A Montana judge has ordered state cannabis regulators to delay the enforcement of steep new fees for marijuana dispensary business licenses while a suit challenging the new fee structure is heard by the courts. The 60-day preliminary injunction was ordered by Lewis and Clark County District Court Judge Mike Menahan, with the move agreed to by attorneys for the state and three cannabis businesses that filed the legal action in August.

The plaintiffs in the case are challenging new fees established by the Montana Department of Revenue’s Cannabis Control Division under a law passed by the state legislature earlier this year. Under the new fee schedule, business owners are required to pay a fee of $5,000 for the first dispensary, with the fee increasing by $5,000 for each additional dispensary license.

“This means a license’s initial dispensary fee is $5,000, its second dispensary renewal fee is $10,000, its third is $15,000, and so on,” Angela LeDuc, an attorney for the plaintiffs, wrote in court documents filed last month, as reported by the Independent Record.

The owners of the businesses that brought the suit—Granite Peak Holdings, Inc. doing business as Elevated; TSB Montana LLC, and MariMint LLC—say that if the new licensing fees were to go into effect, they would be forced to close several dispensary locations. Such a move would result in layoffs for the employees who work at the shuttered weed dispensaries and a lack of access to medical marijuana for patients, the plaintiffs argued. Elevated noted in court documents the license fees for 10 of its dispensaries would increase by 680%, from $50,000 to $280,000.

“Enforcement would require Plaintiffs to cease many of their business operations through the state; it jeopardizes their licensure with the state and would result in the loss of their interest in those licenses; it would cause the loss of hundreds of jobs and expose Plaintiffs to liability based on their inability to continue to honor their leasehold interest in those dispensaries and it would jeopardize the medical marijuana patrons that they serve,” attorneys for the plaintiffs wrote in their amended complaint, according to a report from the Daily Montanan.

State Attorneys Defend New Fees

Attorneys for the Montana Department of Justice and the lawyers for the plaintiffs have spent months arguing if the new fee structure is legal. Under state law, the Montana Department of Revenue is prohibited from collecting fees beyond the costs of regulating the cannabis industry. Attorneys for the plaintiffs say that the new fees are far more than the revenue department’s costs to regulate the marijuana program.

Attorneys for the state countered that because Montana is the fourth-largest state in the union by land mass, regulators need more funding to adequately regulate the state’s marijuana industry.

“All of this takes time and resources for which the taxpayers of Montana should not be on the hook,” the state argued in a brief opposing a preliminary injunction.

The state’s attorneys also argued that the plaintiffs’ claims of injury by the new fees should not be upheld by the court because the business owners can avoid the charges by simply operating only one dispensary. The argument also suggested that the legal action was filed purely over money.

“There exists one reason and one reason only that Plaintiffs seek to open different marijuana industry locations under the same license – they want to make money,” the state argued in an October 24 court filing. “Logic dictates that if a fee of $5,000.00 for a new location is going to make or break that location, then it is not a profitable location and should not be opened in the first place. Plaintiffs just want to make more money at the expense of the taxpayers.”

The plaintiffs are also challenging the new fees on procedural grounds, arguing that they were added to the bill without an opportunity for public comment after the legislation had been approved in committee. Other legal issues in the case revolve around separate legislation that changes the conditions for preliminary injunctions like the one issued by Menahan.

Last week, attorneys for both sides agreed to a 60-day preliminary injunction to pause enforcement of the fees while the lawsuit is litigated. Under the agreement, the new license fees will be put on hold for all licensees, not just the dispensaries owned by the plaintiffs.

Menahan’s order allows him to extend the injunction beyond its current 60 days if both sides agree to an extension. The order also reinstates the fee structure in place before the new hikes and directs the Department of Revenue to return any of the new fees already collected. 

Attorneys for both sides in the case told the judge they are negotiating and hope to reach a settlement in the next 60 days.

The post Montana Judge Pauses New Fees For Weed Dispensaries appeared first on High Times.

The post Montana Judge Pauses New Fees For Weed Dispensaries appeared first on Paradise Found.

An Oklahoma cannabis activist has joined forces with three of the state’s medical marijuana providers to file a lawsuit against increased regulatory fees that went into effect last month. The legal action, which maintains that the fee increases are unconstitutional, was filed on Friday by Jeb Green, founder of Oklahomans for Responsible Cannabis Action, and the medical marijuana dispensaries Pharside, Oklahoma Natural Cures, and Bingo 101.

The lawsuit challenges a new fee structure for medical marijuana businesses signed into law by Oklahoma Republican Governor Kevin Stitt in May 2022. The measure, House Bill 2179 (HB 2179) raises the regulatory fees charged by the Oklahoma Medical Marijuana Authority (OMMA) for licensed medicinal cannabis businesses to operate in the state.

Previously, medical marijuana operators paid a flat fee of $2,500 for each licensed business. But under HB 2179, which went into effect on June 1 of this year, fees were hiked dramatically, with the largest cannabis cultivation operations now slated to pay up to $50,000 per year.

The lawsuit filed last week maintains that the fee increases authorized by the legislation constitute a “revenue-raising” measure, which under Oklahoma state law must be passed with at least a 75% majority of the members in both the Oklahoma Senate and the state House of Representatives. Additionally, revenue-raising bills may not be passed in the final five days of the legislative session. 

But HB 2179 did not achieve the required supermajority and was passed in the closing days of the 2022 legislative session and was passed in the final days of the 2022 legislative session. The plaintiffs maintain that HB 2179 is not a simple regulatory bill because it does not add any new regulations intended to be funded by the new fees.

“In other words, the thrust of the legislation is not regulatory in nature but is designed to raise revenue instead,” the lawsuit states, as quoted by The Oklahoman. “Even if licensing fees provide some financial support to the OMMA, those fees are not closely tied to the cost of service for which they are imposed.”

The plaintiffs estimate that the new fees authorized by the legislation will increase licensing revenue collected by OMMA by at least $28,580,000 each year. The actual amount could be higher, they note, because some medical marijuana companies would be placed in different fee tiers based on the size of the operation. 

The lawsuit claims that the increased fees are a violation of the Oklahoma Constitution and should be overturned. Additionally, the plaintiffs allege that HB 2179 created a discriminatory “special law” because it contains a tiered fee structure for some businesses but not others.

“Our challenge to (the law) is about more than cannabis. This is a constitutional question that affects every Oklahoma taxpayer. We are respectfully requesting that the court consider our plea,” said Green. “Our medical marijuana program has been revenue-positive since Day One. It has contributed hundreds of millions of dollars in revenue the last five years. The license fee increases on our industry are not needed to support regulation.”

HB 2179 is not the only legislation passed to tighten the regulations for Oklahoma’s medical marijuana program. After a ballot initiative to legalize recreational marijuana in Oklahoma failed to gain voters’ approval in March, lawmakers introduced dozens of bills proposing stricter regulations on the state’s medical marijuana providers. Nine of the measure were approved by lawmakers and signed into law by Stitt. Among them is SB 18X, which creates a Medical Marijuana Tax Fund under the control of the state legislature that will accrue medical marijuana tax revenue collected by the state for appropriation to OMMA.

The post Oklahoma Medical Cannabis Firms File Suit To Block Fee Increases appeared first on High Times.

The post Oklahoma Medical Cannabis Firms File Suit To Block Fee Increases appeared first on Paradise Found.