Montana Cannabis Startup Guide

Starting a cannabis company in Montana? We’ve put together a state-specific guide covering everything from available license types to fees, regulations, and what you should include in a Maine cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.

Montana medical and recreational cannabis business startup guide and planning banner

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Overview
Cannabis license types
Fees and other barriers to entry
Are cannabis business plans required in Michigan?
What to include in a business plan
How to research city regulations
Helpful links
Get expert help

Overview of legal cannabis in Montana


Thanks to initiative 182’s passage in 2016, Montana medical cannabis businesses can grow and sell marijuana to patients with a written recommendation from a doctor. Patients can possess up to 1 ounce of usable marijuana, and more than 41,000 patients have registered for medical marijuana use, and medical cannabis sales in 2021 are expected to surpass $125 million. People are allowed to grow marijuana plants at home for medicinal use.

In 2020, voters passed I-90, which would legalize and tax recreational cannabis with 57% approval. Legislative opponents have successfully fought to delay implementation of the program, finally passing a “watered-down” implementation bill in May 2020 (HB 701). Under the law, Montana is only the the second state to include a potency cap on flower (35%). The launch of retail adult-use sales will be January 1, 2022, but only current medical licensees will be allowed to apply for new recreational licenses until 2023. Full rules for the new program are expected in October 2021.

Cannabis business license types


Montana issues licenses for four broad categories of cannabis businesses: providers (cannabis growers/cultivators), manufacturers, dispensaries, and testing labs.

Providers: These businesses, also called cultivators or grow operations, grow cannabis plants indoors or outdoors.

Manufacturers: Manufactures process cannabis flower into concentrates, edibles, etc. To be a manufacturer, a business must also be a provider (cultivator).

Dispensary: This is a retail storefront where patients can purchase marijuana. Dispensaries must follow strict state-mandated protocols for product tracking, security, record-keeping, and hiring. In Montana, dispensaries must also hold a provider license.

Testing facility: Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. In Montana, cannabis testing labs analyze products for CBD and THC content, pesticides, solvents, water levels, and other contaminants. Montana also allows testing labs to transport cannabis samples. Testing labs must be run by a scientific director with a doctorate in chemical or biological science. (See page 19 here for more info.)

Ancillary business: If you don’t want to grow or sell cannabis in Montana, there are plenty of other ways to be part of the booming cannabis industry. You can create a marijuana app, payment processing service, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!

Fees and other barriers to entry


In Montana, local governments can forbid cannabis companies or certain locations, so check city and county regulations.

Application fees: There is no separate application fee .

License fees: It’s $500 for a manufactuer license in Montana but license fees for providers and dispensaries vary depending on the operations’s size. For growing, annual fees can range from $500 to $20,000, while dispensaries range from $500 to $100,000.

Background check: Anyone with an ownership interest in a medical marijuana business must get fingerprinted and undergo a background check.

Tracking: Montana dispensary license-holders must use Metrc, a state-mandated system for tracking marijuana inventory, plants, packages, inventory, transfers, and sales. It seems likely the recreational program will also use Metrc for tracking and compliance.

Do you need a cannabis business plan in Montana?

A business plan is not required to get a medical marijuana business license in Montana, but that could change with the recreational program. Your application already has to include your qualifications and operation plans, some of which naturally overlaps with a business plan. And if you plan on raising funding from investors, you definitely need a business plan.

 

What to include in your business plan


Here’s what a Michigan medical marijuana business plan should include:

  • Product/service description: Will you run a dispensary, grow operation, testing lab, cannabis consulting firm, or something else? What’s unique about your business? Be as specific as you can. If you’ll open a marijuana dispensary, which strains of flower will you sell?

  • Market research: If you’re opening a dispensary, how many people live within five miles? If you’ll wholesale flower or edibles for recreational use, how many dispensaries will you sell to? If you’re creating an app, who will be the user base, and why would they use your app instead of someone else’s? Use concrete numbers verified by a third party whenever possible (instead of estimates).

  • Competitors: Who will you compete with, both directly and indirectly? What do they do well and poorly? What is their online reputation? How will you differentiate your company?

  • Management team: Summarize your qualifications and those of others on your management team. (Think of it as a shorter, “greatest hits” version of your resume.) Include cannabis industry experience, as well as leadership skills, customer service, and business development experience in other industries.

  • Financials: This part can be tricky. You need a five-year financial forecast, including projected annual revenue, operating expenses, costs, and net profit. Each year’s projected revenue should include not only revenue but also your margin and direct costs. You can forecast revenue by estimating how much product you think you’ll sell (based on market potential), your retail price, your production cost, and how much you’ll spend on payroll, rent, and other expenses. Your cash flow statement will show that you’ll have enough cash to stay operational. You might want to include a sensitivity analysis (best- and worst-case scenarios), which shows 15% higher and 15% lower revenue than your initial forecast. For marijuana cultivators, it’s important to do a sensitivity analysis based on future potentialities of the wholesale price per pound. You can also include a break-even analysis, showing which month you will be profitable.
  • Mondtana-specific requirements: If not included elsewhere in your application, you should include details in your business plan about your operations and anything else required by your state.
  • Investor proposal: If you are presenting your plan to investors, how are you valuing the shares? Consult with your attorney to make sure you are within state and federal compliance. Sometimes, you’ll need your attorney to draw up an offering memorandum, often called a private placement memorandum (PPM). A PPM informs potential investors on the details of the investment vehicle (your company) and potential risks associated with the investment.

How to research city regulations

Google your city or municipality name and “cannabis regulations” or “marijuana laws.” Montana uniquely will require a subsequent local election if a county failed to pass I-90 before adult-use will implemented. Those counties include Beaverhead, Broadwater, Carter, Chouteau, Custer, Daniels, Dawson, Fallon, Fergus, Garfield, Golden Valley, Judith Basin, Liberty, McCone, Meagher, Musselshell, Petroleum, Pondera, Powder River, Prarie, Stillwater, Sweet Grass, Teton, Toole, Treasure, Wheatland, and Wilbaux. If your city or municipality’s website doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.

Helpful Links

Get expert help


Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation:

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