Recreational marijuana sign

Derek Hall, of Stink Blossom, left, and Richard Abromeit, of Montana Advanced Caregivers, post a sign opposing repealing recreational marijuana sales on Rimrock Road in Billings.

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One in four Montana counties will vote on some form of marijuana-related ballot measure in next month’s primary election as the industry continues to take root across the state.

Most of those 14 counties are looking to cash in on the new industry. Twelve counties, in western Montana, southeast Montana and along the Hi-Line, will each vote on adding a local 3% tax on medical and recreational cannabis sales to capture local revenues on the growing industry. On Wednesday, the Montana Department of Revenue announced total cannabis sales reached $98.2 million from the start of the year through the end of April, resulting in $13.5 million in tax revenue for the state.

Two counties, on the other hand, will vote to potentially reject recreational sales from their communities, which saw a majority of voters approve legalization in 2020.

One of those is Yellowstone County. As the state’s most populous county, it’s seen the highest sales figures for recreational cannabis in the state since the market opened in January. Still, county commissioners there voted unanimously in December to send the question of allowing recreational cannabis sales within the county to the June ballot.

The other county is Granite in rural western Montana, although the measure there was put on the ballot by a citizen’s initiative. Petitioners gathered 401 approved signatures, beyond the 15% threshold of registered voters, to qualify the measure. Granite County, anchored by Philipsburg and Drummond, approved legalization in 2020 with 55% of the vote, more than the 53% who voted for the hospital district mill levy in the same election.

‘Starts to look seedy’

Still, Rick McGill, one of the signature gatherers for the repeal effort, said this week he was encouraged by the support he got going door to door.

“What will it do to the look of the community?” McGill said he’d ask people as he collected signatures. “You get shops, pot shops, in a county and it starts to look seedy.”

McGill said he’s never been inclined toward political involvement, other than yelling at the politics on TV. But he’s concerned growing visibility of the marijuana industry would be incongruent with communities like Philipsburg, a town that makes its tourism money on its historic Main Street aesthetic.

But Heidi Hinkle, who also gathered signatures for the effort, said in a phone interview her primary concern is the availability to young people in the community. Like alcohol, the legal limit to consume cannabis products is 21. And, like alcohol, someone could purchase cannabis products, then turn around and hand them to kids waiting around the corner.

“More or less I’m concerned about our grandkids and kids,” Hinkle said.

Hinkle has no illusions about availability being just over the county line if her efforts are successful in the June primary election; Granite County would still be surrounded by “green” counties. She also repeated stigma-driven talking points about laced drugs and the black market masquerading as legitimate in the industry.

“I’m thinking of cartels and drug dealers,” she said. “They may want to cash in on our community, too.”

Ban recreational marijuana sign

One of the signs asking Granite County voters to ban recreational cannabis sales in the June primary election.

There’s only one dispensary selling recreational cannabis in Granite County. Kendrick Richmond, manager at Top Shelf Botanicals in Philipsburg, said his employees are fingerprinted and subject to background checks as a requisite for working for the business. Cannabis products also must be tested before they reach the shelves, per state law.

“Honestly, I really hope that the educated minds and the people who really understand what we’re trying to do here vote against prohibition,” Richmond said. “What you’re really doing is bringing the black market into play.”

It’s difficult to say whether politics will drive the vote on recreational cannabis in Granite County next month. The county population is just over 3,300 according to the 2020 census, and in the same year voters approved marijuana legalization, 67% voted for Donald Trump’s reelection.

Richmond said if the voters do choose to do away with recreational cannabis sales in Granite County, the truth is, his shop won’t be going anywhere. Top Shelf Botanicals will simply revert back to being a medical-only dispensary, like it was before Jan. 1. But Richmond wonders what people think has changed in the four months since.

“Has the sky fallen?” he asks. “I don’t think so. I can’t see a whole lot of things that are different.”

Flux in Yellowstone County

In Billings, providers have been living under a constant state of change. Yellowstone County passed legalization in 2020, but a year later voters passed a ban to prohibit recreational marijuana storefronts within Billings city limits. County voters then approved adding a local option tax to cannabis sales. Then, county commissioners, noting Yellowstone County narrowly approved legalization in 2020, unanimously voted in December to put the question of flipping the county from “green” to “red” on this June’s ballot.

Since that time, 22 cannabis providers have gathered under the banner of the Yellowstone County Providers Association, which has set up a political committee, Better for Montana, to oppose the prohibition effort. The pro-cannabis crowd has held events in Billings and the city is awash in campaign signs asking voters to reject the ban at the ballot box next month.

Richard Abromeit is the president of the providers association and employs 35 people as the owner of Montana Advanced Caregivers. He said the challenge in the coming month is reactivating voters who turned out for legalization in 2020 but may not be inclined to cast a vote in a midterm primary election, which historically sees low turnout.

“If they end up voting to ban recreational (sales) in Yellowstone County I will have to reduce my staff by 50%,” Abromeit said.

The group’s messaging is focused so far on the tax revenues coming in through the regulated market. With the taxes on recreational and medical marijuana approved by county voters last year, Yellowstone County has collected more than a half million dollars in revenues. County officials have considered using the revenues for mental health and addiction services, but have held off any allocations pending next month’s vote.

Four counties have imposed local tax revenues on cannabis sales so far. Yellowstone, Park and Dawson counties each added a 3% tax on both recreational and medical sales. Missoula County voters approved that 3% tax on recreational sales, but turned down a tax on medical marijuana.

Montana law dictates revenue from these local-level taxes be split three ways. Half of what’s collected goes to the county where the sales are from, 45% to the municipalities based on population and 5% to the state to defray the costs of administering the revenues. The state collects its revenues from a 20% tax on recreational cannabis sales and a 4% tax on medical sales.

Derek Hall, co-owner of Stink Blossom, said the campaign to keep Yellowstone County open for recreational cannabis business has been a unifying agent for what’s long been a cutthroat industry.

“This is the first time this many providers have gotten together in the state,” he said. “It’s cool to see this many providers having this same fight and agenda on their hands.”

The opponent pushing prohibition in Yellowstone County is Steve Zabawa, who opposed the industry’s growth well before legalization went to the ballot in 2020. In March, Zabawa said he believes voters were fleeced in the 2020 election with additional promises in the legalization ballot measure that were taken out or reduced by the Legislature the following year. He’s betting this time around voters will be more focused on whether or not they want dispensaries popping up in their town.

If that notion sounds like McGill’s pitch to voters in Granite County, it’s because Zabawa’s political committee, SafeMontana, has set up a satellite committee in Granite County and provided campaigning support, such as signs and social media blitzes, for McGill and other supporters. Zabawa told the Montana State News Bureau in March he’s eyeing conservative counties where legalization may be vulnerable to a second vote, with designs on Flathead and Ravalli counties as well.

Money talks

There’s no denying the cannabis industry’s growth in Montana. Sales continue to climb statewide. The number of storefronts in Bozeman has increased 60%, with 12 business licenses approved since the city lifted its 20-storefront cap in December. Gallatin County, anchored by the college ski town, is among the dozen counties that will vote next month to get its cut of the new market with a 3% tax on recreational and medical marijuana sales.

Ravalli, Lake, Powell, Lewis and Clark, Silver Bow, Carbon, Big Horn, Rosebud, Richland, Roosevelt and Blaine counties will also vote next month on the local option tax on cannabis sales.

Robert “Tino” Sonora is an associate director at the Bureau of Business and Economic Research and economy professor at the University of Montana, and was a part of a study in 2020 that forecast sales would reach roughly $217.2 million by the end of 2022. That projection appears to be conservatively on track, with sales through the first four months of the year totaling $98.2 million.

Sarah Thomas of The Higher Standard

Sarah Thomas of The Higher Standard in Missoula stocks marijuana products in December as the store prepared for the beginning of recreational sales.

Sonora said in a phone interview this week the growing number of counties seeking to tack on the local option tax tracks with historical data from Colorado, where he spent time before moving to Montana. This state, while subject to a much smaller consumer base, has the upper hand on Colorado’s in that mistakes with testing processes and consistencies across products have already played out in other states.

Colorado also allowed counties to flip to “red” or “green” by local votes, Sonora said. Although over time, “red” counties in rural Colorado tended to drift toward opening for recreational sales, and eventually imposing local taxes on sales.

“There’s always going to be some kind of moral argument against it, that’s how you have dry counties” with alcohol in some states, Sonora said. “But eventually, money talks. I suspect some counties will stay red, I really do. But if you see huge outflows of people driving to green counties, and then spending money at restaurants in those green counties, they might start rethinking things.”

How counties appropriate those new tax revenues is a local decision. Dawson County commissioners earmarked their revenues for law enforcement.

It hasn’t taken long for Blaine County on the Hi-Line to see the potential. The Montana Department of Revenue clocked $0 in medical and recreational cannabis sales in January. That number of combined sales went up to $50,000 in February, doubled to $118,000 in March and then $124,000 in April, according to the Department of Revenue.

Blaine County Commissioner Miles Hutton said there’s no plan yet for what gap tax revenues might fill, but he doesn’t like the idea of leaving money on the table.

“We’re a rural county, for cryin’ out loud,” he said. “There’s always places for money, whether you agree with what’s going on or not.”

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