Proposal Notice: MAR No. 2026-155.1

Notice Of Proposed Rulemaking

MAR Notice No. 2026-155.1

Summary

Proposed Amendments to ARM 42.39.102 and 42.39.105 to Clarify Day-to-Day Operational Control Requirements of Marijuana Businesses

Hearing Date and Time 

Monday, August 31, 2026, at 11:30 a.m.

Hearing Information

Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana

Comments

Comments may be submitted using the contact information below. Comments must be received by Tuesday, September 8, 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, August 14, 2026, at 5:00 p.m.

Contact

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

(406) 444-7905

todd.olson@mt.gov

General Reasonable Necessity Statement

Section 16-12-203(1)(a)(ii), MCA, requires a marijuana licensee to submit to the department proof that the natural person having day-to-day operational control over the business is a Montana resident.  This person may, but is not required to, be an owner.  Based on this requirement, the lack of a statutory definition for “day-to-day operational control,” and for increased clarity on the issue, the department proposes to amend ARM 42.39.102 with new (12) to define “day-to-day operational control” and ARM 42.39.105 with new (7) as a necessary reiteration of this general licensee requirement which cross-references the new definition.

Rulemaking Actions

Amend

The rules proposed to be amended are as follows, stricken matter interlined, new matter underlined:

42.39.102 Definitions

The following definitions apply to this chapter:

1. "Act" means the Marijuana Regulation and Taxation Act, codified at 16-12-101, MCA, et. seq.
2. "Authorized employee" means:
   1. an employee of the department who has received written authorization from the department director or the director's designee to obtain individual names and other identifying information from the marijuana registry;
   2. an employee of a state or local law enforcement agency who is authorized to obtain marijuana registry information through the Montana Criminal Justice Information Network (CJIN)/marijuana registry interface; or
   3. an employee of a state or local government agency, including a state or local law enforcement agency, who has received authorization to obtain marijuana registry information.
3. "Batch" means:
   1. a quantity of usable marijuana from a harvest lot; or
   2. a quantity of cannabinoid concentrate or extract or cannabinoid product from a process lot.
4. "CBD" means cannabidiol.
5. "CBDA" means cannabidiolic acid.
6. "Certificate of analysis" means the report prepared by a marijuana testing laboratory about the analytical testing performed and the results obtained by the laboratory.
7. "Chemical manufacturing" means the use of chemical compounds such as, but not limited to, hydrocarbon solvents or food grade nonhydrocarbon solvents to separate cannabinoids or marijuana analytes of interest from marijuana.
8. "Child resistant" means packaging designed or constructed to be significantly difficult for children under five years of age to open and not difficult for adults to use properly.  The standard for child-resistant packaging is set by the federal consumer product safety commission (CPSC) and the testing procedures found in 16 CFR 1700.20 (2012).
9. "Compliance audit" means a department review of aspects of a licensee's business without conducting a physical on-site inspection, including but not limited to website compliance checks, review of seed-to-sale tracking system records, permit compliance checks, and local ordinance compliance checks.
10. "Cultivate" means to grow, propagate, clone, or harvest marijuana for use by registered cardholders or consumers.
11. "Customer" means, collectively, adult use consumers and registered cardholders.
12. inserted: “Day-to-day operational control” means the authority or ability of one or more natural persons to direct or materially influence the routine management, operations, or policies of a marijuana business, whether or not the person is an owner.  The term includes, but is not limited to, any natural person who:, end inserted
    1. inserted: has primary responsibility for supervising employees or managing the licensed premises on a daily basis;, end inserted
    2. inserted: has authority to make or direct routine operational decisions regarding production, manufacturing, testing, distribution, or retail sale of marijuana or marijuana products;, end inserted
    3. inserted: has authority to sign contracts, approve expenditures, or control business bank accounts in the regular course of operations; or, end inserted
    4. inserted: holds a position such as general manager, operations manager, store manager, head cultivator, or equivalent role with similar actual authority over daily business activities., end inserted
13. deleted: (12), end deletedinserted: (13), end inserted "Edible marijuana-infused product" or "edible" means an ingestible marijuana-infused product that is intended to be taken by mouth, swallowed, and primarily absorbed through the gastrointestinal tract.  Edible marijuana-infused products may be psychoactive when used as intended.  Without limitation, edible marijuana-infused products may be in the form of a food, beverage, capsule, tablet, or tincture.
14. deleted: (13), end deletedinserted: (14), end inserted "Employee" as defined in 16-12-102, MCA, includes an independent contractor that performs work for any aspect of a marijuana business.
15. deleted: (14), end deletedinserted: (15), end inserted "Existing outdoor cultivation space" means outdoor space used to grow live marijuana plants in an area exposed to natural sunlight and environmental conditions including variable temperature, precipitation, and wind, licensed on or before November 3, 2020.
16. deleted: (15), end deletedinserted: (16), end inserted "Exit package" means a sealed container or package provided at the retail point of sale, in which any marijuana item already within a container is placed.
17. deleted: (16), end deletedinserted: (17), end inserted "Fee" means the mandatory fees required by the department.
18. deleted: (17), end deletedinserted: (18), end inserted "Fingerprint card" means an FD-258 fingerprint card utilized to facilitate a Federal Bureau of Investigation (FBI) fingerprint and background check.
19. deleted: (18), end deletedinserted: (19), end inserted "Food-Grade" means the processing and packaging has been done with clean equipment and can be safely eaten.
20. deleted: (19), end deletedinserted: (20), end inserted "Green county" means a county where the majority of voters voted to approve Initiative Measure No. 190 in the November 3, 2020 general election or where the local government approval provisions of 16-12-301, MCA, have been satisfied.  This definition does not include a municipality that has approved or disapproved a category or categories of marijuana businesses, as authorized in 16-12-301, MCA.
21. deleted: (20), end deletedinserted: (21), end inserted "Ingestible marijuana-infused product" or "ingestible" means a product that contains marijuana and at least one other ingredient, is intended for consumption or use other than by smoking or vaporizing, is intended to be taken into the body, and is either categorized as an edible marijuana-infused product or a transmucosal marijuana-infused product.
22. deleted: (21), end deletedinserted: (22), end inserted "Ingredient" means any substance that is added to marijuana items that changes its final form including but not limited to flavorings, aromatic oils, colorants, food items, spices, sweeteners, and preservatives.
23. deleted: (22), end deletedinserted: (23), end inserted "Label" or "labeling" means the printed analytical information pertaining to the marijuana flower or marijuana product displayed on the packaging in which marijuana or a marijuana product is dispensed or displayed to a customer.
24. deleted: (23), end deletedinserted: (24), end inserted "Licensee" means any person licensed by the department.
25. deleted: (24), end deletedinserted: (25), end inserted "Limited access area" means a building, room, or other contiguous area upon the licensed premises where marijuana is grown, cultivated, stored, weighed, packaged, sold, or processed for sale, under the control of the licensee.
26. deleted: (25), end deletedinserted: (26), end inserted "Major food allergen" or "allergen" means milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat, sesame, soybeans, any additional ingredient identified by the United States Food and Drug Administration, and any ingredient containing a protein derived from these foods.
27. deleted: (26), end deletedinserted: (27), end inserted "Manufacture" means the act of preparing and processing usable marijuana into a marijuana-infused product.  A marijuana-infused product must be labeled as to indicate that it contains marijuana.
28. deleted: (27), end deletedinserted: (28), end inserted "Marijuana" means the same as the definition in 16-12-102, MCA, and includes the biomass of the marijuana plant which contains greater than 0.3% total THC concentration and appreciable concentrations of other cannabinoids of interest including flower, bud, shake, trim, and manicure.
29. deleted: (28), end deletedinserted: (29), end inserted "Marijuana concentrate and extract" or "concentrate and extract" means the same as the definition in 16-12-102, MCA, and includes a substance obtained by separating and/or concentrating naturally occurring chemical constituents of marijuana, such as, but not limited to, cannabinoids, from marijuana plant material by mechanical, physical, chemical, or other processes that may:
    1. contain solvents in allowable amounts and ingredients used to promote a desired physical state, texture, or flavor in the marijuana concentrate, but no other ingredients; or
    2. be intended for use in the production of marijuana-infused products; or
    3. be a finished product intended for consumption or use.
30. deleted: (29), end deletedinserted: (30), end inserted "Marijuana-infused product" means the same as the definition in 16-12-102, MCA, and includes the infusion of cannabinoids of interest using marijuana or marijuana concentrate or extract into existing products, substances, or consumer goods, and as an ingredient in the production of consumer goods that would not naturally or ordinarily contain cannabinoids of interest.
31. deleted: (30), end deletedinserted: (31), end inserted "Marijuana items" means:
    1. marijuana;
    2. usable marijuana;
    3. dried leaves and flowers of the marijuana plant;
    4. marijuana derivatives, concentrates, extracts, resins, infused products, edible products, ointments, tinctures, suppositories, topicals; and
    5. other marijuana-related products.
32. deleted: (31), end deletedinserted: (32), end inserted "Marijuana laws" for the purposes of these rules, means any combination of regulatory authority pursuant to the Montana Marijuana Regulation and Taxation Act (Title 16, chapter 12, MCA), rules of the department, or local ordinances applicable to marijuana businesses.
33. deleted: (32), end deletedinserted: (33), end inserted "Marijuana product category" means a defined group of marijuana products that are in the same form.  Marijuana product categories are:
    1. marijuana flower;
    2. marijuana concentrates; and
    3. marijuana-infused products, including the following subcategories:
       1. ingestible marijuana-infused products, including the following subcategories:
          1. edible; and
          2. transmucosal;
       2. non-ingestible marijuana-infused products, including the following subcategories:
          1. topical; and
          2. transdermal.
34. deleted: (33), end deletedinserted: (34), end inserted "Mechanical manufacturing" means the use of mechanical methods to produce or refine marijuana concentrates and extracts, such as but not limited to a press, centrifuge, or evaporation.
35. deleted: (34), end deletedinserted: (35), end inserted "Mixed strain" means multiple strains of marijuana.
36. deleted: (35), end deletedinserted: (36), end inserted "Monthly" means, for purposes of determining a registered cardholder's maximum monthly amount of usable marijuana, a period of 30 consecutive days.
37. deleted: (36), end deletedinserted: (37), end inserted "Motor vehicle," for purposes of these rules, means a vehicle propelled by its own power and designed or used to transport persons or property on the highways of the state with an interior passenger compartment.
38. deleted: (37), end deletedinserted: (38), end inserted "Non-ingestible marijuana-infused product" or "non-ingestible" means a product that contains marijuana and at least one other ingredient, is intended for consumption or use other than by smoking or vaporizing, is intended for external use only, and is either a topical marijuana-infused product or a transdermal marijuana-infused product.
39. deleted: (38), end deletedinserted: (39), end inserted "Opaque" means packaging that does not allow the contents to be seen when unopened.  Packaging may be opaque by virtue of the specific properties of the material of which it is composed, including any coating applied to it, or by means of a secondary opaque covering, such as a sticker.
40. deleted: (39), end deletedinserted: (40), end inserted "Package" or "packaging" means the immediate container in which a finished marijuana product is placed for retail sale to consumers and any outer container or wrapping used in the retail display of the marijuana or marijuana product to customers, and includes graphics, logos, and design elements.
41. deleted: (40), end deletedinserted: (41), end inserted "Performing work on behalf of any aspect of a marijuana business" means and includes:
    1. possessing, handling, producing, propagating, processing, securing, or selling marijuana or marijuana products at the licensed premises;
    2. recording of the possession, handling, production, propagation, processing, securing, or selling of marijuana or marijuana products at the licensed premises; and
    3. the direct supervision of a person described in (a) or (b).
42. deleted: (41), end deletedinserted: (42), end inserted "Physician statement" means a written statement by a Montana licensed physician on department forms certifying the registered cardholder applicant's debilitating condition.  Physician statement forms include:
    1. Physician Statement for Debilitating Condition; or
    2. Physician Statement for Minors.
43. deleted: (42), end deletedinserted: (43), end inserted "Property owner permission form" means a completed, signed, and notarized form which gives an applicant or licensee who is renting or leasing the property where marijuana will be cultivated and manufactured permission to do so by the property owner.  The form must be provided by the department.
44. deleted: (43), end deletedinserted: (44), end inserted "Psychoactive" means capable of affecting mental processes or cognition when used as intended.  A marijuana product is considered per se psychoactive if it is not a topical marijuana-infused product and the labeled potency is greater than .3% THC.
45. deleted: (44), end deletedinserted: (45), end inserted "Reconcile" for purposes of seed-to-sale tracking means to ensure that what is recorded in the seed-to-sale tracking system is consistent with what is physically located at the licensed premises.
46. deleted: (45), end deletedinserted: (46), end inserted "Red county" means a county where the majority of voters voted against approval of Initiative Measure No. 190 in the November 3, 2020 general election or where the local government has voted to prohibit all marijuana businesses pursuant to 16-12-301, MCA.  This definition does not include a municipality that has approved or disapproved a category or categories of marijuana businesses, as authorized in 16-12-301, MCA.
47. deleted: (46), end deletedinserted: (47), end inserted "Registered premises" has the same meaning as "licensed premises."
48. deleted: (47), end deletedinserted: (48), end inserted "Registry" means the department's confidential record identifying registered cardholders.
49. deleted: (48), end deletedinserted: (49), end inserted "Resident" means a person determined to be a resident of Montana for tax purposes, pursuant to ARM 42.15.109.
50. deleted: (49), end deletedinserted: (50), end inserted "Safety data sheet (SDS)" means a summary document that provides information about the hazards of a product and advice about safety precautions written by the manufacturer or supplier of the product.  An SDS must be provided by a supplier of a hazardous product at the time of sale.
51. deleted: (50), end deletedinserted: (51), end inserted "Seed-to-sale tracking system" means the system provided in 16-12-105, MCA, for tracking inventory of marijuana, marijuana concentrate, and marijuana-infused products from either the seed or the seedling stage until the marijuana or marijuana product is sold to a consumer.
52. deleted: (51), end deletedinserted: (52), end inserted "Standard operating procedure (SOP)" means a written document that provides detailed instructions for the performance of all aspects of an analysis, operation, or action.
53. deleted: (52), end deletedinserted: (53), end inserted "Strain" means a pure breed or hybrid variety of cannabis reflecting similar or identical combinations of properties such as appearance, taste, color, smell, cannabinoid profile, and potency.
54. deleted: (53), end deletedinserted: (54), end inserted "Test Batch" means a portion of a harvest or process lot that has been submitted for quality assurance testing.
55. deleted: (54), end deletedinserted: (55), end inserted "THC" means delta-9 tetrahydrocannabinol.
56. deleted: (55), end deletedinserted: (56), end inserted "THCA" means tetrahydrocannabinolic acid.
57. deleted: (56), end deletedinserted: (57), end inserted "Topical marijuana-infused product" or "topical" means a non-ingestible marijuana-infused product that is not psychoactive when used as intended.  Topicals include but are not limited to creams, salves, bath soaks, and lotions.
58. deleted: (57), end deletedinserted: (58), end inserted "Total potential psychoactive THC" or "Total THC" means the highest theoretical concentration of psychoactive THC available in a marijuana item achievable only through the complete conversion of THCa to THC with the application of heat during administration/consumption.  Total potential psychoactive THC is the sum of THC and THCa calculated using the following equation: Total potential psychoactive THC = (THCa x 0.877) + THC.
59. deleted: (58), end deletedinserted: (59), end inserted "Transdermal marijuana-infused product" or "transdermal" means a non-ingestible marijuana-infused product that contains at least one skin-permeation-enhancing ingredient to facilitate absorption through the skin into the bloodstream, and may be psychoactive when used as intended.  Transdermal products include but are not limited to adhesive patches applied to the skin.
60. deleted: (59), end deletedinserted: (60), end inserted "Transmucosal marijuana-infused product" means an ingestible marijuana-infused product that is intended to be placed in a body cavity and absorbed through the mucosal lining of the cavity, and may be psychoactive when used as intended.

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

Implementing statute(s): 16-12-101, 16-12-102, 16-12-104, 16-12-105, 16-12-112, 16-12-201, 16-12-207, 16-12-208, 16-12-210, 16-12-301, 16-12-501, 16-12-503, 16-12-508, 16-12-515, 16-12-533, MCA

42.39.105 General Licensee Requirements

1. A licensee must ensure that all employees wear a department-issued worker permit in a clearly visible manner on the outermost layer of clothing while working on behalf of the licensee.  A licensee is responsible for the security of all marijuana and marijuana products on a licensed premises, during transit, and under the supervision of the licensee or its employee until the marijuana or marijuana product is sold.   
2. A licensee is responsible for ensuring the department has a current and working email address and a current and valid mailing address on file to receive department correspondence.
3. A licensee is responsible for providing the department with its hours of operation for each licensed premises.  A licensee or its employee must be on-site during hours of operation and must make the licensed premises available to department inspectors during those hours.
4. A licensee must use a weighing device pursuant to 30-12-203, MCA, and ARM 24.351.101 whenever marijuana is:
   1. packaged for sale by weight;
   2. bought and sold by weight; and
   3. weighed for entry into the seed-to-sale tracking system.
5. A licensee must establish and maintain and make available for department inspection at all licensed premises written emergency procedures to be followed in case of a fire, chemical spill, or other emergency.
6. A licensee must maintain and make available for department inspection at all licensed premises the following documentation or information in a single binder, file, or other organized and readily accessible format:
   1. proof that any signage at the licensed premises complies with local jurisdiction sign ordinances and regulations;
   2. proof that licensees and employees of licensees are current on the required trainings;
   3. the emergency procedures required by (5);
   4. the written security plan required by ARM 42.39.121(1);
   5. for marijuana manufacturer licensees, the written standard operating procedures required by ARM 42.39.401(16);
   6. for marijuana cultivator licensees, the written standard operating procedures required by ARM 42.39.405(8); and
   7. for marijuana dispensary licensees, a written standard operating procedure for the destruction of returned marijuana or marijuana products. 
7. inserted: 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 ten days of any change in a natural person having day-to-day operational control over the business., end inserted

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

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

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 July 1, 2026, there are 211 cultivators, 142 manufacturers, and three testing laboratory licensees active within Montana.

The department contends that any directly-related small business impact does not arise from the proposed rulemaking but the public policy goals articulated by the Legislature under the Montana Marijuana Regulation and Taxation Act (MMRTA). The department also contends that impacted opponents would be taking issue with improved guidance for operating compliant cannabis businesses, and the department’s efforts to close operational or legal loopholes that are contrary to the MMRTA.

Bill Sponsor Notification

The bill sponsor contact requirements of 2-4-302, MCA, 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