Lawmakers consider bill to limit where Montana marijuana businesses can operate

HELENA — On Thursday, Montana lawmakers heard testimony on a bill that would put new limits on where marijuana businesses can operate. Supporters said it would address some local communities’ concerns about the industry, but business owners called it an unnecessary imposition.

The House Human Services Committee held a hearing on House Bill 265, sponsored by Rep. Tanner Smith, R-Lakeside. The bill would make two major changes: increasing the minimum distance between marijuana businesses and schools or places of worship, and prohibiting new marijuana dispensaries in areas where voters opposed the 2020 legalization vote.

Currently, the entrance to a marijuana business must be at least 500 feet from the entrance of any school or place of worship, if they’re on the same street. HB 265 would increase that distance to a minimum of 1,000 feet between any corners of the buildings. Businesses closer than that would have to close or relocate by January 2024.

Smith said he was concerned about a dispensary that opened behind Lakeside Elementary School and which was not subject to the current rule because it’s on a different street. In addition, residents in Roberts protested against a dispensary that opened across the highway from their school, but again was allowed because it was on another street. That dispensary is currently closed, after Carbon County leaders put in additional zoning restrictions for marijuana businesses.

Roberts Public Schools superintendent Alex Ator testified in favor of the bill, saying the dispensary had been visible from his school’s playground.

“Our eight-year-olds, every time they go down that slide and see, ‘Marijuana dispensary, marijuana dispensary, marijuana dispensary,” he said. “And that sign is now down, but that sign was up for four months. And that is the repetition of practice that our kids got coming off the slide.”

HB 265 would also block the state from approving any new adult-use or medical marijuana dispensary licenses in voting precincts where the majority of voters opposed Initiative 190, the 2020 ballot measure that legalized recreational marijuana in the state. Existing dispensaries in those areas would be allowed to remain, unless their licenses are suspended or revoked.

In 2021, the Legislature approved House Bill 701, which set up the current framework for the state’s marijuana industry. It established that, in general, adult-use dispensaries would be allowed in so-called “green counties” where more voters supported I-190, and prohibited in “red counties” where more voters opposed it. However, it provided methods for counties to switch from red to green and vice versa, and for cities to hold elections to prohibit marijuana businesses.

Smith said, while the law gives cities the power to ask voters to ban marijuana businesses, it doesn’t provide that authority for unincorporated communities. He said HB 265 would provide protections for rural areas that generally opposed legalization.

“These small towns with 1,000 to 4,000 people have no city council, and therefore have no representation,” said Smith. “They’re out on an island and governed by the majority of the people in the nearest city. The county commissioners could have passed ordinances – some did, but many didn’t; Flathead County did not.”

Representatives of marijuana businesses said Thursday that there was no need for this bill, as counties have the power to put stricter setback requirements and many other regulations in place if they choose.

“If we have local problems with marijuana, let our local governments deal with that,” said Pepper Petersen, president and CEO of the Montana Cannabis Guild. “Flathead County has all of the power to do what they want in their county, as per 701.”

Petersen said marijuana businesses take seriously the legal requirements not to sell to those younger than 21 or allow them on the premises, and he objected to proponents’ characterizations of the industry.

Opponents said many current dispensaries are within the 1,000-foot limit that the bill would set and would have to move, and the provisions allowing existing businesses to stay in precincts that rejected I-190 were not strong enough.

Kate Cholewa, with the Montana Cannabis Industry Association, said the testimony hadn’t really explained the full impact on marijuana businesses.

“Really, the way this bill is set up, it is in some ways, sort of like setting the chessboard to pick off dispensaries throughout the state,” she said.

Also during Thursday’s hearing, the committee heard testimony on House Bill 286, which would allow money from Montana’s HEART Fund to go toward youth suicide prevention. The HEART Fund receives $6 million a year in tax revenue from Montana marijuana sales – money that is then leveraged for additional federal matching funds.

Advocates said Thursday that they expected to be able to use HEART Fund dollars for suicide prevention work, but the language did not clearly allow it, and this bill would resolve that issue.