Marijuana

A pile of medical marijuana is on display at Grizzly Pine Premium Cannabis in this Chronicle file photo.

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If Montana voters approve the ballot initiatives that legalize recreational marijuana this November, it could raise between $43.4 and $52 million dollars in tax revenue for the state.

That’s according to a new report by the Bureau of Business and Economic Research, or BBER.

The report, authored by BBER director Patrick Barkey and associate director Robert Sonora, found that legalized recreational marijuana could bring in over $236 million in tax revenue in the five years between 2022 and 2026.

The total market sales for retail marijuana, if legalized, could be as much as $217 million in 2022 and increase to $260 million in 2026. Those figures follow trends set by other states that have legalized the drug.

The report was commissioned by New Approach Montana, the group behind CI-118 and I-190, the initiatives to legalize, tax and regulate recreational marijuana in Montana.

BBER does not endorse or oppose any ballot initiatives, including the marijuana initiatives. The report, the authors said, exists to answer the financial “what if” questions that arise from the potential implementation.

“Our independent research utilized the extensive survey-based data that is publicly available, detailing the frequency of cannabis use of both Montana residents and visitors to give us a good understanding of potential tax revenue on legalized retail cannabis sales,” Barkey said in the news release.

The two initiatives would set the minimum age for buying marijuana at 21 and would set the tax rate for marijuana purchases at 20%. That 20% tax is what could bring in millions of dollars in tax revenue, potentially even more than the tax on alcohol.

BBER assessed the way the recreational marijuana markets began and evolved in states that have legalized to inform the report. It also used information from the National Survey on Drug Use and Health to predict how many people, both residents and tourists, would be potential customers of recreational marijuana.

According to the NSDUH, adults in Montana use marijuana recreationally at slightly higher rates than adults nationwide. In its 2017-2018 survey, 14.3% of Montanans over 21 said they used marijuana in the past 30 days. That’s higher than the national rate of 9.8%.

Those figures don’t differentiate between medical marijuana, which is legal in the state and has grown exponentially since 2016, and recreational marijuana, which is not legal. Medical marijuana has a 4% tax, which is expected to drop to 2% in 2021.

The report found that more than 15% of adult tourists are likely to visit dispensaries when visiting states with legal recreational cannabis sales. The legalization of recreational marijuana in Montana could also support other adjacent industries, like marijuana-cooking classes and weed-friendly bed and breakfasts, as it did in states like Colorado.

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Melissa Loveridge can be reached at mloveridge@dailychronicle.com or at (406) 582-2651.

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