Is the Revenue Department ready for Montana's weed tax tidal wave? 

This spring, the state Legislature passed a 4-percent sales tax on medical marijuana. The same deliberative body that could not bring itself to issue bonds for schools and rural water systems had no problem taxing medicine, probably because we all know medical marijuana is actually for fun. For every chemo patient, 10 people develop chronic pain right before the Sublime tribute show. Ask any doctor, and she'll tell you that the system is rife with abuse. Then go ask your dispensary where to find a cooler doctor.

My point is that we shouldn't get too indignant about those legislators whose principles could not tolerate a tax to pay for schools but had no problem with a pot tax to pay for whatever. That tax is different, because it will be paid by stoners. It will be collected, however, by medical marijuana dispensaries, and therein lies the problem.

Marijuana is a cash business, even when it's legal. Because federal law still prohibits the use or sale of marijuana under any circumstances, banks that operate across state lines don't want to service pot shops. Your local dispensary probably can't get a business account with Wells Fargo or even Missoula Federal Credit Union. As a result, many of them have to operate on cash—and that means paying the state marijuana sales tax in cash, too.

This creates a security problem. The legal marijuana industry is already a security nightmare, since growers and dispensaries deal in large amounts of a substance that is extremely valuable and protected only reluctantly by law enforcement. Obliged to make regular sales tax payments but unable to simply write checks or wire the money, providers now have to figure out how to safely transport thousands of dollars in cash to Helena.

Fans of Montana's Wild West heritage will be pleased to hear that you can once again make a decent living robbing overland stage coaches. Now is a good time to invest in armored car companies, if you can find one that doesn't operate across state lines. But the problem of how to get a quarterly cash payment from Billings to Helena pales in comparison with the question of what Helena will do with the cash once it arrives.

The short answer is they haven't thought about it. Speaking to the Billings Gazette, Gene Walborn, deputy director of the Montana Department of Revenue, said, "We may have to do some changes to our physical buildings to be able to accept cash and maybe have some cash counters and that kind of thing."

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It probably would be a good idea to get some cash counters—maybe even before October, when the first payments come due. Some kind of storage room for money might help, too. You'll want to put a lock on that, so Walborn should send someone to the hardware store for a Kwikset. While they're at it, the Department of Revenue should probably think up some system to keep the people processing those giant cash payments from peeling off a few hundreds for themselves, plus hire people to oversee this system, as well as come up with a protocol to audit it and make sure it's working.

Basically, the revenue department needs to implement the same kind of elaborate fraud-and-theft protections used by banks, casinos and other entities that handle large quantities of cash. Or—and I'm just spitballing—they could do nothing and see what happens.

The state seems to have selected option two. According to the Gazette, Walborn said he expects collecting the new tax will be "almost routine." The Department of Revenue has estimated it will bring in about $750,000—a number based on the 11,877 registered cardholders in Montana in 2016. Of course, that number predates November's ballot initiative, which made it much easier to buy and sell medical marijuana. As of May, the number of cardholders had already increased to 15,564.

That 31 percent increase over six months—a period in which the state's legal cannabis industry was just getting started again, and both dispensaries and prescribing doctors were hard to find—suggests the Department of Revenue may bring in a lot more cash than it expects. So does the boom that took place after Montana first legalized medicinal marijuana in 2004, when the number of cardholders peaked at around 30,000. It seems probable that the state will wind up with a lot more money in October than it expects, much of it in cash.

That's a good problem to have, but I would feel better knowing someone had planned for it. From Revenue to the Legislature, no one seems to have foreseen these very foreseeable complications. Their assumption seems to be that dealing with our new medical marijuana laws will be the same as dealing with the the old laws, which were different. In this way, at least, Helena's marijuana policy has remained consistent. They're going to just keep doing whatever, and see what happens.

Dan Brooks writes about people, politics, culture and the relationship between jam bands and chronic pain at combatblog.net.

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