Marijuana Plant

A marijuana plant.

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Montana’s road to full-scale legalization of marijuana has been bumpy, but remains on track for a Jan. 1, 2022, retail debut, state officials told legislators Wednesday.

The Montana Department of Revenue has been charged with overseeing the recreational marijuana industry, and has been ramping up its Cannabis Control Division since the Legislature passed a package of bills earlier this year setting the table for next year’s legalization. Voters overwhelmingly legalized recreational marijuana in the 2020 election.

Of the state’s 386 licensed medical marijuana dispensaries, 362 will open to recreational customers and 24 will remain as medical-only providers.

The rules set by the Legislature have produced some casualties: seven providers will be required to cease operations at the beginning of the new year, due to a provision allowing counties that did not approve legalization in the 2020 election to continue prohibition on recreational marijuana sales. While any cannabis provider that was licensed before the Nov. 3, 2020, election will be grandfathered in their respective counties, those seven were licensed after the election, Cannabis Control Division Administrator Kristan Barbour told the Economic Affairs Interim Committee on Wednesday.

“We have worked with this body to allow those particular businesses wholesale their product until Feb. 11, 2022, to try to help them with this transition out of the business,” Barbour said.

A few lawmakers, including Sen. Carlie Boland, D-Great Falls, and industry leaders, like Montana Cannabis Guild President J.P. “Pepper” Petersen, strained at the thought of private businesses closing due to the rules passed in the session earlier this year. Senate Pro Tempore Jason Ellsworth, a Hamilton Republican who was a central figure in passing the legislation, said the collateral damage was done. Interim committees are not able to reverse or alter legislation outside of the session.

“At the end of the day the law is the law, and we can’t as a committee in any way, shape or form go backward and change,” Ellsworth said.

The Department of Revenue’s inspectors have completed 359 inspections since the beginning of July, and current cannabis providers are also going through the growing pains of a tighter enforcement on building code compliance, Barbour told lawmakers.

The Department of Revenue has found “gaps in oversight and enforcement” with Department of Labor and Industry building code inspectors, she said.

“We anticipate some previously licensed locations will not be able to meet the fire our building codes and we will need to address those deficiencies,” she said.

Meanwhile, the department’s rules — beyond those set by the Legislature — are taking shape after several rounds of public comment. Providers across the state got their say on proposed advertising rules in August, and the department went back to the drawing board with a new set of rules Barbour said are set to go into effect Oct. 8. Additional rules on regulations for the industry have also been coming together, and Barbour told lawmakers that document would be available Thursday. The department will coordinate with the Secretary of State’s Office to set a public comment hearing on those rules in November, Barbour said.

“We want to make sure industry and the public know what to expect and how the department will enforce the law,” she said.

Internally, the department continues to fill out its new Cannabis Control Division staff, including inspectors and an education specialist, Barbour said.

The committee on Wednesday also got its roadmap for an evaluation of the recreational program’s implementation, to be prepared with legislation in-hand when the 2023 Legislature convenes. The study will collect input from the industry and the public, as well as gather information on recreational cannabis’ affect on local and state governments, addiction, crime and revenue.

At its next meeting in November, the committee will review the judicial branch’s progress in setting up its expungement court for those who wish to clear from their records any marijuana-related misdemeanor crime that would now be legal. The committee will also receive an overview on whether local jurisdictions are implementing the local-option tax available to fund local needs.

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