Montana: Ordinance committee to recommend pursuing 3 percent recreational marijuana tax

Libby’s ordinance committee agreed last week to lobby county officials for an additional tax on recreational marijuana even as the group works on how sales will work in the city.

State rules allow localities to place an extra 3 percent tax on top of recreational sales, which are set to begin in January. Helena already plans to tax recreational sales at 20 percent.

To add the extra tax, localities must first put it before voters in an election. City Councilor Kristin Smith, who heads the ordinance committee, said Dec. 7 it made sense to get rolling on the taxation side while drafting rules for local cannabis shops.

“The city has to ask the county to initiate that tax, which — we could make that recommendation right now,” Smith said. “Because, actually, that’s going to take some time.”

So far, Missoula, Park and Yellowstone counties have approved the local tax on recreational sales. The latter two counties also upped a local tax on medicinal marijuana.

Retail recreational marijuana remains legal only in counties that voted “green,” or in favor of the ballot initiative that legalized the substance in Montana in 2020. Along with an extra tax, county officials also could ask local voters to switch the jurisdiction’s stance on recreational marijuana.

Smith said at the conclusion of last week’s gathering that she planned to put the committee’s recommendation for an extra tax before the full city council. It’s the second such meeting the ordinance committee has held on the issue and members spent much of it adding more details to proposed regulations.

While the Montana Legislature already laid out most of the nuts and bolts for recreational cannabis sales in the state with House Bill 701 — think proximity restrictions vis-à-vis schools, packaging stipulations and a ban on drive-thru windows — localities can impose further requirements.

“The state law is very robust, it’s very thorough,” Smith said. “Anything we do locally is just suspenders and very specific to our community’s desires.”

Much of the discussion in Libby surrounded reaching the right amount of marijuana storefronts within city limits. To do so, committee members debated the spacing between future shops, beginning with a 500-foot buffer.

Working off of quick and dirty calculations, committee member and City Councilor Brian Zimmerman estimated that the limitation would still allow for as many as 20 marijuana storefronts between U.S. Highway 2, Mineral Avenue and California Avenue. After factoring in churches, schools and parks, he dropped his estimate to between 10 and 20, which committee members and attendees agreed remained too high.