Lawmakers this week began considering a new cap on dispensaries in Montana, an idea that’s been percolating in local communities as the recreational industry continues to grow.
The draft proposal presented to the Economic Affairs Interim Committee on Monday would limit licensure with the Montana Department of Revenue, which oversees the cannabis industry, to existing license holders through 2027.
A marijuana business license holder could move a dispensary to a new location but could not seek additional dispensaries during that timeframe. Likewise those existing licenses could be transferred or sold to another owner.
Marijuana providers and state lawmakers were all generally supportive of the proposal, which is still a long ways from becoming law.
A green cross flashes in the store front of a cannibals dispensary located on Montana Street in Uptown Butte. The green cross is a symbol for medical marijuana.
Since recreational sales launched at the beginning of 2022, the state Legislature has throttled down the industry through a moratorium on new businesses, in theory giving Montana’s longstanding medical marijuana industry the first go at the new market. That moratorium was initially through 2023, and later extended to 2025.
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That moratorium was intended to hold the line on new businesses, but those existing businesses have no limit on the number of dispensaries they could operate.
Montana has over 450 dispensaries listed with the Department of Revenue. In 2021, before recreational sales began, Montana had 380 licensed dispensaries.
The matter is still very early in the process and is simply a draft lawmakers on the Economic Affairs Interim Committee will wrestle with before it is, or isn’t, introduced at the 2025 Legislature.
Montana marijuana providers on Monday testified in support of the proposal now being considered by state lawmakers, asking that the Department of Revenue’s Cannabis Control Division be given a chance to catch up with the regulatory obligations at hand before more providers enter the market.
“It’s freezing the footprint on the ground,” Kate Cholewa, government affairs specialist with the Montana Cannabis Industry Association, told the committee Monday. “The department is very short-handed, and there’s a difference between what they need, just to get up to speed with what’s happening now, compared to what they’ll need if you’re going to break (the original moratorium) wide open.”
The proposal also follows a recent measure under consideration by the Missoula City Council to enact a new ban on new dispensary licenses. According to figures provided to the city council there, Missoula has the most dispensaries per capita in the entire country.
“I don’t think there’s a single person in this room who wants to see another dispensary on Main Street,” Montana Cannabis Guild President J.D. “Pepper” Petersen told the committee. “We see that in Missoula. Missoula is where all this started.”
There has been some question about whether local governments can be more restrictive than what state law prescribes. Missoula, for instance, already requires more distance between dispensaries than state law. But when a Cascade County group asked for a cap on the number of dispensaries, county officials said they have no authority to do so.
Lawmakers this week asked staff to bring additional bill drafts to further clarify that local governments do have that authority to reach past state law in restricting the industry.
They likewise held off taking further action on the dispensary cap bill until the committee’s next meeting in August.
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