Three cannabis licensees in Montana, joined by the state, have reached a joint agreement for a 60-day preliminary injunction against a controversial state law. This law, enacted at the close of the 2023 legislative session, significantly increased licensing fees for businesses operating multiple dispensaries. The agreement offers both parties time to negotiate a settlement in a lawsuit filed by cannabis business owners challenging the fee hike.
Under the newly implemented law, dispensary owners faced a tiered fee structure – $5,000 for the first dispensary, $10,000 for the second, and an additional $5,000 for each subsequent dispensary. This marked a departure from the previous flat $5,000 fee per additional dispensary under the former state law.
Granite Peak Holdings, a plaintiff in the lawsuit, revealed that the new fee structure would require them to pay $525,000 in fees for their 14 active dispensaries, a stark increase from the $70,000 they paid under the prior legislation.
The lawsuit contends that if the state isn’t restrained from enforcing the new fee structure, the plaintiffs may be forced to close several dispensary locations, resulting in job losses, harm to the public, and a loss of value in owned and leased locations.
Two other licensees, TSB, operating 15 Top Shelf Botanicals dispensaries, and MariMint, with five dispensaries, echoed similar concerns in the lawsuit. They argued that the heightened fee structure constitutes an unjustifiable “taking” of their property.
The Montana Department of Justice countered, asserting that the state incurs legitimate regulatory costs when licensees expand their operations. The state challenged the notion of a “taking” of property, suggesting that the plaintiffs’ desire to open multiple locations under the same license is primarily driven by financial motives.
A scheduled hearing for this week was canceled in light of the agreement, allowing room for further negotiations between the plaintiffs and the state. The outcome of these discussions could significantly impact the future landscape of cannabis licensing fees in Montana. Stay tuned for updates on this evolving legal battle.