Notice of Proposed Rulemaking

MAR Notice No. 2026-129.1

Summary

Proposed Amendment of ARM 42.39.121 Regarding Video Monitoring Recording Requirements

No Hearing Scheduled

If the agency receives requests for a public hearing on the proposed rulemaking from either 10 percent or 25, whichever is less, of the persons directly affected by the proposed rulemaking; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date.  Notice of the hearing will be published in the Montana Administrative Register.

The estimated number of persons directly affected by the proposed rulemaking is 354 based on the total number of affected licensees active in Montana.  The number of hearing requests necessary for the department to conduct a public hearing shall be 25, which is less than ten percent of the number of persons affected.

Hearing Requests

If the persons directly affected by the proposed rulemaking wish to express their data, views, or arguments orally or in writing at a public hearing, they must make written request for a hearing and submit this request to the department using the contact information below.  Hearing requests must be received by Monday, August 24, 2026, at 5:00 p.m.

Comments

Comments may be submitted using the contact information below.  Comments must be received by Monday, August 24, 2026, at 5:00 p.m.

Accommodations

The agency will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. Requests must be made by Friday, July 31, 2026, at 5:00 p.m.

Contact

Todd Olson, Rule Reviewer - Department of Revenue, Legal Services Office

(406) 444-7905

todd.olson@mt.gov

Rulemaking Actions

Amend

The rule proposed to be amended is as follows, stricken matter interlined, new matter underlined:

42.39.121 Licensed Premises – Security Requirements

1. All licensees must have a written, proactive security plan maintained on the licensed premises that safeguards against theft, diversion, or tampering of marijuana or marijuana products both on the licensed premises and during transit, if applicable.  The security plan must, at a minimum, contain the following policies or procedures of how a licensee:  
   1. restricts access to the areas of the licensed premises containing marijuana or marijuana products to authorized persons only;
   2. provides for identification of authorized persons to be in the areas of the marijuana business that contain marijuana or marijuana products; and
   3. provides electronic monitoring of the licensed premises.
2. A licensed premises must have only one single secure entrance to the building or licensed premises for public ingress and egress. 
3. A licensed premises must have a security alarm system on all perimeter entry points and perimeter windows, as applicable.
4. A licensed premises must have a video monitoring system with cameras that:
   1. have a minimum digital resolution of 640 x 470 pixels or pixel equivalent for analog;
   2. record continuously twenty-four hours per day, or on a motion-sensor system, at a minimum of ten frames per second;
   3. are placed to allow for optimal identification of any person and activities in limited access areas; and
   4. are placed to record all entrances and exits to an indoor facility from both indoor and outdoor vantage points.
5. The video monitoring system described in (4) must also:
   1. keep all recordings for a minimum of 60 days; deleted: and, end deleted 
   2. record images with clear and accurate date and time displayinserted: ; and, end inserted
   3. inserted: 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, end inserted.
6. All monitoring system videos are subject to inspection by the department and must be copied and provided to the department upon request.
7. deleted: Sections (3) through (6) will not be required until April 1, 2022., end deleted 

Authorizing statute(s): 16-12-112, MCA

Implementing statute(s): 16-12-101, 16-12-112, 16-12-202, 16-12-207, 16-12-222, MCA

Reasonable Necessity Statement

The department proposes to amend ARM 42.39.121 with new (5)(c) which is necessary to specify the video recording formats of marijuana business video monitoring systems acceptable to the department under 16 12 207(10)(b), MCA.

Section 16-12-207(10), MCA, provides that a marijuana business must install a video monitoring system and (10)(b) includes that the monitoring systems must be “capable of being recorded as prescribed by the department.”  Specifying acceptable recording file formats in rule is an exercise of this legislatively delegated authority to the department, because the method and format of recording are inherent components of prescribing how a video monitoring system is “capable of being recorded” for regulatory and enforcement purposes.

The department has repeatedly received “unviewable” video monitoring recordings or recordings in uncommon formats that require conversion software or vendor-specific video players to view.  When the department cannot directly access or review monitoring system recordings due to incompatible formats, inspectors and enforcement staff face delays, additional and unnecessary coordination with technical services (IT) staff, and potential gaps in the timely investigation of possible violations or public safety incidents.

To resolve these issues, the proposed amendment requires that a video monitoring system be capable of providing the department with a video recording from a defined list of common and widely supported formats that have been tested and confirmed to function on standard department hardware and software - including specific Windows Media, AVI, MPEG, and MP4 file extensions.  This list is drawn from, and remains consistent with, the formats supported by Windows Media Player, which is currently available and supported in the state IT environment, ensuring that enforcement personnel can open and review a recording without additional software or file conversion steps.  Formalizing these recording formats in rule promotes uniformity among licensees, reduces the department’s reliance on ad hoc conversions, and mitigates cybersecurity concerns associated with plugging a licensee’s external devices into state computers.

The amendment further supports the Legislature’s directive that marijuana businesses implement “strict security measures to deter and prevent the theft of marijuana and unauthorized entrance in accordance with department rule,” by ensuring that the required monitoring systems produce usable, reviewable records that can be promptly accessed by the department for compliance checks and investigations.

In addition to the proposed (5)(c), the department also proposes to remove (7) because the requirement was prospective in nature when adopted in 2022 but has become irrelevant with the passage of time.

Small Business Impact

With regard to the small business impact analysis requirements of 2-4-111, MCA, as amended by HB 592 (2025), the department has analyzed the proposed rule amendments and the group or class of businesses directly affected by this rulemaking, and concludes those impacted small businesses are the testing laboratories, cultivators, dispensaries, or manufacturers of marijuana and marijuana products if they meet the definition of a small business under 2-4-102(13), MCA.  As of April 1, 2026, there are 211 cultivators, 143 manufacturers, and two testing laboratory licensees active within Montana.

The department acknowledges that small businesses may be directly impacted from the proposed rulemaking if a licensee’s video monitoring system must be upgraded or replaced because it does not meet the recording file requirements under the rule.  But the department cannot estimate those costs because they would vary on a case-by-case basis, and those costs are secondary to the public policy goals articulated by the Legislature under 16-12-207(10), MCA.  The department also contends that a majority of video monitoring systems are software/cloud based and the costs associated with system upgrades or replacements can be mitigated compared against earlier video monitoring system configurations.

Documentation of the small business impact analysis is available upon request.

Bill Sponsor Notification

The bill sponsor contact requirements do not apply.

Interested Persons

The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding particular subject matter or matters.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  A written request may be mailed or delivered to the contact person in this notice or may be made by completing a request form at any rules hearing held by the Department of Revenue.

Rule Reviewer

Todd Olson

Approval

Brendan Beatty, Director of Revenue