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 The majority of the laws for this industry is found in HB 701.  The language resembles the laws and rules of the liquor industry, which makes sense since the Department of Revenue regulates the liquor industry. We would like to point out some of the similarities used in the new law that we see in other laws. 

• Contacted Services. I-90 allows some contract manufacturing (well at least that is what we call it in the brewery/winery/distillery world). A Licensee can contract with another Licensee to process its product or to make concentrates for the first Licensee. Department of Revenue does not have its regulations yet, but we are fairly confident that the rules regulating this process will be very similar to the contract manufacturing allowed in the alcohol industry. We believe that we did the first contract manufacturing agreement between brewers in Montana, as the Department of Revenue did not even have forms for this setup, and thus we can help marijuana licensees get through this process also. 
• Personal liability for the tax on marijuana sales. Generally we can limit the personal liability by use of a properly formed entity. However, there are exceptions, and the Department of Revenue has made an exception in the law. The new law makes the tax imposed for the sale of marijuana a personal debt of the person required to file a return, this includes officers of corporations each partner of a partnership, each member of an LLC, and each manager of an certain LLCs. This is not a new concept, currently we often see this personal liability if a responsible party does not pay the employment taxes withheld to the IRS. This is just another example of the current marijuana laws using concepts that our firm deals with all the time. 

 With our extensive experience with Department of Revenue and previous profession as an auditor, we can predict what the Department of Revenue is going to require for a license application. As such, your 2020 tax return is going to be paramount in a license application going smoothly.  

• Department of Revenue’s timeline. The Department of Revenue has been regulating liquor in Montana for many years, yet the current speed for application processing has greatly decreased. This is mostly caused from a lot of new employees at the Department of Revenue. What this means for marijuana is that the licensing application process is going to be slow and it will be really slow for applications that do not have all of the required information. We know how to work with the Department of Revenue and when to push back on the Department of Revenue to get our clients licensed and making money as quickly as possible. 
• Continued compliance. Just because a business gets licensed under the Department of Revenue does not guarantee that the business is going to be able to continue to be a licensee. A business will have to be setup and continue to follow the laws and regulations to keep its license. We have helped many clients fight violations from the Department of Revenue, but we prefer to keep clients out of trouble than to have to go through the costs of dealing with violations. 
• Professionals. It is our belief that businesses that utilize proper professionals will thrive. As this is a very regulated industry, the business is not going to get an lenience for not following the laws and regulations. Businesses who are not up to speed will risk violations and possible revocation of the license for violations. 
• CPA or experienced tax professionals are key to businesses in this industry. As this industry is federally illegal, the taxes are much greater as the businesses are not allowed to take ordinary and necessary expenses as deductions. Thus, having an CPA who is knowledgeable about cost of goods sold will put any business in this industry at a major advantage.