veterans and surviving spouses; $150,000 goes to the Montana Board of Crime Control and the rest goes to the state general fund.
Pepper Petersen, president and CEO of the Montana Cannabis Guild and the face of the legalization campaign in 2020, said the industry anticipated a "healthy opening."
"This is a great start to what will prove to be a significant tax contribution from Montana's cannabis industry," Petersen said.
— Deputy Montana State News Bureau Chief Tom Kuglin contributed to this story.