Don’t panic, Montana: Here’s why legislators aren’t likely to delay legalization

In the two months since Montana’s adult-use cannabis legalization bill was voted into law, speculation has swirled that conservative state legislators intend to rip it to shreds. As the state Legislature opened its session last week, that opposition didn’t take long to appear. Right out of the gate, Republican state Rep. Bill Mercer stripped a $1.35 million request to fund a marijuana regulatory agency out of a House appropriations bill.

A brief media storm ensued.

Mercer’s move, however, may not be indicative of the long-term prospects for constructive cannabis measures in Helena.

While it wasn’t good news, legalization advocates and lawmakers alike suspect Mercer was simply making a procedural move to ensure there are sufficient funds to combat COVID-19 in the budget. Pepper Petersen, president and CEO of the Montana Cannabis Guild, was unfazed. “The conversation is not whether the Department of Revenue will be given funds to implement I-190, but how much and when,” he said.

By the end of the Legislature’s first week, there were clear signs that pragmatism on marijuana issues is likely to prevail.

Huge election win, now the details get decided

Last November the state’s dual marijuana legalization measures—Initiative 190 and Constitutional Initiative 118—won with 57% and 58% of the vote, respectively. That’s a larger share of the vote than nearly any candidate for statewide office.

Initiative 190 established the framework of the state’s adult-use program. It requires adult-use licensing to begin by Oct. 2021 for currently-operating medical dispensaries, with sales mandated to begin in Jan. 2022. Constitutional Initiative 118 altered the state constitution to set the legal age of cannabis consumption at 21. 

A lot of the details, big and small, still need to be worked out by legislators in this session, though—things like funding to pay the salaries of state cannabis regulators.

Republican supermajority elected, too

In that same Nov. 2020 election, Montana voters handed Republican lawmakers a supermajority in the state House and Senate, and elected the first Republican governor in 16 years, Greg Gianforte, who publicly opposed legalization during his own campaign.

Montana legislators “will not curtail the will of the people” and will move forward on marijuana legalization, says state Sen. Ellie Boldman.

This dramatic shift of power in state government immediately raised concerns that marijuana legalization would be repealed, delayed or watered down. Such a move wouldn’t be unprecedented. In Maine, the anti-cannabis intransigence of then-Gov. Paul LePage delayed the rollout of that state’s market for four years after voters passed adult use legalization in 2016.

In neighboring South Dakota, Republican Gov. Kristi Noem is actively using taxpayer dollars to undermine the cannabis legalization measures passed by voters in November.

“The scuttlebutt in the hallway is that any kind of delay would be very short in nature,” state Sen. Ellie Boldman (D) told Leafly. “It would not curtail the will of people to move forward in the industry, and [still] start in 2022.”

Governor: Against legalization, but won’t block it

Although radical prohibitionists have cooked up some preposterous anti-cannabis bills, Gov. Gianforte has vowed to implement the program despite his personal wariness. He has additionally encouraged the industry by including an estimated $52 million in cannabis tax revenue in his 2021-2023 state budget.

“The good news is that it does appear there is bipartisan support, including from our newly-elected governor, to move forward the will of the people. I have zero fear this will be repealed,” said Sen. Boldman. “[One of my] biggest concerns is to not lose the forest for the trees with some of the really salacious legislators who have efforts to repeal and do things that lack common sense and frankly probably won’t make it very far through the process.”

“The governor made it crystal clear that I-190 will be respected,” added Pepper Petersen, who ran the legalization campaign as the head of New Approach Montana. “It bodes well for a future in Montana where our contribution to the tax base of this state is going to be recognized and respected,” he added.

The state’s legislative session began last Monday, January 4 and will run through the end of April. (In Montana, as in Texas, state lawmakers only meet every other year.) This is where lawmakers will determine many of the regulatory details of the new adult-use program, from licensing fees to potency limits. There could potentially be changes to the state’s medical marijuana program as well.

As of this writing, legislators have drafted, or noted placeholders for, at least 46 marijuana-related bills, the bulk of which only have vague descriptions like “generally revise marijuana program.” 

Some bill drafts feel like relics from a bygone era of full prohibition. State Sen. David Howard (R), for instance, has a bill to “Reaffirm that Schedule 1 Drugs are Illegal in Montana.” But now that the federal MORE Act has become viable thanks to Democrats’ control of the US Senate this may no longer be even within the realm of possibility. 

And then there’s state Rep. Derek Skees (R), who requested a bill to repeal I-190 before the election even took place, and then rescinded it upon the bill’s passage. “Say [support was] 51%, then that bill would’ve been a good idea, because then it would’ve allowed us to say, ‘Well, listen, Montanans are a little confused on this. Not everybody was really for it,’” Skees said at the time by means of justifying his strategy.

Some good bills, too

State Sen. Boldman points out that there are some bills that are intended to actually improve Montana’s medical marijuana program. She cited an unnamed legislator who wants to permit military veterans to renew their state medical marijuana cards every three years instead of annually. Another bill would put both medical marijuana and adult-use under the purview of the state’s Department of Revenue. (Montana’s medical marijuana program is currently run by the Department of Health and Human Services).

Additionally, state Sen. Jason Small (R) is drafting a bill to ensure that Indigenous Montanans have a seat at the table of the recreational market. 

The placeholder bills that simply seek to “generally revise” marijuana or medical marijuana have been subject to much speculation. Pepper Petersen, of the Cannabis Guild, has heard rumors that legislators may attempt to remove chronic pain from the list of qualifying conditions. “There’s gonna be some fundamental attacks coming, no matter what,” he told Leafly.

Dispenary owners watching warily

Dispensary owners have their own questions and concerns. Many are apprehensive that, despite I-190’s prescribed one-year moratorium on rec licenses beyond pre-existing medical dispensaries, out-of-state players will eventually enter and dominate the market.

“[We want to] keep as much of the money in Montana, and benefiting Montana residents, as possible,” Will Conner, the co-owner of Zen Medicine, told Leafly.

Katrina Farnum, the owner of craft dispensary Garden Mother, in Missoula, is concerned that potentially steep licensing fees could also hobble small businesses. “A lot of people could end up folding out,” she pointed out.

Farnum cited extreme dosage limits as another issue to keep an eye on, and Conner is seeking clarity on whether a business can conduct recreational and medical sales from the same location.

COVID-19 challenges continue

One of the new legislature’s first actions was to eliminate nearly all COVID-related precautions for themselves, despite a spate of lawmakers being killed by the virus across the country and a lack of health care resources in the capital city of Helena. 

This recklessness poses a conundrum for activists (and many Democrats, who have opted to work, in part, remotely). Petersen, for one, has a chronic kidney disease. Although he is slated to get a vaccine soon, he’s still apprehensive of rubbing elbows with lawmakers, a central tenet of his work.

“The truth of lobbying and influence in the legislative process is [the significance of] personal relationships. You have to go to dinner with folks and chat them up,” he said. “There’s a lot less of that going on, for everyone.”

Governor has plans for the tax money

Gov. Gianforte announced his plans for cannabis tax revenue—which a University of Montana study estimates could exceed $52 million annually by 2026—during a press conference centered on his proposed state budget for the next two years. (The governor’s proposed budget will be amended by lawmakers before it is finalized.) Primarily, Gianforte hopes to use the revenue to fund a new annual $23 million substance abuse prevention and treatment programs called the HEART Act. 

“Few Montanans have been left untouched by the epidemic of addiction and drug use,” he said during the event, and called the program “one of the things I’m most proud of” in the proposed budget. He also cited plans to put cannabis tax revenue towards “economic development” projects. The governor’s communications team did not respond to a request for specificity on those projects.

Gianforte’s desire to capitalize on cannabis cash is likely amplified by Montana’s shrinking coal revenues and his intention to compensate for his proposed cuts to state income tax. 

Cannabis opportunities in towns that need them

Once there’s money on the table, “there’s a lot of pragmatism that starts to take over,” Petersen said. “Folks over in [the coal town of] Colstrip know the reality. They know the economy’s drastically changed and that marijuana provides an opportunity.”

During the legalization campaign, New Approach Montana proposed its own allocations of the revenue, including giving nearly half of it to environmental preservation efforts, but allocations are ultimately determined by the legislature.

“They want the money. We have an opportunity now to show the rest of the country that Montana can be a pioneer in recreational cannabis and make it work in a Republican-dominated state,” said Marc Lax, the CFO of Spark1, a powerhouse dispensary with four locations around Montana. “This is going to create jobs. It’s going to give towns a needed economic boost.”

Medical dispensaries: Some worry, others expand

While some small medical marijuana dispensaries are concerned that the opening of the adult-use market could wipe them out, other businesses are feeling optimistic.

“It’s full throttle for Spark1,” said Lax. The dispensary chain is nearing the state’s 20,000 square-foot canopy limit, and is planning on doubling that with a rec license.

“We’ve been preparing for a long while,” added Will Conner, of Zen Medicine. He’s not exaggerating: His dispensary, in the heart of Missoula, is opening a second location next month, in Wolf Point, a small town in northeastern Montana a full 500 miles away. To keep up with demand for both a new location and new customers, Zen Medicine is building out an 8,600 square foot facility that will include in-house CO2 extraction and triple the company’s current grow canopy. 

No more adult possession arrests

While the nuts and bolts of the program still need to be worked out, one of the most important components of legalization has already been enacted.

At midnight on January 1, possession of up to an ounce of cannabis in Montana became legal. Furthermore, an individual can now legally grow up to four plants at home, with a maximum of eight plants per household.

Racial disparities in Montana marijuana arrests are mind-boggling. A 2020 ACLU report concluded that Black Montanans were almost ten times more likely to be arrested for marijuana than their white peers, despite making up just 1% of the state population. Indigenous Montanans, who make up roughly 8% of the state population, accounted for 14% of marijuana arrests. In 2016 alone, Montana law enforcement made nearly 1,500 marijuana arrests, and almost all of them were for possession.

What’s happened already with legalization has changed the state of Montana, irrevocably and for the better. And with the reality of recreational cannabis coming into focus, Pepper Petersen and other activists can finally begin to celebrate.

“As a pragmatist I knew the tax revenue was the only thing that was going to break “Reefer Madness” people loose. And here we are. It’s proven all too true,” Petersen said. “For now, we’re trying to celebrate the fact that we did it, we’re here, we’re a legitimate part of the Montana economy.”