Lawmakers clear roadblock in recreational marijuana regs

HELENA — A state legislative panel has reached tentative consensus with the Montana Department of Revenue on a series of recreational marijuana regulations that lawmakers informally objected to in a meeting last week, resolving — at least for now — the latest in a series of hiccups that have cropped up as the state nears the launch of its adult-use cannabis market.

Lawmakers on the Economic Affairs Interim Committee, which has some oversight authority over administrative rulemaking in the state, worked with the Department of Revenue during the weekend to clear up differences in interpretation of the state’s recreational marijuana statute, which directs the department to draft rules to implement portions of Montana’s burgeoning cannabis program.

The committee ended its brief session on Monday with a unanimous vote to lift the blanket objection to the rulemaking process it voiced last week after the department presented several revisions to the rules.

“Lots of work went into this. I think we’ve found a pretty good balance for the people of Montana,” said Sen. Jason Ellsworth, R-Hamilton, who serves on the interim committee.

Adult-use marijuana markets in the state officially open Jan. 1.

The committee’s objection to the rulemaking process arose from a handful of sticking points: Ellsworth and Sen. Shane Morigeau, D-Missoula, for example, were concerned that language put forth by the department wouldn’t allow Native American tribes, which are awarded a single marijuana cultivator license under law, to scale up their production as commercial dispensaries can. Morigeau was also interested in seeing a moratorium on licensing for new marijuana testing facilities, so as to give existing labs that opened during the medical marijuana era an advantage in the early days of the adult-use market. Other changes were more technical in nature.

Morigeau dropped the issue of the testing lab moratorium — both lawmakers and the department must be wary of creating policy through rule that didn’t previously exist in state law — but the committee was able to clear up confusion with the department on other issues. The administrative rule covering the combined-use licenses afforded to tribes, for instance, now clarifies that those licenses are subject to the same scaling and tiering provisions as other dispensaries under the law.

Another revised rule also includes language requested by Ellsworth and Morigeau to emphasize that cultivators with existing outdoor grow operations may continue to grow outside, but may not scale up their production. State law generally bars future cultivators from outdoor growing.

This wasn’t the first time that the department’s rules rankled lawmakers and industry officials. Advertising and packaging restrictions, employment rules for those with previous criminal violations, a ban on CBD sales and more have all created heartburn, though DOR has generally been willing to work with lawmakers to meet legislative intent. The department has said it’s doing its best to interpret the state’s flagship marijuana implementation bill, HB701, which passed this year, but that its length, intricacy and occasional ambiguity doesn’t always make it easy.

“That bill is anything but a piece of perfection as far as legislative intent goes,” DOR Director Brendan Beatty told lawmakers at an interim committee meeting in November.

Morigeau acknowledged that there have been issues, but said that ultimately, both lawmakers and the department are working under challenging conditions to implement a potentially massive program under a tight time limit. The fact that lawmakers are constitutionally limited to 90 days every two years to actually legislate doesn’t make it much easier, he added.

“Trying to put the wheels on something of this magnitude was a challenge,” he said. “We had 90 days to do that, because otherwise a lot of this stuff would have been madness. Time has really been our greatest challenge in all of this. This is a new industry for the DOR, for Montana, it’s a learning experience for all of us.”

Arren Kimbel-Sannit is a reporter for the Daily Montanan, a nonprofit news organization based in Helena.