HELENA — The start of recreational marijuana sales in Montana is now less than four months away, and local governments are beginning to consider what options they have for regulating the expanding industry.
House Bill 701, which overhauled the legal framework for recreational marijuana, allowed adult-use sales starting Jan. 1, 2022, in the 26 counties where most voters supported the legalization ballot measure Initiative 190.
HB 701 gave those counties – and cities within them – the ability to regulate marijuana businesses for public health, safety and welfare. They are also able to call an election, asking whether voters want to prohibit specific categories of businesses, like dispensaries, growers or manufacturers of marijuana extracts.
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At a meeting Wednesday, the Helena City Commission decided not to put that question before voters. City staff said they made that recommendation because Helena voters supported I-190 and its companion measure by a wide margin in November 2020.
“It seems clear that, by the amount that the voters passed both of the initiatives, that really isn’t something desirable in the city,” said City Attorney Thomas Jodoin.
However, commissioners did support moving forward with a review of zoning rules for marijuana, as well as city ordinances on smoking in public places.
Helena had about 12 medical marijuana dispensaries in operation at the time I-190 was approved. The city allows them in commercial and industrial areas. Marijuana grow operations can be in industrial zones, but only with a conditional use permit – and community development director Sharon Haugen says none are currently operating within city limits.
Haugen said the city will use the existing rules for medical marijuana as a starting point, but they have to consider how to handle the other types of businesses allowed by HB 701, including marijuana transporters and manufacturers.
The city Zoning Commission could begin considering rules for recreational marijuana businesses as soon as next month. Whatever recommendations they make will have to go back before the City Commission.
“There’ll be plenty of opportunities for the public to weigh in,” Haugen said.
Lewis and Clark County leaders say they haven’t started updating their own regulations for recreational marijuana. However, they have started looking at the possibility of adopting a local option tax on marijuana sales.
HB 701 lets counties put an additional tax of up to 3% before voters. If voters approve, 50% of the added revenue will go to the county, 45% to the cities and towns in the county, and 5% to the state for administrative costs.
Lewis and Clark County chief administrative officer Roger Baltz said the county’s attorneys don’t believe they can officially propose a tax until after Jan. 1, but county commissioners are interested in bringing it forward after that.
“After the resolution is passed, the ballot question is produced, and then it’s up to the voters to say yes or no,” he said.
The proposal would most likely appear on voters’ ballots in June 2022.
HB 701 gives flexibility on how local governments use the additional tax revenue. Baltz said the county has not made a final decision on what it could fund, but leaders are considering allocating some for behavioral health programs.
Governments may have some extra time to decide how they want to regulate recreational marijuana businesses, because only a limited number will immediately be able to operate. For the first 18 months, only existing medical providers from before the passage of I-190 will be allowed to sell to recreational customers. The first new adult-use providers won’t be able to start until July 2023.