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Correcting the record on Montana's marijuana tax

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In the past, I have appreciated much of Dan Brooks's work. But Brooks's column "Is the Revenue Department ready for Montana's weed tax tidal wave?" (June 8) reads like an uninformed letter to an editor.

Where to start? With phrases like "ask any doctor" about abuses in the medical marijuana system without having asked any doctors, or at least not reporting that he had; or implying that dispensary owners are all hustling recreational use under the cover of medical?

Or, we can go straight to Brooks's larger point. Brooks asserts that the legislature's principles "couldn't tolerate a tax to pay for schools" but were willing "to tax pot to pay for whatever." Brooks did not read, or understand, the bill, or even the provision he targeted, or he would know the tax is on producers and it goes to pay for regulating the program, nothing else, not "whatever."

Montana has had a medical marijuana law since 2004. The 2016 initiative, I-182, provided real oversight provisions (inspections) for the first time. The 2017 legislation, SB 333, includes the 4 percent year-one tax that Brooks references (it drops to 2 percent thereafter, which Brooks doesn't mention). SB 333 provides for seed-to-sale tracking; square footage licensing, which provides a more accurate read on statewide production than plants per patient; mandatory testing; and residency requirements. The tax pays to implement and administer the provisions. Given Brooks's assertions about abuses in the program, one would think he would appreciate and welcome greater oversight.

Brooks also mocks the idea of tax collection on medical marijuana businesses because they are largely cash businesses. He sarcastically states that "it might be a good idea" for the Department of Revenue to get a secure room in order to deal with the cash. He says, "Now is a good time to invest in armored car companies."

In fact, such a room is included in the fiscal note of the bill, as is an armored car.

Brooks is correct that the medical marijuana program is primarily a cash business, and that banking is often a challenge for providers, and there can be challenges to government in dealing with revenue. It is also true, though, that there are federal guidelines for banks regarding providing accounts for state-legal marijuana providers. Licensing is critical to Montana's ability to utilize these guidelines. This is one of the many reasons I-182 required provider licensing. Licensing should be implemented within the next few months.

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In addition, Montana just launched its pilot program for industrial hemp. Industrial hemp is just as illegal under federal law as marijuana. The Farm Bill of 2014 provides for state hemp pilot programs. The Consolidated Appropriations Act provides federal allowances for state medical marijuana programs. If hemp growers aren't going to be a problem for banks and the government processing of cannabis-generated revenue, medical marijuana providers shouldn't be either.

But yes, it takes some time to make these shifts and educate stakeholders.

Finally, Brooks refers to the November initiative as making medical marijuana easier to buy and sell. What the initiative did was make the buying and selling of medical marijuana safer for patients, providers and communities. It restored the program from a complete shutdown to the provisions under which it operated from 2011 until August 2016, that is, the 2011 legislation (SB 423) as enjoined by the court. Plus, I-182 required licensing and inspections of providers. Inspections will not make the selling of medical marijuana easier. The legislation won't make it easier, either. It will make it more labor intensive, and costly, in service of greater accountability, transparency, containment and safety.

Medical marijuana is at the beginning of being properly regulated in Montana after years of being ignored, or worse, sabotaged, by the state legislature. The bill sponsor and Senate and House tax committees put considerable time into the new regulations in recognition that the people have spoken and passed initiatives allowing access to medical marijuana not once, but twice. For the first time, the Montana Legislature took the subject seriously. They are to be commended, not mocked, by a writer who doesn't seem to know much about the status of Montana's medical marijuana law and program.

Currently, the departments of Health and Human Services, Revenue, Justice and Agriculture are doing the post-session work of implementing the legislation. The task is new. It will be challenging, and bumpy. But a shout-out to those undertaking the task is more in order than a condescending rant that's ignorant of the important work being done in Montana.

Kate Cholewa is a Montana writer and consultant. She does government-relations work on behalf of the Montana Cannabis Industry Association.

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