Pepper Petersen spent more than a year driving back and forth across Montana. First to gather signatures to get recreational marijuana on the ballot, and then to successfully campaign for its approval last fall. To him, that was the hard part.
“Culturally, we already won,” Petersen, president and CEO of the Montana Cannabis Guild, said of the effort to legalize recreational marijuana in 2020. “Now it’s just down to the details.”
Five months after Montana voters overwhelmingly approved Initiative 190 to legalize recreational cannabis for adults, three competing bills designed to sort out the details of the state’s implementation and regulation of recreational marijuana will end up on the House floor next week. This week, hearings on all three bills drew testimony from medical marijuana growers and cannabis opponents hoping to shape the final law.
House Bill 701 was introduced by Rep. Mike Hopkins, R-East Missoula, and is backed by Gov. Greg Gianforte. The bill has been criticized for straying significantly from Initiative 190 by requiring individual counties to vote on whether to allow recreational marijuana businesses in their community (the initiative language would allow counties the right to opt out) and for provisions that could open the door for out-of-state marijuana producers to dominate Montana’s recreational market.
HB 701 would have the state Department of Revenue manage both the recreational and medical marijuana programs (medical is presently under the oversight of the Department of Health and Human Services). Lastly, in Hopkins’ bill, revenue from a 20% tax on recreational cannabis would mostly end up in the state’s General Fund, to the chagrin of conservation advocates who note that Initiative 190 proposed steering morem marijuana tax money toward maintenance of public lands.
The second proposal is House Bill 670, authored by Rep. Derek Skees, R-Kalispell. HB 670 is more closely aligned with the initiative that passed last year, and Skees has described it as a “simplified version that doesn’t grow government.” Skees’ bill would lower the tax rate on recreational marijuana to 15%, while raising the rate on medical from 4% to 5%.
Last fall, Skees requested a bill that would have repealed Initiative 190, but later withdrew it, acknowledging that the initiative had broad public support. On Tuesday, during a hearing for HB 670, Skees said, “Recreational marijuana is here, whether we like it or not.” Skees did not respond to a request for additional comment. During the hearing he said he worried that if the legal market is too complicated, people will choose to break the law.
A third proposal that had been previously tabled, House Bill 707, was revived Thursday by the Business and Labor Committee after HB 701 was briefly tabled by the Taxation Committee. HB 707, authored by Brad Tschida, R-Missoula, would treat marijuana just like alcohol and allow the state to tax it wholesale.
While marijuana advocates are most excited about Skees’ bill, Petersen said he thinks it’s unlikely to gain any ground on Hopkins’ proposal, which has the backing of the governor.
On Wednesday, the Business and Labor Committee held a three-hour hearing about HB 701, which garnered testimony from more than 30 people, most in opposition to the present version due to its deviations from last year’s initiative. Petersen was among those who spoke against the bill, specifically because of the provision that would require counties to opt in. Petersen expressed concern that would put too much burden on local governments, especially regarding licensing of marijuana operations.
“We need to fix that, because we’re putting a lot of pressure on county officials and it’ll just create 56 different markets,” Petersen said. “It’d be a mess.”
That provision also concerned medical marijuana producers who are already in business in communities across the state. Petersen said under the new system, those growers would be grandfathered in only until their next license renewal. Michaela Schager, owner of Montana Medicinals in Missoula, was one of a number of medical marijuana producers who spoke during the hearing. She said she worries that investments already made in medical marijuana businesses could be for naught if counties they work in decide to not opt in.
“The rug could be pulled out from under us,” she said.
There are also concerns that out-of-state corporations — like the publicly traded MedMen, with nearly 30 retail stores in seven states where recreational weed is legal — could muscle into the market if HB 701 passes. Initiative 190 included language that required operators to live in the state for a specific time before they could open a marijuana business, but Hopkins’ bill eliminates that requirement. Petersen said that regardless of whether people are for or against legalization, he believed one thing Montanans agreed on was that they didn’t want big corporations getting involved with the market here.
“No one wants the Walmart of weed coming in here and setting up shop,” he said.
Steve Zabawa, a Billings car dealer and longtime marijuana opponent, testified in support of HB 701 and suggested an amendment: that the program go into effect in January 2023 instead of January 2022, after voters have a chance to vote on a referendum he hopes to put on the ballot next year. Zabawa also advocated for the provision requiring counties to opt in, saying that he believes most communities don’t want marijuana producers nearby.
Despite marijuana supporters’ issues with HB 701, it appears to be the bill most likely to make it to the governor’s desk this session. Dave Lewis, a former Republican member of the Montana House and Senate and a strategic adviser for the Montana Cannabis Guild, echoed industry concerns with the bill, but said he would ultimately support it.
“We can work with this to implement the initiative that was passed,” he said.
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