Bill Summary – FastDemocracy

67th Legislature                                                                                          HB 701.1
                                              HOUSE BILL NO. 701
                          INTRODUCED BY M. HOPKINS, R. MARSHALL, B. PUTNAM
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   A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING LAWS RELATED TO THE REGULATION
   AND TAXATION OF MARIJUANA; TRANSFERRING AUTHORITY OVER THE LICENSING, CULTIVATION,
   AND SALE OF MEDICAL MARIJUANA TO REGISTERED CARDHOLDERS TO THE DEPARTMENT OF
   REVENUE ; CREATING SEPARATE LICENSE CATEGORIES FOR CULTIVATION, MANUFACTURING,
   DISPENSING, AND TRANSPORTING MARIJUANA; PROVIDING FOR EIGHT COMBINED-USE MARIJUANA
   LICENSES; CREATING A MARIJUANA WORKER PERMIT; PROVIDING FOR A LOCAL-OPTION
   MARIJUANA EXCISE TAX; REQUIRING LOCAL GOVERNMENT APPROVAL FOR A MARIJUANA
   BUSINESS TO OPERATE IN A LOCAL JURISDICTION; PROVIDING AN APPROPRIATION; PROVIDING
   RULEMAKING AUTHORITY; AMENDING SECTIONS 5-5-227, 7-22-2101, 15-64-101, 15-64-102, 15-64-103,
   15-64-104, 15-64-105, 15-64-106, 15-64-111, 15-64-112, 16-12-101, 16-12-102, 16-12-104, 16-12-105, 16-12-
   106, 16-12-107, 16-12-108, 16-12-109, 16-12-110, 16-12-111, 16-12-112, 16-12-201, 16-12-202, 16-12-203,
   16-12-204, 16-12-206, 16-12-207, 16-12-208, 16-12-209, 16-12-210, 16-12-211, 16-12-301, 16-12-302, 17-6-
   606, 17-6-610, 18-7-101, 37-1-136, 37-1-316, 37-3-203, 39-2-210, 39-2-313, 39-71-407, 41-5-216, 44-4-1205,
   45-9-101, 45-9-102, 45-9-103, 45-9-110, 45-9-127, 45-9-203, 45-10-103, 45-10-107, 46-18-202, 50-46-302, 50-
   46-303, 50-46-307, 50-46-319, 50-46-345, 50-46-346, 50-46-347, 53-6-1201, 53-21-1207, 61-8-402, 61-8-404,
   61-8-405, 61-8-409, 61-8-442, 61-11-101, AND 80-1-104, MCA; AMENDING SECTION 56, INITIATIVE
   MEASURE NO. 190, APPROVED NOVEMBER 3, 2020; REPEALING SECTIONS 16-12-205, 16-12-401, 16-
   12-402, 16-12-403, 16-12-404, 16-12-405, 16-12-406, 16-12-407, 16-12-408, 50-46-301, 50-46-302, 50-46-
   303, 50-46-304, 50-46-305, 50-46-307, 50-46-308, 50-46-309, 50-46-310, 50-46-311, 50-46-312, 50-46-317,
   50-46-318, 50-46-320, 50-46-326, 50-46-327, 50-46-328, 50-46-329, 50-46-330, 50-46-331, 50-46-332, 50-46-
   339, 50-46-340, 50-46-341, 50-46-342, 50-46-343, 50-46-344, 50-46-345, 50-46-346, AND 50-46-347, MCA;
   REPEALING SECTIONS 37 AND 52, INITIATIVE MEASURE NO. 190, APPROVED NOVEMBER 3, 2020;
   AND PROVIDING EFFECTIVE DATES AND A TERMINATION DATE.”
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   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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67th Legislature                                                                                                      HB 701.1
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              NEW SECTION. Section 1.         Hotline. (1) The department shall create and maintain a hotline to
   receive reports of suspected abuse of the provisions of this chapter.
              (2)   The department may:
              (a)   investigate reports of suspected abuse of the provisions of this chapter; or
              (b)   refer reports of suspected abuse to the law enforcement agency having jurisdiction in the area
   where the suspected abuse is occurring.
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              NEW SECTION. Section 2.         Department to conduct background checks. (1) In addition to any
   other requirement imposed under this chapter, before issuing any license under this chapter the department
   shall conduct:
              (a)   a fingerprint-based background check meeting the requirements for a fingerprint-based
   background check by the department of justice and the federal bureau of investigation in association with an
   application for initial licensure and every 3 years thereafter; and
              (b)   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.
              (2)   For the purpose of the background records check required under subsection (1), the department
   shall 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:
              (a)   each partner of an applicant that is a limited partnership;
              (b)   each member of an applicant that is a limited liability company;
              (c)   each director and officer of an applicant that is a corporation;
              (d)   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
              (e)   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
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67th Legislature                                                                                                   HB 701.1
   license.
              (3)   (a) Except as provided in subsection (3)(b), an employee of a marijuana business shall undergo a
   criminal background check prior to beginning employment.
              (b) An employee of a former medical marijuana licensee in good standing with the department as of
   [the effective date of this section] shall undergo a criminal background check within 90 days of [the effective
   date of this section].
              (4)   The department may establish procedures for obtaining fingerprints for the fingerprint-based and
   name-based background checks required under this section.
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              NEW SECTION. Section 3.        Licensing of marijuana transporters. (1) (a) 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.
              (b)   A marijuana transporter may contract with multiple licensed marijuana businesses.
              (c)   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.
              (d)   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).
              (2)   A person who obtains a testing laboratory license and any other 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.
              (3)   A registered cardholder or consumer is not required to possess a marijuana transporter license
   when purchasing marijuana or marijuana products at a dispensary.
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              (4)   A person who obtains a cultivator license, manufacturer license, adult-use dispensary license, or
   medical marijuana dispensary license or is an employee of one of those licensees, may:
              (a)   transport marijuana or marijuana products between other licensed premises without a transporter
   license so long as such transportation:
              (i)   complies with rules implementing the seed-to-sale tracking system set forth in 16-12-105; and
              (ii) includes a printed manifest containing information as required by the department; and
              (b)   deliver marijuana from a dispensary to a registered cardholder provided that the person delivering
   the marijuana or marijuana products:
              (i)   complies with rules adopted by the department; and
              (ii) 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.
              (5)   (a) A marijuana transporter licensee may maintain a licensed premises to temporarily store
   marijuana and marijuana products and to use as a centralized distribution point.
              (b)   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.
              (c)   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.
              (6)   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.
              (7)   A marijuana transporter may deliver marijuana or marijuana products to licensed premises only
   and may not make deliveries of marijuana or marijuana products to individual consumers or registered
   cardholders.
              (8)   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.
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67th Legislature                                                                                                         HB 701.1
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               NEW SECTION. Section 4.         Licensing of cultivators. (1) (a) The department shall license cultivators
   according to a tiered canopy system. All cultivation that is licensed under this chapter may only occur at an
   indoor cultivation facility.
               (b)    The system shall include, at a minimum, the following license types:
               (i)    A micro tier canopy license allows for a canopy of up to 250 square feet at one indoor cultivation
   facility.
               (ii) A tier 1 canopy license allows for a canopy of up to 1,000 square feet at one indoor cultivation
   facility.
               (iii) A tier 2 canopy license allows for a canopy of up to 2,500 square feet at up to two indoor cultivation
   facilities.
               (iv) A tier 3 canopy license allows for a canopy of up to 5,000 square feet at up to three indoor
   cultivation facilities.
               (v)    A tier 4 canopy license allows for a canopy of up to 7,500 square feet at up to four indoor
   cultivation facilities.
               (vi) A tier 5 canopy license allows for a canopy of up to 10,000 square feet at up to five indoor
   cultivation facilities.
               (vii) A tier 6 canopy license allows for a canopy of up to 13,000 square feet at up to five indoor
   cultivation facilities.
               (viii) A tier 7 canopy license allows for a canopy of up to 15,000 square feet at up to five indoor
   cultivation facilities.
               (ix) A tier 8 canopy license allows for a canopy of up to 17,500 square feet at up to five indoor
   cultivation facilities.
               (x) A tier 9 canopy license allows for a canopy of up to 20,000 square feet at up to six indoor cultivation
   facilities.
               (xi)   A tier 10 canopy license allows for a canopy of up to 30,000 square feet at up to seven indoor
   cultivation facilities.
               (c)    A cultivator shall demonstrate that the local government approval provisions in 16-12-301 have
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   been satisfied for the jurisdiction where each proposed indoor cultivation facility or facilities is or will be located.
              (d)   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.
              (e)   A cultivator may apply to advance to the next licensing tier in conjunction with a regular renewal
   application by demonstrating that 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.
              (2)   The department is authorized to create additional tiers as necessary.
              (3)   The department may adopt rules:
              (a)   for inspection of proposed indoor cultivation facilities under subsection (1); and
              (b)   for investigating owners or applicants for a determination of financial interest; and
              (c)   in consultation with the department of agriculture and based on well-supported science, to require
   licensees to adopt practices consistent with the prevention, introduction, and spread of insects, diseases, and
   other plant pests into Montana.
              (4)   Initial licensure and annual fees for these licensees are:
              (a)   $1,000 for a cultivator with a micro tier canopy license;
              (b)   $2,500 for a cultivator with a tier 1 canopy license;
              (c)   $5,000 for a cultivator with a tier 2 canopy license;
              (d)   $7,500 for a cultivator with a tier 3 canopy license;
              (e)   $10,000 for a cultivator with a tier 4 canopy license;
              (f)   $13,000 for a cultivator with a tier 5 canopy license;
              (g)   $15,000 for a cultivator with a tier 6 canopy license;
              (h)   $17,500 for a cultivator with a tier 7 canopy license;
              (i)   $20,000 for a cultivator with a tier 8 canopy license;
              (j)   $23,000 for a cultivator with a tier 9 canopy license; and
              (k)   $27,000 for a cultivator with a tier 10 canopy license.
              (5)   The fee required under this part may be imposed based only on the tier of licensure and may not
   be applied separately to each indoor cultivation facility used for cultivation under the licensure level.
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              NEW SECTION. Section 5.         Licensing of dispensaries. (1) 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.
              (2)   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.
              (3)   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.
              (4)   A medical marijuana dispensary is authorized to sell exclusively to registered cardholders
   marijuana, marijuana products, and live marijuana plants.
              (5)   An adult-dispensary is authorized to sell marijuana or marijuana products to consumers or
   registered cardholders.
              (6)   The department shall charge a dispensary license fee for an initial application and at each
   renewal. The dispensary license fee is $5,000 for each location that a licensee operates as an adult-use
   dispensary or a medical marijuana dispensary.
              (7)   The department may adopt rules:
              (a)   for inspection of proposed dispensaries;
              (b)   for investigating owners or applicants for a determination of financial interest; and
              (c)   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.
              (8)   (a) 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.
              (b)   Except as provided in subsection (8)(c), for purposes of this chapter, a single package is limited
   to:
              (i)   for marijuana sold as flower, 1 ounce of usable marijuana. The total potential psychoactive THC of
   marijuana flower may not exceed 35%.
              (ii) for a marijuana product sold as a capsule, no more than 100 milligrams of THC per capsule and no