Montana Cannabis Companies and State Agree to 60-Day Injunction Against Increased Licensing Fees

Three Montana cannabis licensees and the state last week agreed to a joint agreement to allow a 60-day preliminary injunction against a state law that increased licensing fees for businesses that operate multiple dispensaries, KTVH reports. The agreement in the lawsuit filed by cannabis business owners in the state gives the plaintiffs and the state time to come to a negotiated settlement.

Under the law, which passed at the end of the 2023 legislative session, dispensary owners would pay $5,000 for the first dispensary, $10,000 for the second, and another $5,000 added to the fee for each additional. Under the previous state law, businesses paid a flat $5,000 fee for each additional dispensary.

Granite Peak Holdings, one of the plaintiffs in the lawsuit, said that under the new regime, it would have to pay $525,000 in fees for its 14 active dispensaries, compared to $70,000 under the previous law.

“If the State is not enjoined from implementing its newly enacted fee structure, Plaintiffs will have to shut down many of their dispensary locations,” the lawsuit contends, “resulting in employee job losses, harm to the public who utilize the Plaintiffs’ dispensary locations, loss of value in their owned and leased locations, and liability arising from probable breaches of their lease obligations.”

Two other licensees – TSB, which operates 15 Top Shelf Botanicals dispensaries, and MariMint, which operates five dispensaries – expressed the same concerns in the lawsuit and further argued the new fee structure would be an unjustified “taking” of their property, the report says.

The Montana Department of Justice argues that the state does have legitimate regulatory costs when licensees decide to open additional dispensaries and that the plaintiffs couldn’t establish that there is a taking of property simply because they don’t have the opportunity for more locations.

“The burden on Plaintiffs is minimal,” the state said in the filing. “There exists one reason and one reason only that Plaintiffs seek to open different marijuana industry locations under the same license – they want to make money.”

A hearing set for this week was canceled due to the agreement.