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Local municipalities to weigh marijuana ordinances, tax

Marijuana Plant

A marijuana plant.

With the implementation of recreational marijuana on the Montana horizon, the governments of both Lewis and Clark County and the city of Helena are weighing their options regarding local control and taxation.

The Montana Legislature's House Bill 701 allows counties to put to voters a local excise tax of up to 3% on marijuana products.

Lewis and Clark County Chief Administrative Officer Roger Baltz said in an interview Thursday that the board of county commissioners has expressed an interest in such a tax.

Baltz said the county originally explored the idea of passing a resolution to put the tax on November's ballot, but that the Lewis and Clark County Attorney's Office expressed concern over language within HB 701 and recommended the discussion be brought back to the commission after Jan. 1 when recreational marijuana sales go live across the Treasure State.

"In terms of process, we feel there is less risk to wait until after Jan. 1," Baltz said. "The commission has indicated to me they do want to take it up and will want to have public input."

He added that the commission will likely hold multiple public hearings on the topic ahead of passing any resolution and that the proposed pot tax could appear on the June 7 ballot.

The new state law caps any local excise tax on marijuana at 3%, but leaves the door open for a lesser tax. Baltz said the conversation of possibly putting a lesser tax to voters has not occurred.

Baltz also said no potential revenue projections have been forecasted and no landing spots in the county budget have been identified for the potential pot tax revenue. The state law allows for a wide breadth of spending of such revenue.

City Manager Rachel Harlow-Schalk said during the city's Wednesday evening administrative meeting that she would like to see some of the pot tax revenue, should such a tax be enacted, spent on mental and behavioral health services, citing the area's emergent homelessness crisis.

City and county laws will also be reviewed in the coming months to determine which may need to be amended to incorporate recreational marijuana.

Currently on the county books is a law allowing for medical marijuana dispensaries to operate in rural growth areas under commission-approved conditional use permits. County attorneys will comb through such laws and make recommendations to the commissioners regarding potential amendments.

The Helena City Commission Wednesday also began its planning process for recreational marijuana.

City leadership could put to the voters possible ordinances prohibiting some or all types of marijuana businesses. Alternatively, the city could enact tighter sideboards on marijuana businesses with regard to zoning and business licensing regulations.

"The staff does not recommend referring an ordinance to the electorate prohibiting any of the types of marijuana businesses," City Attorney Thomas Jodoin said. "It seems clear that by the amount the voters passed both the initiatives, that (an ordinance banning sales) really isn't something desirable in the city."

In Lewis and Clark County, 61% of voters passed Constitutional Initiative 118 and 59% voted for Ballot Initiative 190.

Jodoin said his office and the city's community development department will work with the local zoning commission to determine what "updates may be necessary" with regard to zoning regulations, including which zoning districts pot shops can operate within and the size of signage.

The city currently regulates medical marijuana grow operations and dispensaries via those zoning regulations.

Grow operations can now operate under conditional use permits within manufacturing, industrial and commercial light manufacturing zoning districts. Dispensaries are allowed in business districts like the B-1, B-2, B-3, downtown, commercial light manufacturing and manufacturing zoning districts.

As of Nov. 3, Helena boasted 12 dispensaries in operation.

HB 701 dictates only the existing businesses or those in the application process as of Nov. 3 can begin selling as recreational marijuana dispensaries.

"(W)e will not see a wide proliferation of recreational marijuana businesses," Jodoin said.

The local governments must also decide if and how to regulate the consumption of marijuana.

The city has two ordinances in place dealing with the use of tobacco products in city-owned or -operated spaces and rights of way.

One deals with "voluntary outdoor smoke-free areas." The other is an older ban on any tobacco product in city parks.

"Both of those resolutions are oriented towards tobacco," Jodoin said. "So the question is does the commission desire to expand the scope of those resolutions to include marijuana and use of marijuana."

City Commissioners Heather O'Loughlin, Sean Logan and Emily Dean expressed support for the staff recommendations Wednesday.

"The one good thing about Montana maybe being a little bit behind some of the other states is that we can have a lot of lessons learned in terms of how things have rolled out in other communities," Dean said. "I think it's a good opportunity to make sure we're doing it right."

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Local Government and Crime Reporter

Nolan Lister is a reporter at the Helena Independent Record with an emphasis on local government and crime.

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