Montana lawmakers on Monday passed a bill to allocate revenue from taxes on recreational marijuana, sending the bill to the desk of Republican Governor Greg Gianforte for his consideration. The legislation, Senate Bill 442, was approved in a final vote by the Montana Senate on Monday after the state House of Representatives passed an amended version of the bill last week.

Montana voters legalized recreational marijuana in 2020 with the passage of Initiative 190, a ballot measure that passed with nearly 57% of the vote. Under the initiative, a tax of 20% was levied on recreational marijuana products, with revenue generated by the tax reserved for Habitat Montana, a 30-year-old wildlife habitat acquisition initiative often described as Montana’s “premiere habitat program,” according to a report from the Montana Free Press.

Governor Sought Reallocation Of Cannabis Taxes

Before the start of this year’s legislative session, the governor revealed his desire to reallocate the state’s recreational marijuana taxes away from habitat purchases and instead spend the money on law enforcement resources related to legalizing marijuana. Lawmakers responded with several new proposals, arguing that reallocating recreational marijuana taxes would allow the state to meet other pressing budgetary needs and give the legislature more control of the revenue.

In the original version of Senate Bill 442, which was introduced in February by Republican state Senator Mike Lang, a portion of cannabis tax revenue was diverted away from the habitat fund and instead allocated to funding for county roads. Supporters of the proposal maintained that the bill would support access to rural areas and open spaces. But wildlife advocates balked at the proposal, claiming it defied the will of the voters as expressed through Initiative 190.

Lang then amended the bill to divide the bulk of cannabis tax revenue among the state’s general fund, funding for county roads and a new Habitat Legacy Account, which would be used for wildlife improvements on public and private land. Smaller allocations would also be made to fund substance misuse programs, veterans services and funding for state parks and trails.

“I think we’ve made some pretty smart changes here that are intended to invest in rural Montana’s roads, lands and hunting opportunities while providing support for our veterans and a growing need for drug treatment,” Lang said after revising the bill. “At the end of the day we want to give our local counties and local people the tools and resources they need to improve the conditions of the land and be good stewards of Montana.” 

The amended bill received support from state lawmakers and groups representing business interests including the Montana Stockgrowers Association and the Montana Petroleum Association, and conservation organizations such as Wild Montana, Helena Hunters and Anglers and the Citizen’s Elk Management Coalition, all registered support for the proposal. Many county commissioners and the Montana Association of Counties also indicated their approval of the measure.

“Our county roads are being used more than ever now,” said Roman Zylawy, president of the Montana Association. “Recreation and agriculture are part of our Montana way of life and this bill recognizes the importance of — and the need for — integration of all through an investment in our county roads. … The Montana Association of Counties thanks you all and we encourage, with the utmost respect, Gov. Gianforte to sign SB 442 and provide ongoing investment in our county roads.”

Competing Bill Dies In Senate

A separate bill that would have directed all cannabis tax revenue to the state’s general fund passed in the House of Representatives last month. Proponents of the measure, House Bill 669 from Representative Bill Mercer, argued that lawmakers would be able to control the allocation of tax revenue and direct it to state budget priorities.

“Under 669, it would simply say that that revenue should go to the general fund and the Legislature as a whole should decide how it wishes to spend that revenue,” Mercer told members of the House Appropriations Committee last month. “One of the reasons that I wanted to bring this bill is that I fear that, when you essentially begin to earmark dollars for special revenue accounts, they evade review on an ongoing basis. Every time we have a diversion into a special revenue account, I worry that it doesn’t get the same sort of scrutiny that it does in the general fund.”

But Jim Vashro, president of Flathead Wildlife Inc said that the will of Montana voters as expressed in the 2020 ballot measure legalizing recreational marijuana should prevail.

“We would hope that the Legislature would listen to the voice of the people,” Vashro said. “We are trying to protect the Habitat Montana funding, which was the stated intent of Initiative 190.”

House Bill 669 was tabled by a Senate committee late last month. Senate Bill 442 has been sent to the governor’s desk and awaits action from Gianforte. On Monday, a spokesperson for Gianforte said that the governor “has substantial concerns” about Senate Bill 442 but did not provide further details on his position. 

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