VC Commissioners Approve Putting Marijuana Excise Tax On November Ballot

After initially meeting on July 20 and then postponing the final decision until July 27, the Valley County Commissioners voted to put Resolution No. 19-2022 on the November ballot, which would present to voters the question of a three percent excise tax on the sale of medical marijuana and adult use marijuana. The vote by the commissioners was not unanimous, with Commissioner Paul Tweten and John Fahlgren voting in favor while Commissioner Mary Armstrong opposed the resolution, expressing her desire to remove the medical marijuana option and just leave the adult use marijuana on the ballot.

Due to the majority vote from the Commissioners to proceed, voters will be able to decide if the tax is applied to both medical and adult use marijuana, or one or the other as the ballot questions will be separate from each other. If passed, the three percent tax would go into effect 90 days after the Nov. 8 election. The resulting tax revenue will be split with 50 percent being retained by Valley County, 45 percent would be apportioned to the municipalities of Valley County, Fort Peck, Nashua, Glasgow and Opheim, on the basis of the ratio of the population of the city to the total county population and the remaining five percent would be retained by the Montana Department of Revenue to defray costs associated with administrating the tax.

The July 27 decision was a week in the making, as the Commissioners first discussed the resolution on July 20. At that time, Valley County Commissioners who were in attendance, Paul Tweten and Mary Armstrong, both voiced support for Resolution No. 19-2022 but wanted to have Commissioner John Fahlgren present as well as provide the opportunity for the public to provide their comments, before moving forward with the process. The July 27 meeting had all three Commissioners in attendance as well as local business owners who sell both medical and recreational marijuana in Valley County.

Brandon Hoerner, of Wild Sky Farms in Glasgow, expressed how the implementation of the taxes would negatively impact not only his business but the community as well. He explained the higher cost of cannabis would result in people going to the black market to purchase, which is unregulated and as a result the consumer would not have the safe guards in place to know what they are actually consuming. He also stated 98 percent of the business that walks through the doors of Wild Sky Farms is from Valley County with one percent from surrounding counties. “There’s a lot of our customers who are on fixed income, now you’re going to tax them for, not only recreational but possibly medical as well, so they can get their medicine. I don’t think that’s right,” he stated to the Commissioners. He also explained if the tax would go into affect it would make it harder for the business to shop locally, stating “That just makes it harder for me to spend money in this town because I can get what I need online....We have not done that not once other than on specific equipment. If I have to save three percent or tighten up shop, I can’t spend the money in this community that we’ve been spending and it’s a lot of money, more than what’s going to come off of the sales generated at three percent.” He also explained the company employs five full-time people who utilize their money to shop in the community and if the tax would go into effect, the business may have to cut hours to some or lay one of them off as he can not pass that along to the customer due to cannabis already being taxed. At this time, the State of Montana has a 20 percent on the sales of recreational marijuana and a four percent tax on the sales of medical marijuana.

Carlos Valle, who is a Hi-Line apothecary out of Nashua and founded the grow operation, also commented on the problems that are seen in other areas where a tax is applied to the sale of marijuana. He also had concerns regarding how the funds would be used as the resolution states “authorizes the use of such revenue to be used for any activity, undertaking, or administrative service that the municipality is authorized by law to perform, including costs resulting from the imposition of the tax...” Valle expressed how the resolution is written, there is gray area on how the funds will be used. “I think if we’re going to put this on the ballot, and even have that, I think that should be a little bit more pointed on what the money is going to be used for because to arbitrarily just raise, for example, your guys’ salary because that’s needed, that’s not in my opinion a very good use of funds necessarily versus if this is going to go to schools, to roads, to police enforcement, that would be a different issue....You guys might want to rethink how that resolution would be put on to actually give the voters an opportunity to see where this money would be going and how it would be used.”

Commissioner Fahlgren explained that is how the law is written in terms of other funds that they get stating “That’s our responsibility to decide how to do it, for example, we’re thinking that maybe this will generate to the county possibly $20,000. It’s not a lot of money....That’s not going to fund a new position or anything like that.” He also explained the Commissioners have discussed putting the money into a specific item, similar to the alcohol tax money that is generated, which, by law, they have to commit to where the funds will go and they commit the funds to the Eastern Montana Mental Health. However the way the law is written up it’s not required to designate a specific place for the funds to go in the event the excise tax would pass and the current Commissioners didn’t want to tie future Commissioners to where the funds will go.

After further public comments were made Commissioner Twten made the motion to pass Resolution No. 19-2022 to be put on the ballot stating “I make a motion to pass Resolution 19-2022 to the voters to see if they want to put the three percent option tax on marijuana.” Commission Armstrong seconded in order to further discuss the resolution. She stated “My concern is the medical marijuana portion of it. So I will prefer to see that taken off and we only go to the voters with the recreational option. I personally don’t think we should be taxing medical.” Commissioner Fahlgren acknowledged a gray area as not everyone who has a marijuana card is dependent on it for their medical well-being, while Commissioner Tweten stated “My opinion is let’s put them both on the ballot and we’ll see what the people say.”

After the discussion, Commissioner Twten and Commissioner Fahlgren expressed support for the resolution while Commissioner Armstrong was opposed. The resolution will now go to the voters in the Nov. 8 election to decide.