City Commission upholds staff decision on dispensary, will send recreational marijuana to November ballot
City Commissioners voted 4-1 during a special meeting on April 19 to uphold a staff decision not to process a safety inspection certificate application for a recreational marijuana dispensary in the city limits.
The city code currently prohibits the sale of medical and recreational marijuana as it remains a federally prohibited substance and did not process the SIC application on those grounds.
Dale and Janelle Yatsko operate a marijuana dispensary in the county and submitted the SIC application to operate one within the city limits.
City staff told the Yatskos that they would not process the application since the sale of marijuana is prohibited within the city limits under city code, despite the state’s new laws legalizing adult-use marijuana.
The same scenario occurred last fall when an SIC application was submitted for a marijuana business within the city and staff did not process the application. That applicant opted not to pursue any further action, according to City Attorney Jeff Hindoien, but had contacted his office this week about the issue.
The city enacted the prohibition of marijuana, both medical and recreational, in 2010 and the rule has not been challenged since, including in the years that medical marijuana was legalized in Montana and Cascade County, but not within the city limits.
Commissioners voted to uphold the staff decision but also to send the question of whether the sale of marijuana should be permitted within the city limits to the November ballot. A series of steps still need to be taken to put that language on the ballot.
Commissioner Eric Hinebauch voted against the measure and said that they should reverse the staff decision and process the SIC application.
Several commissioners said that the matter before them was a simple legal question on whether the SIC should be processed.
“We’re just deciding something really simple and pretty mundane actually” to grant a SIC, Commissioner Rick Tryon said.
But the decision could have significant impact on the city as a reversal of the staff decision could have allowed a dispensary within the city limits with no regulatory structure or zoning rules. It could also open the door for others to submit applications and operate without that regulatory structure.
Cascade County allows medical and recreational marijuana dispensaries in the heavy industrial district only and the county’s zoning rules do not apply within the city.
In 2020, a statewide initiative, I-190, was on the November ballot asking voters whether recreational marijuana should be legalized. Cascade County voters approved the measure. The initiative had language prohibiting local governments from regulating the sale of medical marijuana, but the 2021 Legislature removed much of that language, and the city argues that it retains self-governing powers and the authority to regulate the sale of marijuana in its jurisdiction.
Counties that approved I-190 are considered green counties and those that rejected it are considered red counties.
Raph Graybill, the attorney for the Yatskos, said that language remains in the law that does not allow local governments to outright prohibit the sale of marijuana in green counties, but that it can regulate it through zoning and other regulations.
City attorneys and other staff disagree.
The Yatskos have indicated a willingness to take the question of whether the city can prohibit marijuana dispensaries to court.
They have already sued the county in District Court and the case has been referred to the Montana Supreme Court where it is pending.
Graybill said that the only thing standing between the Yatskos and state approval to operate the second dispensary is approval from the City of Great Falls.
Commissioners asked what would happen if the granted the Yatskos appeal but then voters opted to prohibit the sale of marijuana within the city limits.
Graybill said it was up to the Yatskos to make that determination if it was worth the risk for their business.
Commissioner Eric Hinebauch asked if there could be a red city within a green county, if local voters were to decide to prohibit the sale of marijuana within the city limits.
That was what voters in the City of Billings did in November 2021 when the question was asked on their ballot. Yellowstone County voted in favor of legalizing marijuana on the 2020 ballot initiative.
The information about the Billings vote has been reported in local press, on The Electric and was included in the staff report for the special April 19 meeting for the Great Falls commission.
Several commissioners, in their explanation for why they wanted to send the marijuana question to local voters, said that the 2020 ballot measure was sold to voters as something that would send tax revenue to localities, but in reality, none of it currently comes to counties and cities, unless they enact a local tax.
Cascade County Commissioners have said they are not pursuing the 3 percent local option tax on recreational marijuana.
City Attorney Jeff Hindoien said that when Billings sent the issue to the voters, the sale of recreational marijuana hadn’t opened yet, but since it’s now open and the state is issuing licenses, it creates a different issue should the city process SIC applications here with no regulatory structure in place.
Since the 2020 ballot initiative passed, The Electric asked multiple times if city officials were looking at addressing any possible code changes in anticipation of the potential conflict between the existing city code and the new state law.
City staff told The Electric that they would continue implementing the existing code pending any further action from the commission. Commissioners took no action or directed staff to take any action from November 2020 until the April 19 meeting on the Yatsko appeal.
Two people spoke in favor of reversing the city staff decision and processing the Yatskos’ SIC application.
Seven people spoke in opposition to reversing the decision and processing the SIC.
Several of those opposed mentioned that they were filing a petition with the county elections office to put recreational marijuana on the local November ballot in the hopes of prohibiting it in the local community.
County elections officials said they were not in receipt of nor aware of any petition related to marijuana for the November ballot.
Several of them said that they’re concerned about increasing access to marijuana for young people and that the there are no existing rules within the city to regulate dispensaries.
Beth Morrison, a substance abuse prevention specialist in the county, asked that if commissioners were to allow dispensaries that they leave time to create regulations, but would prefer they not allow the use in the city at all.
“I, for one, would be devastated if this came into the city, with what I see our youth are contending with,” Morrison said.
Shane Etzwiler, director of the Great Falls Area Chamber of Commerce, said there are concerns for workforce development and drug use is a factor in that effort. He told commissioners about reports he’s read concerning black market activity and illegal dispensaries in other states that have legalized marijuana.
Graybill said that both I-190 and the 2021 Legislature gave time for local governments to plan for when the recreational marijuana laws would go into effect in January 2022.