A Montana judge has ordered state cannabis regulators to delay the enforcement of steep new fees for marijuana dispensary business licenses while a suit challenging the new fee structure is heard by the courts. The 60-day preliminary injunction was ordered by Lewis and Clark County District Court Judge Mike Menahan, with the move agreed to by attorneys for the state and three cannabis businesses that filed the legal action in August.

The plaintiffs in the case are challenging new fees established by the Montana Department of Revenue’s Cannabis Control Division under a law passed by the state legislature earlier this year. Under the new fee schedule, business owners are required to pay a fee of $5,000 for the first dispensary, with the fee increasing by $5,000 for each additional dispensary license.

“This means a license’s initial dispensary fee is $5,000, its second dispensary renewal fee is $10,000, its third is $15,000, and so on,” Angela LeDuc, an attorney for the plaintiffs, wrote in court documents filed last month, as reported by the Independent Record.

The owners of the businesses that brought the suit—Granite Peak Holdings, Inc. doing business as Elevated; TSB Montana LLC, and MariMint LLC—say that if the new licensing fees were to go into effect, they would be forced to close several dispensary locations. Such a move would result in layoffs for the employees who work at the shuttered weed dispensaries and a lack of access to medical marijuana for patients, the plaintiffs argued. Elevated noted in court documents the license fees for 10 of its dispensaries would increase by 680%, from $50,000 to $280,000.

“Enforcement would require Plaintiffs to cease many of their business operations through the state; it jeopardizes their licensure with the state and would result in the loss of their interest in those licenses; it would cause the loss of hundreds of jobs and expose Plaintiffs to liability based on their inability to continue to honor their leasehold interest in those dispensaries and it would jeopardize the medical marijuana patrons that they serve,” attorneys for the plaintiffs wrote in their amended complaint, according to a report from the Daily Montanan.

State Attorneys Defend New Fees

Attorneys for the Montana Department of Justice and the lawyers for the plaintiffs have spent months arguing if the new fee structure is legal. Under state law, the Montana Department of Revenue is prohibited from collecting fees beyond the costs of regulating the cannabis industry. Attorneys for the plaintiffs say that the new fees are far more than the revenue department’s costs to regulate the marijuana program.

Attorneys for the state countered that because Montana is the fourth-largest state in the union by land mass, regulators need more funding to adequately regulate the state’s marijuana industry.

“All of this takes time and resources for which the taxpayers of Montana should not be on the hook,” the state argued in a brief opposing a preliminary injunction.

The state’s attorneys also argued that the plaintiffs’ claims of injury by the new fees should not be upheld by the court because the business owners can avoid the charges by simply operating only one dispensary. The argument also suggested that the legal action was filed purely over money.

“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,” the state argued in an October 24 court filing. “Logic dictates that if a fee of $5,000.00 for a new location is going to make or break that location, then it is not a profitable location and should not be opened in the first place. Plaintiffs just want to make more money at the expense of the taxpayers.”

The plaintiffs are also challenging the new fees on procedural grounds, arguing that they were added to the bill without an opportunity for public comment after the legislation had been approved in committee. Other legal issues in the case revolve around separate legislation that changes the conditions for preliminary injunctions like the one issued by Menahan.

Last week, attorneys for both sides agreed to a 60-day preliminary injunction to pause enforcement of the fees while the lawsuit is litigated. Under the agreement, the new license fees will be put on hold for all licensees, not just the dispensaries owned by the plaintiffs.

Menahan’s order allows him to extend the injunction beyond its current 60 days if both sides agree to an extension. The order also reinstates the fee structure in place before the new hikes and directs the Department of Revenue to return any of the new fees already collected. 

Attorneys for both sides in the case told the judge they are negotiating and hope to reach a settlement in the next 60 days.

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For immediate release. Vancouver, British Columbia, February 13, 2023: Cannabix Technologies Inc.(CSE: BLO, OTC PINK CURRENT: BLOZF) (the “Company”)  developer of breath testing devices for law enforcement and the workplace reports that Friedel, LLC (“Friedel Clinic”) based in Montana will commence piloting Cannabix’s  Contactless Alcohol Breathalyzer (“CAB”). In the fall of 2022, the Company developed its CAB technology for workplaces and vehicles that consist of wall-mounted and in-vehicle versions.  The Friedel Clinic has a robust drug testing operation and is one of the top drug testing providers to employers within the state of Montana. The high-volume clinic has a diverse range of patients and focuses on private sector testing for alcohol and illicit drugs.  The Friedel Clinic has extensive experience piloting with new alcohol and drug testing technologies. Video of the CAB device can be viewed

at https://cannabixtechnologies.com/technology/contactless-alcohol-breathalyzer/

Montana Senator Chris Friedel stated, “The Friedel Clinic has been a pioneer in alcohol, drug and brain health testing in the state of Montana. We have tremendous amount of experience with a range of new testing and monitoring equipment. In addition, we are excited to see how the Cannabix Contactless Alcohol Breathalyzer devices can enhance safety in both workplace and in-vehicle settings – in particular the potential to disrupt legacy alcohol interlock methods which have seen little innovation over the last 40 years.”

The wall mounted CAB would be targeted for employers needing to deploy a pre-access test for alcohol consumption before and during work hours in a fast and cost-effective way. The CAB technology allows for a user to direct a single breath sample towards a small orifice integrated into a wall mounted unit (for indoor use) and behind the steering wheel for in-cabin vehicle use – in a completely contactless manner. The CAB is fundamentally different than existing alcohol breathalyzers and interlock systems that require users to use a mouthpiece or straw and directly blow into a handheld device that is connected to the vehicle usually with a cable. The Cannabix CAB could be integrated into various locations in the vehicle cabin. The CAB provides a warning, pass or fail result along with a Blood Alcohol Content (BAC) level on the screen for the driver to see. This kind of technology holds potential to be integrated with interlock systems and be used in various settings including automotive, heavy-duty equipment, heavy transport vehicles, watercraft and motorbikes. Furthermore, the device could be used in bars, restaurants and hotels for both patrons and employees.

Vehicle Alcohol Breath Screening

The Company has developed its CAB technology in response to interest in new vehicle alcohol detection technologies.  In September 2022, the National Transportation Safety Board (NTSB) issued a recommendation that all new vehicles be equipped with technology that would prevent a person impaired by alcohol from driving (1).  In November 2021, the U.S. House of Representatives, passed the Infrastructure Investment and Jobs Act (IIJA) which called for new cars to come equipped with technology that will detect alcohol in breath. The legislation directed the National Highway Traffic Safety Administration to set new safety standards within three years for impaired driving safety equipment on all new vehicles (2) (3).

Manufacturers such as Volvo have experimented with offering alcohol-detection systems as optional equipment.

(1)   https://www.ntsb.gov/news/press-releases/Pages/NR20220920.aspx

(2)   https://www.iihs.org/news/detail/alcohol-detection-systems-could-prevent-more-than-a-fourth-of-u-s-road-fatalities

(3)  https://www.madd.org/press-release/auto-technology-that-stops-drunk-driving-now-required-by-law

Readers are advised that, although the Company has achieved proof of concept prototype for the CAB, the testing method and device is still in the preapproval stage and accordingly the Company is not currently making any express or implied claims that the technology will proceed to commercial use.

About Cannabix Technologies Inc.

Cannabix Technologies Inc. is a developer of marijuana breathalyzer technologies for law enforcement and the workplace. Cannabix is working to develop drug-screening devices that will detect THC- the psychoactive component of marijuana that causes impairment using breath samples. Breath testing for THC would allow employers and law enforcement to identify recent marijuana use that better aligns with impairment.

We seek Safe Harbor.

On behalf of the Board of Directors

“Rav Mlait”

CEO
Cannabix Technologies Inc.

For further information, contact us by visiting https://cannabixtechnologies.com/contact/contact-us/ 

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking information that involves various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of the Company, such as final development of a commercial or prototype product(s), successful trial or pilot of company technologies, no assurance that commercial sales of any kind actually materialize; no assurance the Company will have sufficient funds to complete product development. There are numerous risks and uncertainties that could cause actual results and the Company’s plans and objectives to differ materially from those expressed in the forward-looking information, including: (i) adverse market conditions; (ii) risks regarding protection of proprietary technology; (iii) the ability of the Company to complete financings; (iv) the ability of the Company to develop and market its future product; and (v) risks regarding government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition and other factors which may be identified from time to time in the Company’s public announcements and filings. There is no assurance that its development of marijuana breathalyzer technology will provide any benefit to the Company, and no assurance that any proposed new products will be built, will be successful in beta testing or clinical trials. There is no assurance that existing “patent pending” technologies licensed by the Company will receive patent status by regulatory authorities.  The Company is not currently selling commercial breathalyzers. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.

Neither CSE nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release.

Contact
For additional information on Cannabix Technologies Inc. please visit our website at https://cannabixtechnologies.com/contact/contact-us/ 

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Montanans purchased more than $300 million worth of marijuana in the first year of recreational sales. Lawmakers recently heard that and other updates from state regulators.

Montana’s marijuana industry includes 432 dispensaries, employs more than 4,000 people and contributes millions of dollars of tax revenue

“Right now there’s $35,460,147 in taxes that have been collected, that is for the first three quarters of this year.”

That’s Kristan Barbour, an administrator of the Montana Cannabis Control Division speaking to the House Business and Labor Committee during the first week of the session.

Barbour informed lawmakers of some of the major concerns for the industry and regulators, including lack of access to traditional banking services that forces businesses to operate in all-cash. Federal legislation sponsored by Montana U.S. Sen. Steve Daines to allow traditional banking for cannabis businesses stalled out in December. Daines’ office says it will continue to work to pass the legislation.

Montana raked in more than $200 million in its first year of recreational cannabis sales, the state reported this week.

The Montana Department of Revenue released figures detailing how much money was generated in both medical and recreational marijuana sales in 2022.

Last year marked the launch of the state’s recreational marijuana market. Voters there legalized medical cannabis in 2004. 

The Department of Revenue said that adult-use marijuana sales totaled $202,947,328 in 2022, while medical cannabis sales amounted to $93,616,551.

The two combined to generate a grand total of $303,563,879 in marijuana sales last year. 

Montana generated $41,989,466 in tax revenue off recreational pot sales, according to the Department of Revenue, and $3,744,662 in taxes from medical cannabis sales. Combined, the state pulled in $45,734,128 in tax revenue from marijuana sales in 2022. 

The state levies a 20% take on recreational pot sales, and a 4% tax on medical marijuana.

The Department of Revenue said all figures were estimates. 

Voters in Montana approved a ballot measure in 2020 to legalize recreational cannabis, one of four states that year where voters passed legalization proposals. The law took effect in 2021.

 “Since January, we’ve been focused on implementing the will of Montana voters in a safe, responsible, and appropriately regulated manner. House Bill 701 accomplishes this,” Gov. Greg Gianforte said in May of 2021, as quoted by local news station KTVH. “From the start, I’ve been clear that we need to bring more resources … to combat the drug epidemic that’s devastating our communities.”

Chief among Gianforte’s concerns with the new law was the creation of the HEART Fund, which subsidizes substance abuse treatment in Montana with revenue from recreational marijuana sales. 

“Funding a full continuum of substance abuse prevention and treatment programs for communities, the HEART Fund will offer new support to Montanans who want to get clean, sober, and healthy,” Gianforte said after signing the bill into law in 2021, as quoted by KTVH.

As in other states that have ended the prohibition on pot use for adults, Montana’s new law contains a component to redress harms that have resulted from the War on Drugs. 

The law “authorizes courts to either resentence or expunge marijuana offenses now considered legal or lesser offenses, but does not enact an automatic expungement process,” according to Montana Free Press, but the “the expungement policy has faced criticism as cumbersome and unclear.”

In March of last year, the state Supreme Court issued temporary rules intended to help clarify the expungement application procedure.

The law says that “anyone convicted of an offense that would now be legal in the state can petition to have their conviction removed from their record, get a lesser sentence for it or reclassify it to a lesser offense,” according to the Missoula Current.

The biggest clarification issued by the Montana Supreme Court, the Missoula Current noted, was to inform individuals that “they could submit their expungement request to the court where they were originally sentenced.”

After President Joe Biden issued pardons to everyone with a federal conviction for marijuana possession in October of last year, he encouraged all states to follow his lead. 

A spokesperson for Gianforte told the Montana Free Press at the time that the “governor will continue to evaluate clemencies submitted through the Board of Pardons and Parole on a case-by-case basis, in accordance with [state] statute.”