City marijuana prohibition challenged

The city’s long-standing prohibition on marijuana sales within the city limits is being challenged.

Janelle and Dale Yatsko, who operate a marijuana dispensary in the county, filed an application with the city for a Safety Inspection Certificate and inspection with Great Falls Fire Rescue to operate an adult-use dispensary within the city limits.

Currently, the city zoning code prohibits the sale of medical and recreational marijuana in the city limits. That prohibition was passed by the City Commission in 2010, according to the city, since marijuana remains a federally prohibited substance.

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Since city code prohibits the sale of marijuana within the city limits, GFFR and the city attorney’s office told the Yatskos that their application would not be processed.

The Yatskos’ attorney sent a letter to the city disagreeing with staff’s determination since state law had changed to allow recreational adult-use marijuana

The law changed when voters approved the I-190 ballot initiative in 2020, which allowed the sale of adult-use recreational marijuana in counties that approved the measure.

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Cascade County approved the ballot initiative and earlier this year, the county adopted zoning regulations to allow recreational marijuana sales in heavy industrial districts where it had already allowed medical marijuana.

The ballot initiative included language prohibiting municipalities from regulating the sale of recreational marijuana, but the 2021 Legislature repealed that language.

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The Yatskos’ attorney argues that since state law allows recreational marijuana, the city can’t regulate it, but since the Legislature repealed that language, the city argues that it retains it’s self-governing powers.

Since the Yatskos filed their disagreement letter with the city within 15 days of the SIC application being denied, the city manager’s office is treating it as an appeal, which will be considered by the City Commission during a special meeting on April 19.

Commissioners will be asked to consider three options:

  • Deny the appeal and uphold the city’s decision to not process or issue an SIC;
  • Grant the appeal and reverse the staff’s decision and direct staff to process and issue the SIC;
  • Deny the appeal and uphold the staff decision not to process the SIC, and direct staff to:
    • prepare and bring forward to the commission proposed changes to the city’s zoning code that would allow for the operation of adult-use marijuana-related activities within the city to allow for future SICs to be issued within those zoning regulations; or
    • prepare and bring forward a proposed referendum package to refer an ordinance prohibiting adult-use medical marijuana-related activities to city voters in November.

Staff is recommending against reversing staff’s decision and issuing the SIC since there a “lack of any current zoning structure that would dictate the location or other attributes of an adult-use marijuana operation within the city,” according to the staff report.

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Since the passage of the new state laws, Billings sent the adult-use recreational marijuana to the local ballot in November 2021 and voters decided to ban the activity.

The state taxes recreational marijuana at 20 percent, but those proceeds do not come to local governments, according to the Montana Department of Revenue.

Local governments have the option to enact a 3 percent tax on the sale of recreational marijuana, but so far, Cascade County has not pursued that and at least one commissioner has indicated they don’t have plans to do so.

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Therefore, none of the the tax revenue on recreational marijuana is coming to the county, city or school district.

Four counties have adopted the local option tax: Yellowstone, Missoula, Park and Dawson, according to DoR.

According to the city, the Yatskos have indicated they will prepare litigation since they believe their SIC was denied unlawfully.

The Yatskos are suing Cascade County over a zoning dispute related to their marijuana dispensary in the county. That case has been referred to the Montana Supreme Court where it is still pending.