The state’s adult-use cannabis market opens in five months. Local governments have until then to sort out just what legalization will look like in their communities.

By Justin Franz, Montana Free Press

With five months until Montana’s adult-use marijuana market opens up, municipalities from Kalispell to Billings are figuring out what legal cannabis will look like in their communities.

Voters legalized general-use cannabis for adults last November and the Legislature sorted out additional details during its session this spring. It’s now up to municipalities to figure out things like which zoning districts dispensaries will be allowed in and whether legal marijuana will be subject to local option sales taxes. Some parts of the state, like Billings, are also considering prohibiting general-use cannabis altogether.

House Bill 701, the primary implementation law passed by state lawmakers this year to set up a framework for marijuana legalization, calls for a 20 percent state tax on all non-medical cannabis sold in the state, and also allows local voters to tack on an extra 3 percent municipal tax. Recently, Missoula County decided to let voters decide in November whether they would add that extra tax. Commissioner Josh Slotnick said the money raised from the tax, which the city and county would split, would go toward property tax relief and affordable housing programs.

Slotnick also said Missoula County is looking at how it might deal with an increase in cannabis grow operations and how that will fit with the county’s goal of not using electricity from fossil fuels by 2030. Indoor grow operations require a lot of energy, and Slotnick said the county will eventually want to do something to keep that in check. One possibility is applying the county’s cryptocurrency zoning regulations to cannabis. Earlier this year, Missoula County became one of the first in the country to require cryptocurrency mining operations to generate their own renewable energy. Slotnick said it was too early to know if the county would expand that to cannabis growers, but said it was a possibility.

Up north in the Flathead Valley, Kalispell is also looking at how it will zone cannabis operations. Presently, Kalispell does not allow any dispensaries within its city limits, a provision dating back to the legalization of medical marijuana. City Manager Doug Russell said that with passage of general-use marijuana, the city believes that continuing that prohibition would be illegal. Presently, city staff are drafting an ordinance to roll back that prohibition and set guidelines for where dispensaries can be located in the city. The draft ordinance is expected to go before the planning board this month and the city council in the fall. Among the zoning restrictions under consideration is keeping dispensaries from operating within 500 feet of schools and churches.

Meanwhile, in Billings, a different conversation has been underway in recent weeks. As written in I-190, the ballot measure that passed last November, counties had the ability to opt out of the adult-use cannabis market. But HB 701, the implementation bill, specifies that counties where the majority of voters supported legalization can opt out of allowing sales, and counties where the measure wasn’t supported would have to explicitly opt into the market.

The legalization measure passed narrowly in Yellowstone County, by roughly 1,100 votes. This week the county commission considered asking voters again if they wanted legal cannabis. On Tuesday, the commission voted 1-1 on putting the question to the voters. The tie killed the repeal effort (the third commissioner was out of town).

County Commissioner John Ostlund, who voted against asking the voters again, said that although he was personally against legal cannabis, “I don’t think you get to revote when you don’t like the outcome of an election.”

After the tie vote, the commissioners both voted in favor of asking voters in November if they wanted a 3 percent local option sales tax. While the county opted not to consider a repeal, the Billings City Council is expected to debate its own repeal next week.

For years, Montana’s medical marijuana program was managed by the Department of Public Health and Human Services, but last month it was moved under the Department of Revenue, which will also manage the general-use program. The revenue department is in the process of drafting administrative rules that will further define how legalization works by interpreting the law as written by the Legislature.

Pepper Petersen, president and CEO of the Montana Cannabis Guild, said that’s a process he’s watching closely.

One rule being considered would restrict the size of signs outside of dispensaries and require them to include a lengthy warning about the alleged dangers of marijuana use. Another would prohibit dispensaries from advertising their products. Petersen called the proposals a “radically conservative interpretation of the law.” A public hearing about the rules is scheduled in Helena August 13.

Petersen said that he hopes the Department of Revenue eventually treats dispensaries like they do liquor stores and that he believes what it is proposing is illegal. If such restrictions are implemented, Petersen said his organization is ready to fight.

“If they’re not willing to play ball, we’ll sue,” he said.

This story was first published by Montana Free Press.

Oklahoma Activists Prepare 2022 Ballot Measures to Legalize Marijuana And Overhaul State’s Medical Cannabis System

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A group of activists in Oklahoma wants to put a pair of cannabis initiatives on the state ballot in 2022, one that would overhaul the state’s massive medical marijuana system and another to legalize cannabis for all adults 21 and older.

While the medical and adult-use measures would appear on the ballot separately, they’re designed to work together and even overlap to some degree, said Lawrence Pasternack, an advocate and Oklahoma State University professor who helped write the draft initiatives. “There’s a robust statewide, grassroots effort to develop both a constitutional medical petition and a constitutional full-access petition,” he told Marijuana Moment. “They’re designed, if they both pass, to function in parallel to one another.”

The medical proposal would create a new state agency to regulate all types of legal cannabis, including hemp and high-THC marijuana, and would establish funding for programs including research, environmental remediation and mental health services. The adult-use proposal, meanwhile, would allow any adult 21 and older to purchase marijuana products from existing dispensaries. Individuals could also grow up to 12 cannabis plants at home and keep or give away the marijuana it produces.

The adult-use proposal would also make changes to the medical program and the state’s criminal justice system. If passed, it would establish a 15 percent tax on nonmedical sales to adults but reduce taxes on medical products from the current 7 percent tax down to zero. It would also provide for the expungement of past cannabis-related criminal convictions.

Advocates don’t envision the creation of a separate adult-use cannabis market, even if both measures become law. Instead they want to transform the state’s medical marijuana program—under which nearly 10 percent of all state residents are already registered—to allow adults to make purchases.

“Unlike states that have a small medical program, we have a program that effectively is like a full-access program already,” Pasternack said, noting that by some estimates, Oklahoma has more operating dispensaries than any other U.S. state—and more than double the number in California.

Voters passed the existing medical marijuana law in 2018 on a 57–43 margin, in a midterm primary election. Unlike many state medical marijuana programs, it does not require patients have any specific qualifying conditions; doctors can recommend cannabis for any condition they see fit.

“From the perspective of many people in the state, they see it as a full-access program with a hoop to jump through,” he added.

Even with such a permissive program, however, thousands of Oklahomans nevertheless face the risk of criminal prosecution for cannabis. “Despite the fact that anybody can get a card,” Pasternack argued, “between 4,000 and 6,000 people continue to be charged with simple possession” in the state each year.

Drafts of both ballot measures are available at the website of nonprofit advocacy group Oklahomans for Responsible Cannabis Action (ORCA), although language is currently being revised based on ongoing feedback from community members and legal advisors, Pasternack said. He and others recently spoke in a YouTube video about recent changes to the draft legislation.

Other groups, including the Oklahoma Cannabis Liberty Alliance (OCLA) and the nonprofit trade group OK4U Approved, are doing outreach and working to build support in Oklahoma City and Tulsa, respectively.

Chris Moe, an advocate and YouTuber, recently spoke on video about the petition drives and upcoming community meetings to solicit feedback and build support.

“Everybody is trying to step up and do something, I guess,” he told Marijuana Moment during a phone interview on Friday. While others formed ORCA and got the ball rolling, he said, “the community gatherings that are going to start this weekend are being organized by me.”

Pasternack said the groups hope to file the petitions with the state “in a few weeks,” then gather signatures to put both measures on the state ballot in 2022. While they intend to run both as constitutional amendments, he said it’s possible the adult-use measure would instead be a statutory change. He added that it wouldn’t be surprising to see legal challenges to the proposal.

Oklahoma activists had previously attempted to qualify a legalization measure for the 2020 ballot. They filed a petition to legalize cannabis for adult use in December 2019, but signature gathering fell short due in part to procedural delays and the coronavirus pandemic.

Looking ahead to 2022, Oklahoma isn’t the only state where voters could see cannabis reform on the ballot.

A pair of Wyoming reform initiatives—one to decriminalize marijuana possession and another to legalize medical cannabis—recently cleared an initial hurdle on the path to qualifying for the state’s 2022 ballot.

Idaho officials have recently cleared activists to begin collecting signatures for a revised initiative to legalize possession of marijuana that they hope to place before voters on the 2022 ballot. Advocates in the state are also working to qualify a separate measure to legalize medical cannabis for ballot access.

In South Dakota, activists last month filed four separate cannabis ballot measures for 2022.

North Dakota activists are formulating plans for a marijuana legalization measure after lawmakers failed to enact the reform this session.

A group of Missouri marijuana activists recently filed several separate initiatives to put marijuana reform on the state’s 2022 ballot, a move that comes as other advocacy groups are preparing additional efforts to collect signatures for cannabis ballot petitions of their own. Meanwhile, still other activists are focusing on getting the legislature to pass a resolution to place the question of legalization before voters next year.

Arkansas activists are currently collecting signatures for a marijuana legalization measure they want to put before voters next November.

In Maryland, the House speaker has pledged to pass legislation to place a marijuana legalization referendum on the 2022 ballot.

Nebraska marijuana activists have announced plans for a “mass scale” campaign to put medical cannabis legalization on the state’s 2022 ballot.

Ohio activists awaiting official clearance to collect signatures for a statewide ballot measure that would effectively force the legislature to consider cannabis reform. Meanwhile, other groups also recently qualified several measure to decriminalize cannabis to appear on local 2021 ballots.

A newly established Texas progressive group unveiled a campaign last month to put an initiative to decriminalize marijuana possession and ban no-knock warrants on this November’s ballot in Austin.

Advocates are also working to put marijuana initiatives on local ballots in South Carolina and West Virginia.

Meanwhile, the Florida Supreme Court has blocked two cannabis legalization initiatives for which activists had already collected thousands of signatures.

Texas Ruling Means Smokable Hemp Can Be Sold In State But Must Be Manufactured Elsewhere

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An appeals panel in Texas issued a mixed judgment Thursday in a lawsuit challenging the state’s ban on smokable hemp. Regulators may enforce a ban on the processing and manufacture of products intended for smoking or vaping, the court ruled, but they cannot prevent such products made elsewhere from being sold in the state.

The decision creates a situation in which consumers may be able to freely purchase smokable hemp flower and hemp-derived CBD oils for vaping, but only if the products are processed outside Texas and imported into the state.

Four Texas companies challenged the ban in a lawsuit last year, asking the court to declare the restrictions unconstitutional and allow hemp products intended for smoking or vaping to be produced and sold legally. In response, a state judge put the entire ban on hold last September, preventing the government from enforcing it until the matter could be resolved in court. Thursday’s ruling will modify that injunction.

In the ruling, a three-justice panel of the Third District Court of Appeals drew a distinction between the processing and manufacturing of smokable hemp—which lawmakers strictly prohibited when they legalized hemp in 2019—and distribution and sales, which regulators at the Texas Department of State Health Services (DSHS) forbade under a rule adopted a year later.

Writing for the panel, Justice Melissa Goodwin reasoned that lifting the ban on product sales was justified because the DSHS restriction went beyond the scope of lawmakers’ manufacturing ban.

“The Legislature required that the Department’s rules must reflect the principle that ‘the processing or manufacturing of a consumable hemp product for smoking is prohibited,’ but did not mention retail sale,” the judgment says. “Nevertheless, the Department adopted a rule that banned not only the processing and manufacturing of consumable hemp products for smoking, but also the distributing and retail sale of such products.”

But the appeals panel also reversed a portion of the lower court’s injunction that applied to manufacturing and processing of smokable hemp, which may ultimately allow that part of the state’s ban to go forward. Justices said the hemp companies failed to provide a clear basis for that part of the injunction.

“Because the Hemp Companies never provided ‘a plain and intelligible statement of the grounds’ to enjoin the enforcement of rule 300.104’s bans on manufacturing and processing consumable hemp products for smoking, we conclude that the trial court abused its discretion in granting the temporary injunction and enjoining the enforcement of that portion of the rule,” Goodwin wrote.

Lawyers for some of the hemp companies told Marijuana Moment on Friday that the rules around manufacturing and processing smokable hemp are not yet resolved, however. They said that portion of the ban is still being litigated and will likely see further argument in the trial court.

Other advocates in favor of broader legal access to cannabis products emphasized the significance of the court’s decision to allow smokable hemp to be sold in the state. But they lamented the fact that in-state manufacturing of the products would become illegal.

“The reversal of the ban on distributing and selling smokable hemp products is a big win for Texas farmers and hemp businesses. It is extremely important that regulatory overreach is kept in check so that Texas companies are not prevented from excelling in this market,” Jax Finkel, executive director of Foundation for an Informed Texas, told Marijuana Moment on Thursday. “I am hopeful that manufacture portion of the suit will end in a similar opinion.”

A judgement by the #Texas Court of Appeals has overturned a policy by the Texas Department of State Health Services to ban the distribution and retail sales of smokable #hemp products.

Court documents and more at: https://t.co/r3BBwCKKwk pic.twitter.com/HgjleTrizw

— Foundation Inform TX (@InformedTX) August 5, 2021

Susan Hays, an attorney representing hemp companies Custom Botanical and 1937 Apothecary, meanwhile, complained to Law360 that the ruling will hamper fair-minded hemp companies based in Texas while allowing less regulated out-of-state producers to sell products to Texas consumers.

“It’s a shame the state keeps fighting responsible, compliant Texas smokable manufacturers when out-of-state manufactures hemp products can be sold in Texas,” she said.

Cannabis reforms have come steadily but rather slowly in Texas, where the legislature meets for a relatively short session every two years. Despite bills being introduced this year that would have reduced penalties for possessing cannabis concentrates, revised the state’s hemp program and broadly decriminalized marijuana possession, none made it across the finish line.

In June, Gov. Greg Abbott (R) signed a bill into law to modestly expand the state’s limited medical marijuana program, adding cancer and post-traumatic stress disorder (PTSD) to the state’s list of qualifying conditions. It also doubled the allowable concentration of THC from 0.5 percent to one percent. (A House-approved version increased the THC limit to five percent, but the provision was diluted in the Senate.)

Separate legislation to require the state to study the therapeutic value of psychedelics like psilocybin, MDMA and ketamine for military veterans was passed by lawmakers and took effect without the governor’s signature.

Activists were also pushing Abbott to support further cannabis reforms during the state’s special legislative session this summer, but that plan flagged after the governor didn’t include the issue on the agenda and state Democrats left the state to protest Republicans’ sweeping elections overhaul bill that would make it harder for residents to vote.

Meanwhile, a new group is planning to run local ballot initiatives across the state intended to bring about reform at the municipal level. Unlike many other U.S. states, Texas has no statewide citizen initiative process.

Major metropolitan areas in the state, such as Austin and Dallas, have already independently enacted law enforcement policy changes that reduce penalties for marijuana-related offenses, for example by issuing citations and summons rather than pursuing criminal charges.

A strong majority of Texans back even broader reform, according to polling earlier this year by the University of Texas and the Texas Tribune. Sixty percent of voters in the state supported making cannabis legal “for any use,” signaling that local initiatives for more modest proposals like decriminalization would likely pass easily.

A more recent poll, released by the University of Texas and the Texas Tribune in June, found that nearly nine in 10 voters say marijuana should be legal in some form, with just 13 percent saying cannabis possession should be illegal under any circumstances.

Senate Committee Urges Rethink Of Hemp THC Limit And Pushes CBD Regulations

Correction: An earlier version of this story inaccurately described the consequences of the appeals court’s ruling on manufacturing and processing of smokable hemp intended to be smoked or vaped. The court’s reversal of that portion of the lower court’s temporary injunction was due to a pleading error by plaintiffs, not a ruling on the merits by the court. Lawyers for hemp companies say they intend to challenge any remaining portions of the ban, which they have argued are unconstitutional. An earlier headline also referred to “growing” smokable hemp, which is outside the scope of the lawsuit.

Photo courtesy of Kimberly Lawson.

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