Montana cannabis taxes and where the money goes

The rates

Two statutes set what you pay at a Montana register.

State law imposes a 20 percent tax on the retail price of marijuana, marijuana products, and live marijuana plants sold at an adult-use dispensary. It imposes a 4 percent tax on the same items sold to a registered cardholder at a medical dispensary. Both taxes get collected at the point of sale.

Counties may add a local-option marijuana excise tax on top, capped by statute at 3 percent of retail value, applied to all marijuana and marijuana products sold at either type of dispensary within the county. A local-option tax requires voter approval, so the rate differs county to county and some counties have none.

Cascade County voters approved a 3 percent local-option tax on both medical and adult-use sales in November 2022, and the Department of Revenue's county sales reports list it.

What that means on a receipt in Great Falls

Adult-use: 20 percent state plus 3 percent county, applied to the retail price. On a 50 dollar pre-tax basket, that lands at roughly 11.50 dollars in tax.

Cardholder: 4 percent state plus 3 percent county. On the same 50 dollar basket, roughly 3.50 dollars.

Montana has no general statewide sales tax, so the cannabis excise tax is the whole tax line. Shelf prices at Montana dispensaries are typically listed before tax, which is why the total at the register runs higher than the tags suggested.

Where the local 3 percent goes

Statute splits the local-option revenue three ways. Fifty percent stays with the county. Forty-five percent goes to the municipalities inside the county, apportioned by each city or town's share of the county population. The remaining 5 percent stays with the Department of Revenue to cover the cost of administering the tax.

Counties and municipalities may spend their share on any activity they are authorized by law to perform, including costs created by the licensing and regulatory work the tax generates. In practice that means the local portion of what you pay in Great Falls funds county and city budgets rather than a dedicated cannabis program.

Where the state 20 percent and 4 percent go

State cannabis tax revenue lands in the marijuana state special revenue account. The Department of Revenue draws its administration costs from that account first and holds an operating reserve.

What is left gets distributed at the end of the fiscal year in a defined order. Eleven percent goes to the HEART account, which funds substance use prevention and treatment. From the balance after that:

• 20 percent to the Habitat Legacy Account, administered by Fish, Wildlife and Parks.
• 4 percent to the state park account.
• 4 percent to the trails and recreational facilities account.
• 4 percent to the nongame wildlife account.
• 3 percent or 200,000 dollars, whichever is less, to the veterans and surviving spouses state special revenue account.
• 150,000 dollars to the Board of Crime Control for crisis intervention team training.
• The remainder to the general fund.

The 2025 legislature rewrote this allocation, creating the Habitat Legacy Account and routing conservation money through it. Allocation is the part of Montana cannabis tax law that changes most often, and it has been rewritten in multiple sessions since sales began.

Why the tax is not on the shelf tag

Montana dispensaries generally price products pre-tax and add the excise at the register. A 40 dollar eighth in Great Falls comes to about 49.20 dollars at the adult-use rate. Budgeting against shelf prices without adding roughly a quarter on top is the usual reason a basket surprises someone at checkout.

Loyalty discounts, sales, and bundles apply before tax, so the excise calculates on the discounted retail price rather than the original.

At the counter

If you hold a medical card, present it before the sale rings up. The rate applies based on what the store records at the time of the transaction, and fixing it afterward means voiding and rebuilding the sale.

If you want to know the exact tax on a specific basket, ask for a pre-tax subtotal. Any Montana dispensary can produce one, and it beats estimating.

Rates and allocations change by legislative session. Before relying on any figure here, check the Department of Revenue's cannabis pages and the statute text, both linked below.