Council Work Session

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Meeting Date: 07/06/2021  
TITLE:    Marijuana Legislation and Medical Marijuana Ordinance
Department: Legal  

No action is required of council at this time. However, staff requests direction from council regarding the following:
1.  Whether to develop proposed ordinances for the purpose of regulating marijuana businesses or undertake an election recall process on the electorate's prior approval of marijuana-related businesses
2.  If council chooses to take a regulatory approach, whether zoning of such marijuana-related businesses should be limited to specific areas of the city.
3.  If council chooses to take a regulatory approach, whether medical-marijuana only dispensaries should be zoned in a less restrictive manner than adult-use dispensaries, cultivators, and manufacturers.
4.  If council chooses to take a regulatory approach, whether council wishes to establish of a numerical cap for the number of licenses granted for medical marijuana dispensaries, medical marijuana businesses, or other marijuana related businesses.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
Montana voters, including those in Yellowstone County and the City of Billings, approved the 190-Initiative which permitted recreational adult-use marijuana in the state. The 190 initiative, as amended by the legislature in House Bill 701, was signed into law on May 18, 2021. HB 701 delayed many effective dates from the 190-Initiative, expanded some local government regulatory options, and merged and repealed some aspects of the existing Montana Medical Marijuana Act in with the new adult-use regulations. Most of these changes will be effective January 1, 2022.

Under the prior version of the Montana Medical Marijuana Act, state statutes expressly authorized the City of Billings to prohibit storefronts. BMCC Ordinance 11-5545 § 2, passed on November 14, 2011, prohibited storefronts under the authority granted to the City of Billings by state statute.

The attached questions and answers are provided to give the Billings City Council guidance in the decisions it faces related to marijuana regulation overall, as this will relate to the scope of authority the council has to regulate medical marijuana as well as adult-use marijuana. In particular, the attachment provides information concerning where the City of Billings may impose stricter requirements on marijuana businesses than are imposed by the state.

Montana medical marijuana businesses will be the first to be granted state licenses for recreational adult-use, but only to the extent that those medical marijuana businesses are in good standing with the state and any local jurisdiction as of January 1, 2022. For this reason, timely adoption of standards related to medical marijuana businesses maximizes the ability of the City of Billings to regulate both medical marijuana sales and adult-use marijuana businesses.
Staff seeks direction from council regarding whether to pursue recall election process or to begin work on proposed ordinances to regulate marijuana-related businesses.
The City of Billings currently derives no revenue from the sale of medical marijuana. House Bill 701 provides for a local-option marijuana excise tax not to exceed 3% on the retail value of all marijuana and marijuana products sold at an adult-use dispensary or a medical marijuana dispensary within a county. Imposition of any local excise tax requires an election at the county level. Unless or until such an election is held, there is no revenue impact to the City from the sale of medical marijuana and medical marijuana products.

Establishment or expansion of medical marijuana businesses, or marijuana businesses in general, will result in additional expenses for code enforcement, business licensing, and law enforcement and judicial resources for compliance with new state statutes and local ordinances.

The City of Billings retains the ability to license and zone medical marijuana businesses. Licensing fees should be set at a level sufficient to cover expenses related to additional code compliance, and fire and inspection needs.




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