BILLINGS — The question of whether to allow seven types of marijuana businesses into the Billings city limits could be up to the voters again in an election on Nov. 2, after the City Council directed staff on Tuesday to research ballot language and dates to bring back at a future meeting.
Billings Assistant City Attorney Karen Tracy outlined the rights the city has within its borders to implement legalized marijuana under HB 701, which was signed by Gov. Greg Gianforte in May.
“There lies within the council’s discretion a lot of latitude on what type of businesses you want to permit, how you want to permit them, how many of those licenses you might want to authorize, where you want to zone those. There is a lot of discretion and the legislature has left that door open. Of course the more restrictive the ordinances, the more litigation the city may face," Tracy said.
Tracy noted that voters in Yellowstone County passed the original question to legalize adult use marijuana in Nov. 2020 by a margin of 1,142 votes. In Billings, voters passed the initiative by more than 4,000 votes, Tracy said.
Tracy added that the initiative passed "decisively" in all of Billings' five wards, minus Ward 4 which makes up the area underneath the Rimrocks west to the Ironwood subdivision.
There are seven different types of marijuana businesses described in HB 701, Tracy said.
Types of Marijuana Businesses
- Cultivation - Businesses that cultivate or grow marijuana plants
- Manufacturer - Businesses that create and sell marijuana products like edibles and/or concentrates.
- Medical Marijuana Dispensary - Businesses that grow and sell marijuana to people with a state-approved and doctor-prescribed medical marijuana card.
- Adult Use (Recreational) Dispensary - Businesses that sell marijuana products to adults over the age of 21.
- Combined Use License - A marijuana business offering both medical and adult use marijuana for sale.
- Testing Laboratory - A facility designed to test the potency and safety of marijuana products.
- Transportation - A business licensed to transport marijuana to dispensaries in Billings.
Medical marijuana dispensaries that are technically located in Yellowstone County, but are easily accessed from the city, have already been cultivating, manufacturing and selling medical marijuana products to registered card holders under the Montana Department of Health and Human Services program since 2016.
If the Council takes no action on the issue of marijuana, medical marijuana dispensaries already operating in Yellowstone County, and one within the city limits, will be allowed to sell marijuana products to people 21 and older on January 1, 2021, Tracy said.
HB 701 states already licensed medical marijuana dispensaries have the first 18 months in the newly-created market to themselves before the state will license new dispensaries for adult use.
One option is the Council could move to ask the voters whether to allow any number of the seven business types in the city limits, Tracy said.
But even if voters say no to all seven marijuana businesses, HB 701 also gives the Council the power to permit them to operate anyway, Tracy said.
“It appears that the legislature has intended to say, ‘Even if the voters say we want all seven categories (banned), the city may permissively allow those businesses to operate.' We believe that there is still quite a bit of discretion," Tracy said.
The Council voted 7-3 to explore the option of having the election question on marijuana businesses explored by the city staff and brought back for more information at a future council meeting.
Council members who voted in favor were Mike Yakawich, Roy Neese, Frank Ewalt, Penny Ronning, Mike Boyett, Shaun Brown and Mayor Bill Cole. Council members who voted in opposition were Kendra Shaw, Denise Joy, and Danny Choriki. Council member Pam Purinton was absent at the meeting.
If the marijuana question were to get to the Nov. 2 ballot, the Council would have to move quickly. City Administrator Chris Kukulski said the Council would have to approve a first reading of the ballot language by July 26 at the very latest, with a second reading following on Aug. 9.
"Ultimately, our goal is be back here in late summer or fall with regulations for first reading, second reading and 30 day effective date so everything can be squarely in place for January, when the laws all come effective. So part of my message here is, the goal isn't that we're going to walk out tonight with all the answers, this is the first of at least a couple of work session dialogues. Then getting into the meat of what's a draft ordinance really look like," Kukulski said.
If marijuana businesses do end up in the city limits, the Council will have to tackle the question of regulating their number and location within the city using zoning laws. Tracy said the Council could put a hard cap on the number of any type of marijuana business allowed to operate in the city.
HB 701 currently calls for a 500 foot separation between a marijuana business and any place of worship or school. The distance is measured in a straight line from the entrance of the school or church to the marijuana business front entrance. Tracy said the line is measured down one street, so there is a possibility a marijuana business could open back to back with a church or school.
The Council could increase or decrease the zoning distance requirements to be specific to any of the seven types of marijuana businesses, Tracy said.
There is also the question of whether voters will approve a 3 percent local option sales tax on the sale of marijuana products in Yellowstone County. The tax is intended to help local governments with the cost of implementing business licensing, enforcement and other aspects of marijuana legalization in HB 701.
The bill states only the the Yellowstone County Board of Commissioners can bring the local option tax issue before the voters in an election.
If approved, county would receive 50 percent share of the tax revenue, 45 percent would be distributed among county municipalities like Billings, Laurel and others, and the remaining five percent would go back to the state.
Kukulski said marijuana legalization will cost the city of Billings money.
“We are going to have costs. Even if I can’t quantify them to the dollar that we would all love to have. I seriously doubt the revenue is going to offset fully the cost," Kukulski said.
The Council informally noted their intentions to draft a letter to the Commissioners noting its favorable opinion on moving forward the question of a local option tax to an election.
The Council also directed city staff to form a committee of no more than five members to further hammer out the complexity of implementing legalized marijuana in Billings. If more than six council members were to meet, their rules state that prior notification to the public must be made and meeting minutes would need to be recorded.
The Tuesday meeting was a work session for the Council, no official decisions or votes were made at the meeting. To view the meeting in it's entirety, visit Community 7 TV's Facebook page by clicking here. To view the Council agenda with more information, click here.