County sending local marijuana tax question to November ballot
County Commissioners voted unanimously during their June 21 meeting to put the question of a three percent local tax on marijuana sales on the November ballot.
The county can, if voters approve, implement a combined three percent local tax on all medical and non-medical marijuana sold in the county.
On the same November ballot, the city is planning to ask voters whether marijuana should remain prohibited within the city limits.
If approved, the county would retain 50 percent of the tax revenues, five percent would go to the Montana Department of Revenue and 45 percent would go to municipalities in the county.
According to the county, that would be split among the incorporated cities and towns based on the ratio of their population to the total county population. That would include the City of Great Falls, Belt, Cascade and Neihart.
If approved by voters, the tax would go into effect on Feb. 6, 2023.
During the County Commission work session, the county attorney’s office said that so far this year, the state had generated $123 million in marijuana sales, resulting in $17 million in tax revenue. For recreational marijuana sales, the state taxes 20 percent that stays with the state.
For Cascade County, Phoebe Marcinek in the county attorney’s office said that they estimate $1.6 million in marijuana sales monthly which the three percent tax would equate to about $50,000 countywide that would be split between the municipalities in the county.
The revenue numbers referenced by commissioners during their work session and their regular meeting are not included in the agenda packet documents posted to the county website for the June 21 meeting.
Commissioner Don Ryan said that after the state legalized recreational marijuana sales that local addiction counselors had called to ask where the tax revenues were in the county.
When recreational marijuana was legalized, it included a 20 percent tax that goes entirely to the state. The law gave counties the option to implement a local tax, but that requires a public vote.
In December 2021 when the county commission updated the zoning regulations to allow recreational marijuana only in the heavy industrial districts, they did not consider the local option tax.
At the time, Ryan told The Electric that he wasn’t aware of any discussion of a local marijuana tax.
“If we got push from the public, we would probably look at it. My only fear is that too many taxes might encourage black market sales. The 20 percent might do that now, we will see. Because of the regulations and monitoring of production and sales the legal purchases are the only guarantee of ‘safe’ product that is not contaminated or laced with other harmful products,” Ryan said in the email.
During the June 21 meeting, he said some members of the public had asked the county to tax marijuana to put the revenues toward dealing with drug addiction issues in the county.
Ryan said during this week’s meeting that if voters approve the local option tax, the commissioners will have a discussion on how to use those tax revenues.
“We’re not guaranteeing” where this money will go, Ryan said during the June 21 meeting.
Under state law, the local option tax funds can be used “for any activity, undertaking or administrative service that the county is authorized by law to perform, including costs resulting from the imposition of the tax or due to administrative burdens imposes on the county as a result of licensing or regulatory requirements,” according to the county documents.
Several residents have asked county commissioners to put the question of whether marijuana should be on the November ballot. The county attorney’s office determined that they believe that question must be initiated by a petition from local residents, which hasn’t been presented to the county at this point.