Cannabis October 2026 Newsletter

Adopted: Security Requirement Update

MAR Notice No. 2026-129.2 – Revisions to ARM 42.39.121, Licensed Premises – Security Requirements.

No public hearing requests or public comments were received. Adopted as proposed.

Effective date: September 5, 2026

Summary: The video monitoring system described in ARM 42.39.121(4) must also be capable of providing the department with a video recording in any of the following baseline or legacy video formats: .asf; .avi; .mp; mpeg; .mpg; .m1v; .mp4; .m4v; .wmv; .wm; .3g2; 3gp2; .3gp; or .3gpp.

Adopted: Removal of Residual References to DPHHS

MAR Notice No. 2026-444.2 – Removal of Residual References to DPHHS from Cannabis Rules.

No public hearing requests or public comments were received. Adopted as proposed.

Effective date: September 5, 2026

Summary: Removal of residual references to the Department of Public Health and Human Services State Laboratory from cannabis rules and update of cross references from ARM Title 37 (DPHHS) to Title 42 (Revenue).

Reminder: Cannabis Tax Contact Information

For more information or questions about cannabis taxation, please contact the department’s Miscellaneous Tax Unit.

• Phone: (406) 444-6900
• Email: DORBitBTU@mt.gov

Adopted: Clarify Day-to-Day Operational Control Requirements

MAR Notice No. 2026-155.2 – Clarify Day-to-Day Operational Control Requirements.

Comments were received; a change was made.

Effective date: September 26, 2026

Summary: Amendments to ARM 42.39.102 and 42.39.105 to clarify day-to-day operational control requirements of marijuana businesses.

A licensee must submit to the department, on a form provided by the department, the name of each natural person who has day-to-day operational control over the business, as defined in ARM 42.39.102, and documentation demonstrating that each person is a Montana resident. A licensee must submit this information with an initial application, with each renewal application, and within 30 days of any change in a natural person having day-to-day operational control over the business.

Adopted: Marijuana Licensee Required Disclosure of Third-Party Contractual Relationships

MAR Notice No. 2026-902.2 – Marijuana Licensee Required Disclosure of Third-Party Contractual Relationships.

Comments were received; changes were made.

Effective date: September 26, 2026

Summary: For purposes of this rule, “third-party contractual relationship” means any agreement, written or oral, between a marijuana licensee and a third party for any of the following:

1. management of the marijuana business;
2. consulting services;
3. financing;
4. staffing;
5. revenue distribution;
6. operation of the marijuana business;
7. operating lease for equipment used for marijuana-related activities;
8. any other arrangement in which a third party who is not a licensee directly or indirectly:
   1. performs work for the marijuana business;
   2. receives compensation tied to the marijuana business;
   3. exercises or shares operational authority over the marijuana business;
   4. obtains access to the licensed premises, inventory, books and records, or the seed-to-sale tracking system; or
   5. otherwise acquires actual or potential control of, or a financial interest in, the license or the marijuana business.

ARM 42.39.203, Reconciliation: Clarification Update

We’ve Heard Your Concerns: Upcoming Metrc Updates

The Cannabis & Alcohol Regulation Division (CARD) has heard your concerns about implementing the revised reconciliation requirements in ARM 42.39.203, particularly how the five-pound package requirement affects harvesting, transferring unfinished flower, and trimming operations.

Your feedback has helped identify where Metrc changes can better support these activities while maintaining required tracking and testing. CARD is working with Metrc and testing a solution that will distinguish unfinished flower from finished buds and provide additional processing options.

What’s Coming

A new Unfinished Biomass item category will identify bucked flower that has not yet been processed into finished buds. This category will distinguish unfinished material from finished flower, allowing it to move through appropriate processing and transfer steps before being divided into packages for testing.

New processing jobs at cultivation licenses will allow unfinished biomass to be processed into bud packages of no more than five pounds and separate packages of shake/trim. Corresponding processing attributes will also be available at manufacturing licenses.

Under this planned approach, unfinished biomass will not require testing at that stage or be subject to the five-pound package limit. Finished buds will remain subject to the five-pound package and required testing requirements.

Whole wet material and shake/trim used for manufacturing will continue to fall within the applicable exceptions.

Additional Item Category Updates

The following categories are also planned to improve product tracking:

• Intermediate Infused (weight): Weight-based infused products used in manufacturing; available only at manufacturing licenses.
• Intermediate Infused (volume): Volume-based infused products used in manufacturing; available only at manufacturing licenses.
• Extract-based Infusion Tinctures: A separate category to distinguish extract-based infused tinctures from traditional tinctures.
• Infused Biomass: Material used for products such as infused pre-rolls, moonrocks, cannagars, and Thai sticks.
• Unfinished Biomass: Bucked flower used in the new processing job.

Categories Being Discontinued

All micro categories and the Joint category will be discontinued. If you currently use these categories, review your inventory and identify affected packages so you can repackage them in Metrc under the appropriate replacement categories. CARD will provide transition instructions and timing as the updates are finalized.

During the Transition

These changes are currently being tested in the Metrc test environment. If you are experiencing difficulties involving the movement of unfinished flower to another licensed location for trimming, contact your inspector so CARD can review and document the issue and how the planned updates address it.

Thank you for sharing specific concerns and explaining how these requirements affect your operations. CARD remains committed to listening, providing clear guidance, and addressing implementation issues while carrying out Montana’s regulatory requirements.

Reminder: Public Comment Process

Before we formally adopt any new rule, it must go through a public comment process. Our department has a history of taking industry feedback seriously and changing proposed rules based on comments, concerns, and practical impacts raised during that process.

We strongly encourage licensees and other industry members to keep an eye on proposed rule changes and actively participate in the public comment process.

This provides the cannabis industry an opportunity to raise concerns, provide industry perspective, and help inform rules before they are finalized. Public comments can be heard in person, virtually, or through email.

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