The Surprising Profitable Relationship Between Weed And Montana

BUTTE, MT - With the upcoming lift on U.S. weed restrictions (moving marijuana as a Schedule I drug to a Schedule III drug), what will happen to Montana's economy?

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Whether you toke up or not, it's no secret that America's relationship with marijuana has been turbulent, with Americans witnessing perceptions going from the "devil's lettuce" to money trees, being that weed is more acceptable than cigarettes, especially among young adults. With that massive swing in perception came a massive swing in our economy, especially here in Montana.

However, experts and marijuana-enthusiasts alike suspect that, with the upcoming lift in marijuana restrictions, an even bigger lift could occur in American economies, including us here in the Treasured State. This leads to many questions: What do the restrictions mean for Montanans? What has the drug done for Montana so far? Where does the money go?

Let's take a look at the relationship between Montana and marijuana.

Montana's Healthy Relationship with Marijuana

Montana's journey with America's second favorite drug began with the legalization of medical marijuana back in 2004, and recreational usage seeing its first sales here in Montana in January 2022. Since then, Montana has experienced a significant economic boost, reaping the benefits of taxable marijuana sales against the backdrop of positive social impact.

In the first year of recreational weed sales, Montanans spent over $300 million on marijuana products, which, with the respective tax rates of 20% for recreational sales and 4% for medical sales, means a huge generated tax revenue boost for the state. In a nut shell, Montana made millions upon millions of dollars from its presumably hungry citizens in just one year of recreational marijuana legalization.

Utilization of Marijuana Tax Revenue

A critical aspect of Montana's success with marijuana tax revenue is effectively using the funds for public benefit. In May of 2023, a bill was passed in the Senate to redistribute $50 million of Montana marijuana tax revenue towards infrastructure and enhancing school resources, but was ultimately vetoed by Governor Gianforte—a controversial move that has left many wondering where the marijuana tax funds funnel.

We do have an idea, however. Earlier this year, NBC reported a cost breakdown of where the Mary J money goes: $6 million goes to the HEART Fund, Montana's very own addiction and recovery initiative, while 20% of the yearly marijuana tax revenue going to Montana Fish, Wildlife, and Parks for "wildlife habitat" (despite Montana FWP facing controversy over loss of paper work and employees fearing retaliation from superiors) and 3% goes to the Department of Military Affairs. The rest of the cash goes to the general state fund.

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Scheduling to Schedule Down: From I to III

As Montana continues to experience the benefits of marijuana legalization, the state is preparing to further relax restrictions on the marijuana industry. These changes are expected to have a profound impact on the state's economy.

Biden has announced the U.S. government's plans to relax weed restrictions and bring weed's current status as a Schedule I drug (same category as LSD, mushrooms, etc.) down to Schedule III (ketamine, testosterone, Tylenol with codeine, etc.). This means state's like Montana will not only be able to lessen their own restrictions on dispensaries (such as hours, employed staff), but the state may see a decrease in arrests, as being caught with marijuana will not be as severe—federally-speaking.

The Market's Potential...

With relaxation of restrictions comes relaxation of ownership burden, as the federal laws that govern the nation's pot shops allow a flurry of potential: more dispensaries are able to open their doors while reducing their licensing fees. Also, the types of marijuana products are able to expand as the competition between businesses in a market like Montana intensifies, leading to cheaper prices and better products for consumers. More marijuana entrepreneurs and investors are expected to be enticed to join the frenzy, especially here in Montana where the market booms and the views are unmatched.

...and Job Creation

Since the passage of recreational marijuana laws, the job market across the U.S. has seen a remarkable increase in certain sectors, such as agriculture and retail. A study looking into the relationship between weed legalization and employment found that weed legalization saw a relational increase in employment with agricultural jobs, going against the suspected notion that "weed will make people lazy and not work."

It is suspected that jobs will continue to be filled and more employment opportunities will present themselves as more and more dispensaries and farms open up in Montana and across the United States.

Tourism and Hospitality: Good or Bad?

The influx of tourism and transplants Montana has seen in recent years has been a hot topic—if not the hottest topic—here in the treasured state, especially given the reputation Montana received with its legalization of recreational marijuana back in 2021-2022. Whether you appreciate the state's population increase or not, its undeniable that it will continue to skyrocket, given the potential for new marijuana-infused businesses here in the state. Think Amsterdam, but across an entire state (or, eventually, nation).

The Challenges That Come with It

While the relaxation of restrictions presents numerous opportunities, it also comes with potential challenges. Increased accessibility to marijuana may require enhanced regulatory oversight to ensure public safety and prevent illegal activities. Additionally, the state will need to continue investing in public health and education initiatives to address any potential adverse effects associated with greater marijuana use.

As long as weed has been around, you can be assured that the debates of its addictiveness, effects on humans, and health have been right there along with it. Marijuana addiction, traditionally, has been disregarded as urban legend, although as humans understand it more and more, some have started to recognize signs of addiction. Though we've learned a lot from alcohol and tobacco dependencies, marijuana addiction—especially with federal relaxation—can become a serious issue in the future. The state is already funneling funds into addiction clinics and agencies, which may increase as marijuana becomes more popular. Furthermore, the real toll marijuana has socially and physically is still poorly understood.

Research Allowance

States like Montana have already begun studying the affects marijuana use has on humans. However, with the new acceptance of marijuana socially and its federal relaxation from Schedule I to Schedule III, marijuana research could exponentially increase, especially since Montana has acclaimed centers of research within its educational institutions. Weed research has already proven to be a highly sought-after field, so it is expected to only go higher and higher.

The Bottom Line

As Montana continues to navigate the evolving landscape of marijuana legalization, the anticipated reclassification of marijuana from a Schedule I to a Schedule III drug promises profound economic implications for the state. The transition could lead to expanded business opportunities, increased job creation, and enhanced tax revenues, potentially transforming Montana's economic landscape from good to better. However, these benefits come with implications involving regulatory oversight and a robust public health strategy to address potential challenges, including addiction and public safety concerns.

What do you think of the feds lifting weed restrictions? Are you concerned or excited?