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Marijuana businesses face closures as Yellowstone County mulls new zoning codes

Pot jar
Posted at 10:57 AM, Sep 15, 2023

BILLINGS — Time is ticking for Yellowstone County commissioners to iron out zoning laws for marijuana businesses, but the new measures could leave some businesses in the lurch.

The move from interim to permanent zoning regulations could impact business development in a number of ways, but one change gaining attention would put seven operational dispensaries in a tough spot–-forcing them out of zone compliance.

Two of those shops are Granite Peak Distribution and Lighthouse Organics, both of which set up business with county approval before the interim rules were adopted in 2021.

“We are on the corner of Shiloh and Central. This was a perfect spot that zoning permitted at the time to put a recreational and medical dispensary," said Drew Stensland, owner of Granite Peak Distribution.

That perfect spot is now in question.

“What they're proposing is a sunset period,” Stensland said. “We've been very open with everyone about what we are doing here the whole time. The sunset period would pretty much be a period that we would have to adhere to the new zoning laws, which is not possible, or shut our doors.”

Medical marijuana was legalized in 2004, followed by recreational marijuana in 2020, both through voter-approved ballot initiatives.

Currently, there are 57 businesses that either grow or sell marijuana in Yellowstone County.

For years, Yellowstone County did not have any specific zoning ordinances for dispensaries or cultivation sites, and businesses moved in with a green light from the county.

Lighthouse Organics moved into Lockwood nearly a decade ago but is now one of seven sites that could become non-compliant.

“We've been here since 2015 in medical and then recreational when it started in 2022,” said Trent Hancock, manager of Lighthouse Organics.

“I think that the November elections next year are going to be affected by this if it does shut us down,” Hancock said. “I think that the voters have been really clear about what they want and we're seeing a direct contradiction to what their desire was.”

In 2021, the county adopted interim zoning regulations per a new state law, but the interim laws could only stand for two years. Those rules expire in late November.

“At the time we had a pretty developed set of regulations, but they weren't final,” said Nicole Cromwell, zoning coordinator with the Billings Planning Division. “We didn't know what to expect from these new businesses and what would the effect be in Yellowstone County or in the city of Billings.”

“So for the last, almost two years now, we've been operating under those interim zoning regulations and keeping in touch with the community to see what is happening out there,” Cromwell said.

Over those two years, Cromwell said the planning department has conducted research into the real impacts of recreational marijuana in the greater county area and the results will be reflected in the move from interim to permanent rules.

“For example, in the interim regulations, we have a minimum separation distance for one of these businesses to a residential neighborhood district. And the county sheriff said there's really been no problem for these locations that are in commercial districts that are adjacent to residential zones,” Cromwell said.

“So really, it just isn't what people thought would happen, like robberies and drug people hanging out and dealing out the back door. All those kinds of dire predictions did not come true. So we are proposing in the permanent set of regulations to eliminate that separation requirement to residential zone districts.”

Stensland and Hancock say they understand why the county needs to adopt permanent zoning ordinances but feel that existing business owners should be grandfathered in, not shut down.

“Honestly, it's just a pro-business thing,” Stensland said. “Whether you are a mechanic shop, a casino, bar or a cannabis industry, we just want to set the precedent that when you are told you can do something and you put an investment into it, that it is stood behind and I think that's the way Billings and the leadership of it would want to see the direction going forward.”

The county does have the power to grandfather the seven businesses in, which will be voted on as a separate measure alongside the zoning changes by county commissioners on Oct. 3.

“Everybody's welcome to come and make a public comment,” Cromwell said. “The county commissioners are the elected body and they make the final decision even with the recommendation from the county zoning commission. They still hold their own public hearing, make their own findings, and make their own decisions.”