Montana lawmakers propose limiting new marijuana licenses for two more years

Marijuana Dispensary
Posted at 10:11 AM, Sep 15, 2022

HELENA — A Montana legislative committee has proposed a big change to the state’s recreational marijuana plan – keeping new adult-use dispensaries out of the state for another two years.

On Tuesday, lawmakers on the Economic Affairs Interim Committee approved moving forward with a draft bill that they have been working on for months, aimed at “cleaning up” the laws on marijuana sales. It will now go before the full Legislature for consideration during their 2023 session.

In many cases, the changes in the bill are small and technical in nature. However, Sen. Jason Ellsworth, R-Hamilton, suggested adding an additional change Tuesday – extending a moratorium on licenses for new marijuana businesses.

Since the start of recreational marijuana sales in January, the only businesses have been able to get new licenses are those that were operating in the medical marijuana system before the passage of the state’s legalization measure, Initiative 190, in November 2020. That restriction is currently set to expire June 30, 2023.

Ellsworth proposed maintaining the moratorium through June 30, 2025. He said Tuesday he believes the state already has enough licensees, and that leaders need longer to see how the system is working.

“We’re in the infancy of this; we’ve already seen a lot of holes in this,” he said. “This just gives us more time to see how these changes are actually going to take effect. I think we need to err on the side of caution here.”

Montana cannabis industry groups – which represent the existing businesses that will benefit from a continued moratorium – supported the proposal. Pepper Petersen, CEO of the Montana Cannabis Guild, told MTN providers still haven’t had the opportunity to operate under a stable regulatory system.

“The administrative rule process that defines how the law is interpreted is not over for the first set of rules,” he said. “So before another legislative session changes more rules, we’d like to see those finalized with this same group of people.”

Though marijuana sales have grown steadily throughout the year – and faster than the state predicted – Petersen said his members are still concerned the market may be approaching its capacity and about what could happen if large numbers of new businesses jumped in.

In the end, committee members approved adding the extended moratorium to their bill, though several expressed concerns about the last-minute nature of it.

“I find it very hard to vote for something where there hasn’t been complete transparency for the people that are being left out,” said Sen. Carlie Boland, D-Great Falls. “I will support it, because I know you need the assurance, but at the same time, it’s not the way I would have liked to come through – with a full-throated yes.”

Ellsworth acknowledged the proposal came late, but he said it was better to propose it now and give affected businesses notice that it could happen, rather than waiting until the session.

The committee did make another adjustment, intended to help some of the existing medical-only dispensaries that have been waiting for 2023 to join the recreational market. They proposed changing the effective date of the moratorium, which would allow some businesses that started after the 2020 election to begin selling adult-use marijuana.

Petersen said he doubts the Legislature would extend the moratorium any further than 2025, but he expected local governments could institute their own rules by that time that would effectively limit the number of marijuana businesses.

“At that point, will the industry want more time? I mean, always, they’re going to want more time,” he said. “But I think the Legislature’s going to say, ‘You’ve had your turn, the promises that were made to you were kept, and so let’s see what happens now – we’re going to open this up to other licensees.’ But we’ll take two years – we will absolutely take it, and we think it’s going to be beneficial to the state.”

One of the biggest changes that had already been included in the committee’s proposed bill draft was clarifying the rules for Montana tribes that want to take part in the adult-use marijuana program. Each of the state’s eight tribal nations was guaranteed a marijuana license. However, the Revenue Department determined that, because of the way the law is worded, those licenses would be limited to a very small cultivation area. The committee’s bill would allow tribal businesses to expand their operations in the same way as other licensees.