Medical marijuana will soon give a small boost to Montana’s general fund that could eventually rise to hundreds of thousands of tax dollars annually.
Thanks to a new law that went into effect this July, the state will soon collect taxes on about $18.75 million in medical marijuana sales in 2017, the first year
That estimate, released Tuesday by the Montana Department of Revenue, adds up to hundreds of thousands of dollars in tax revenue as providers begin submitting 4 percent of gross sales.
The department expects the state will collect $750,000 in tax revenue in the first year of SB 333, the legislation that authorized medical marijuana in Montana.
Due to administrative and startup costs to the new bill, the general fund will see only a fraction of that money this year, state officials said.
“After you factor the startup costs for the systems, you’re down to only about $30,000 net impact to the general fund,” said Mary Ann Dunwell, Department of Revenue public information officer.
Those costs include computer systems, cash intake locations, seed-to-sale tracking, ID cards and others. The Department of Health and Human Services also incurred costs for the bill.
While medical marijuana taxes would be a nice shot in the arm for the state, they’re a drop in the bucket compared to the millions in cuts ordered by Gov. Steve Bullock to offset drops in income and other tax collections and unexpected firefighting costs.
The second year of the medical marijuana tax, which will be lowered to 2 percent, will generate $380,000. The state will net $300,000 for the general fund, according to Revenue.
“Our state budget is hurting, unless we generate some sort of revenue and this is an opportunity to do that,” said Dunwell.
As of late March, the state had nearly 12,000 registered patients.
Each patient, based on the March statistic of patients, would spend roughly $1,500 per year on medical marijuana.
The fiscal impact is still a moving target, state officials say.
Of the 600 registered providers, the Department of Revenue has only received 46 returns before the Oct. 15 deadline.
The Department of Revenue couldn’t immediately release the number of providers in Yellowstone County.
credit:420intel.com
