Notable Players
No MSOs currently

A Deeper Look At This State

Regulatory Framework

Cannabis sales in Montana reached $72.9 million in the first quarter of 2022, according to state Department of Revenue figures outlined by the Associated Press. The total includes both medical and adult-use cannabis sales, but adult-use sales represent the bulk of the total at more than $43.5 million.

Thanks to a tremendous number of out-of-state customers, the state has blown past predictions. In fact, the Montana budget office had predicted $130 million in cannabis sales this year, but the state is on track to reach $174 million in sales and may see as much as $200 million.

Montana imposes a 20% tax on adult-use sales and a 4% tax on medical cannabis sales, so the state could see more than $50 million annually from cannabis-derived revenues. The figures released by the state revenue department show Montana is nearing the $10 million mark in tax revenue from recreational and medical marijuana sales. The legislature’s final framework allocated the first $6 million toward the HEART fund proposed by Gov. Greg Gianforte, a new substance use disorder treatment and addiction recovery program.

HB 701, the main bill that established the current legal framework for adult-use, established a tiered canopy system. Adult-use growers with a Tier 1 license can have up to 1,000 square feet of canopy, Tier 2 licenses allow up to 2,500 square feet, Tier 3 allows up to 5,000 square feet and so on.

HB 701 says an adult-use grower can only increase their license one tier at a time, and only if they show they are using the full amount of canopy they already have and are selling the marijuana they’re already producing. However, it provided an exemption through June 30, 2023, so small existing producers can increase up to Tier 5 in one step without meeting those other requirements.

The Department of Revenue says, because of how that exemption is worded, adult-use producers are still only allowed to increase their license tier once per year, when they submit their regular license renewal. However, industry advocates said that interpretation wouldn’t give them enough ability to grow their operations over the next year and a half. Producers argue it goes against the intent of HB 701, which was to let existing marijuana providers scale up so they could compete with the new companies that will enter the market on July 1, 2023.

Notable Market Activity

March 2022 | Bloom Montana announced an investment from Altmore Capital for $11MM

What's the Play?

Although Montana is the 43rd least populous state, it enjoys a three percent patient population, which is amongst the highest in the nation.

The broad license structure creates an environment that benefits consumers and challenges operators. The highest value is likely to be created by dispensaries with strategic locations and their own supply chain.

Retailers able to reach adventure seekers flocking to Big Sky and Yellowstone stand the best chance of success in this small market.

Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~1.1MM

21+ Population

~0.6MM

Annual Tourists

~
13
MM

Medicinal Legalization

2004

Adult-Use Legalization

2020

First Adult-Use Sales

2022

MMJ Patients

~42K

Monthly Revenue

~$22.6MM

Cultivation Cap

120K Sq.Ft.*

Cultivation Licenses

429/No Limit (Operational/Limit)

Retail Licenses

378/No Limit (Operational/Limit)

Retail License Cap per Operator

No Limit

Vertical Integration

Allowed

Delivery

Not Allowed

MMJ Qualifications

Less Restrictive

Adult Population/ # Retail Licenses

~1.5K

Accepts Out of State MMJ

No

MMJ Patients / # Retail Licenses

* A Tier 1 canopy license allows for a canopy of up to 1K sq.ft. at one registered premises. A minimum of 500 sq.ft. must be equipped for cultivation. A Tier 2 canopy license allows for a canopy of up to 2,500 sq.ft. at up to two registered premises. A minimum of 1,100 sq.ft. must be equipped for cultivation. A Tier 3 canopy license allows for a canopy of up to 5,000 sq.ft. at up to three registered premises. A minimum of 2,600 sq.ft. must be equipped for cultivation. A Tier 4 canopy license allows for a canopy of up to 7,500 sq.ft. at up to four registered premises. A minimum of 5,100 sq.ft. must be equipped for cultivation. A Tier 5 canopy license allows for a canopy of up to 10,000 sq.ft. at up to five registered premises. A minimum of 7,750 sq.ft. must be equipped for cultivation. A Tier 6 canopy license allows for a canopy of up to 13,000 sq.ft. at up to five registered premises. A minimum of 10,250 sq.ft. must be equipped for cultivation. A Tier 7 canopy license allows for a canopy of up to 15,000 sq.ft. at up to five registered premises. A minimum of 13,250 sq.ft. must be equipped for cultivation. A Tier 8 canopy license allows for a canopy of up to 17,500 sq.ft. at up to five registered premises. A minimum of 15,250 sq.ft. must be equipped for cultivation. A Tier 9 canopy license allows for a canopy of up to 20,000 sq.ft. at up to six registered premises. A minimum of 17,775 sq.ft. must be equipped for cultivation.

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data

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