Montana Cannabis Leader Calls for Immediate Freeze on Licenses
"Far too many dispensaries"
A Montana cannabis industry leader is calling for a two-year moratorium on all cannabis licenses in the state.
Pepper Petersen, president of the Montana Cannabis Guild (MCG), said Montana has “far too many dispensaries.”
Petersen told The Montana Chronicles that the cannabis industry has been asking to regulate the number of marijuana shops “since the beginning.”
“The fact that legislators did not want to deal with this issue, city councils did not want to deal with this issue. County commissions did not want to deal with this issue is what brought us to the point that we're at now,” he said.
Recreational marijuana usage became legal in 2020 when Montana voters approved I-190.
As a state, Montana has the second most cannabis dispensaries per 100,000 people in the country.
Petersen said that Montanans are “overwhelmingly libertarian” when it comes to cannabis.
“It's like, ‘Hey, I don't care. You do what you want. I might not do it. Might not be my cup of tea, but if you want to do it, you're an adult,’” he added.
Since licensed recreational marijuana sales became legal in Montana in 2022, Petersen said the state has made over “$1 billion in total cannabis retail sales since recreational legalization and $40 million a year in tax revenue.” He added that the cannabis industry pays more in taxes than “alcohol and tobacco combined.”
Limiting dispensaries got resistance from the Montana Legislature during the last session, especially from Democrats, according to Petersen.
“We never understood what the opposition was to. We don't want any more licensees. We don’t want any more out-of-state companies coming in and becoming [the] corporate Walmart of weed, and we got pushed back from the legislature,” he said.
The MCG president said that Montana cities have been unwilling to engage in zoning.
Petersen said that Missoula is the “perfect example.” He said that the city “cooked up a fake public health emergency” that said the “mere presence of dispensaries is negative” to its community.
In July 2024, Missoula put a moratorium on new marijuana dispensary licenses. Its moratorium will last for two years. The city cited public health concerns, according to The Missoula Current.
According to NBC Montana, a 2020 study showed Missoula had the highest number of marijuana shops per 50,000 people in the country.
Petersen said Missoula “messed up big time” and called it “a major zoning failure.”
He added that the “pushback” the cannabis industry receives is “largely a misunderstanding” of the process.
Petersen said “there's still these fears that exist.”
“And let's face it, 43 percent of the population did not vote in our favor. And so they have questions, and they have concerns,” Petersen explained. “And if we, as an industry, don't pay attention to that, we don't answer those concerns, and we don't focus our businesses on being positive impact members of the community, then we're gonna have troubles, and we don't want troubles.”
The MCG president added that “at this point, for any political side, especially, that maybe opposed to cannabis to say, ‘Oh, it's gone too far.’ Well, it's gone too far because your communities designed the system like this.”
Kate Cholewa, who is a lobbyist for the Montana Cannabis Industry Association (MCIA), told The Chronicles that Montana’s current regulation system for marijuana is “strict.”
“It's very challenging. The law changes usually in relatively significant ways,” she said. “Keeping up with compliance is a daunting task for these businesses.”
Petersen said that cannabis is the most regulated industry in Montana besides water.
The longest bill in the history of Montana, according to Petersen, was House Bill 701, which regulates the cannabis industry. This bill is 153 pages and passed into law during the 2021 legislative session.
Petersen, who is a former National Rifle Association fundraiser, said it is “almost laughable” for someone to ask if the cannabis industry is going to be regulated like alcohol.
“We're far more regulated than alcohol in every way,” he said.
Montana regulates liquor licenses in the state on a population-based quota. The state established the quota in 1947. A liquor license currently available in the state that will go to auction costs, on average, almost $300,000.
Petersen said that Montana has a “head in sand” approach to zoning substances like cannabis and alcohol.
Cholewa said that anyone who owns a cannabis license in Montana would benefit from a population-based quota system. However, she added that the “legislature has made clear that they're not going to do that.” The lobbyist added that the legislators “don’t like that system.”
The MCG president said the liquor license system in Montana has “created a tremendous amount of value” in the licenses and “taken options away from local communities.”
“If they put a quota immediately on cannabis licenses. Those people who had the licenses would have a million-dollar asset in their hands,” he explained. “That's the last thing that the state legislature will ever do.”
In this legislative session, the cannabis industry wants a freeze of all marijuana licenses in Montana, according to Petersen.
“We've asked for is a freeze of all facilities. No more dispensaries licensed at all for the next two years,” Petersen said. “No more grows licensed. No more nothing licensed. And let's see where we can go from there.”
Cholewa said the MCIA supports Senate Bill (SB) 27, which was crafted in the “economic affairs interim committee to address exactly this issue.”
The committee came up with something called “freeze the footprint,” according to the lobbyist.
SB 27, according to Cholewa, would “put a hold on how many facilities are licensed in the state.”
She said that there are 995 marijuana facilities licensed in the state.
SB 27 also allows for someone to buy and move a license as well, she added.
“A license can move, but the number has to stay the same across the state for the next two years. Then that lifts, and the legislature will decide what they want to do next,” the lobbyist said.
According to the Montana Department of Revenue, “from January 1, 2022, until July 1, 2025, only Montana medical marijuana licensees who were licensed on April 27, 2021 (or had an application pending with DPHHS on that date) may be issued a license for cultivation, manufacture, or sale of adult-use marijuana.”
The Montana Free Press reported that the state has 436 marijuana retailers currently open.
Cholewa said this legislation would “freeze the number of locations” but remove the “moratorium on who can own those licenses.”
She added that when the moratorium for cannabis license owners expires July 1st, “other people can come in” to buy a license.
The lobbyist said that SB 27 is “not trying to control something. It's saying we are going to manage this. We're not going to lock it down. We're going to take it a step at a time and make decisions as we go about how this industry and market grow and evolve in Montana.”
“This bill really was trying to take into consideration the varying positions people have right now,” she explained. “It's a pretty even-handed piece of legislation.”
Petersen said he would go into Montana communities to discuss this issue if this two-year moratorium happened.
“This is a zoning issue. And there's a way to deal with this. That's designed in all of our city charters and county governments,” the MCG president said. “Those are the mechanisms that we need to use, but we need to commence the state legislature right now to pause everything so we can go into the counties and the cities.”
He said he would start in Montana’s major seven cities and then move to different parts of the state.
“It won't be the licenses that have value. They'll be virtually worthless. It'll be the locations, just like every other business in the world,” he added.
The MCG president said it is “irresponsible for the state government not to act and for the local governments not to act.”
Petersen said “plenty” of legislators who are businessmen say they don’t want “any regulation of any sort” but also don’t want to see more marijuana dispensaries. However, he said these legislators “don’t feel comfortable with saddling” businesses with additional regulations.
“I think largely that's why we haven't seen a lot of regulation related to cannabis. People just kind of want to let it shake itself out,” he said.
Cholewa stated that the MCIA considers the state’s current marijuana dispensary market to be “oversaturated.”
Petersen added that many people in the marijuana industry are going through “consolidations and closures right now.”
“We naturally believe the number of dispensers is going to continue to decrease, but we think you got to freeze it now before you can wait for those people to go through attrition,” he said.
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Zachery Schmidt is the founder of The Montana Chronicles. If you have any tips, please send them to montanachronicles@proton.me.
Photo “Marijuana Shop” by My 420 Tours. CC BY-SA 4.0.
