Montana Finalizes Marijuana Operational-Control and Residency Rule, Citing Major Ninth Circuit Ruling

Montana regulators have finalized new rules clarifying who is considered to have day-to-day operational control of a marijuana business, while citing a major federal appeals court ruling to reject arguments that the state’s residency requirement violates the U.S. Constitution.

The Montana Department of Revenue adopted the changes this week, with the new rules scheduled to take effect September 26. They require marijuana licensees to identify every person with day-to-day operational control of the business and provide documentation showing that each is a Montana resident.

Under the new definition, “day-to-day operational control” includes people with the authority or ability to direct or materially influence the routine management, operations or policies of a marijuana business, regardless of whether they are an owner.

The definition specifically includes people who have primary responsibility for supervising employees or managing a licensed location, make routine decisions involving cultivation, manufacturing, testing, distribution or retail sales, control business bank accounts or approve expenditures, or serve in positions such as general manager, operations manager, store manager or head cultivator.

The department said occasional oversight or temporary changes in employee duties would not necessarily qualify. For example, employees who temporarily handle cash, close a business or provide short-term oversight would not automatically be considered to have day-to-day operational control.

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