City to hear SIC revocation appeal over marijuana
Updated 1:30 p.m. Oct. 16
City Commissioners will hold a special meeting to hear an appeal by the owner of Wild West Wellness of the revocation of their safety inspection certificate.
The meeting was scheduled for Oct. 16, but has been canceled and will be rescheduled, according to city staff.
City Manager Greg Doyon told The Electric that information provided by Wild West that should have been included in last week’s packet was not provided to commissioners in time for them to properly review and/or prepare for the hearing, which will be rescheduled as soon as possible.
Under city code, businesses must have an SIC to operate in the city. To be issued, an application for an SIC must be approved by the planning, building, fire, health and public works departments.
Earlier this year, city staff revoked the SIC for Wild West Wellness on the ground’s that they were operating a dispensary in violation of city zoning rules and state law.
During the Oct. 16 meeting, staff will ask commissioners to uphold the revocation.
Wild West Wellness is located at 725 1st Ave. N. and on its SIC application submitted in November 2022, Mack Ethington wrote, “we sell glass and accessory’s,” according to the city, and described it as a “head shop.”
Mike McIntosh, Great Falls Fire Rescue assistant chief for fire prevention, contacted Ethington to schedule an inspection, during which McIntosh did not see product in the store.
McIntosh asked the nature of the business, to which Ethington responded the shop would be selling CBD and pipes, according to the city.
The SIC was issued on Dec. 1, 2022.
Shortly thereafter, the city began receiving complaints that the shop was selling marijuana products, which are not legal in that zoning district nor was the shop licensed by the state as a dispensary.
The Electric also receiving complaints about the shop and asked the Montana Department of Revenue, which said they’d also received complaints.
The city enacted the prohibition of marijuana, both medical and recreational, in 2010 and the rule had not been challenged since, including in the years that medical marijuana was legalized in Montana and Cascade County, but not within the city limits.
In September, the city commission adopted a new zoning ordinance that allowed marijuana operations only within light and heavy industrial districts in the city limits.
As a result of district court ruling, that ordinance went into effect immediately.
In November 2022, Great Falls voters opted to allow marijuana operations in the city, meaning the new ordinance remained in effect.
Several dispensaries have opened in the city in the areas allowed under city zoning regulations.
Wild West Wellness is in the C-4 central commercial core zoning district, where marijuana operations are prohibited.
In early December 2022, McIntosh and Tom Micuda, deputy planning director, made an unannounced visit to the shop.
The city officials observed display cases with plants that appeared to be marijuana, according to the city.
They were greeted by Dan Kanewske, who is listed as the store’s registered agent and member of the parent company, M and D International LLC, who escorted them to a private room to discuss the matter, according to the city.
Ethington joined them and said they weren’t selling marijuana but a “hemp derivative,” according to city staff.
Staff continued receiving complaints and reports that Wild West Wellness was operating as a marijuana dispensary.
In one such citizen report, photos showed a bottle with two labels, one placed over the other. The labels had different information about the bottle’s contents.
Google Maps identifies the store as a “cannabis store” and online reviews, including one from Kanewske, refer to it as a dispensary. The shop’s website indicates it is a “high-end cannabis store.”
“Thus, the information available to the city in January of 2023 strongly suggested that appellant was operating a marijuana dispensary at 725 1st Avenue North. At a minimum, Appellant was not simply selling glass and CBD as it represented in its SIC application, or operating a “head shop.” But, rather, was selling cannabis-based intoxicants,” according to the city.
In January, the city notified the shop owners of its intent to revoke their SIC because they appeared to be selling marijuana products in a location not zoned for marijuana sales.
In March, city staff met with the shop owners, who indicated they weren’t selling marijuana as it was defined by Montana law.
At the time, Montana laws defined marijuana, in part, as “all plant material from the genus cannabis containing tetrahydrocannabinol (THC).”
But, Montana law excluded from the definition of marijuana, any “hemp” and hemp derivative “with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent,” according to the city.
During the March meeting, shop owners told city officials that it sold cannabis-based products, but that they were hemp or hemp derived, according to staff.
Wild West Wellness’ owners argued that though their products had more that 20 percent THC concentrations, the delta-9 THC concentrations were below 0.3 percent and the majority of the project was delta-8 and delta-10, according to the staff report.
At the end of March, City Manager Greg Doyon sent shop owners a letter stating that they did not provide “a good explanation as to why the business represented itself as a ‘head-shop’ which in common terms means a business
selling articles and pipes for drug use, but not the drug itself.”
Because that “misrepresentation directly led the city to approve the SIC without a proper understanding of the proposed business activity,” the city required the shop owners to submit a new SIC application with detailed information no the products it’s selling.
Doyon’s letter required the shop owners to submit a new SIC application by April 7 and that failure to do so would result in a formal revocation of their existing SIC, which could result in fines or other enforcement measures.
The shop owner’s didn’t submit a new application but did submit a response letter on April 7 in which their lawyer disagreed with Doyon that ‘head shop’ wasn’t an accurate description.
“The ‘supplemental information’ provided as to the products being sold by appellant was not viewed by staff as a ‘good faith’ effort to comply with…Doyon’s request for ‘detailed supporting information’ on the intoxicants it was selling to customers,” according to the staff report.
In May, Gov. Greg Gianforte signed HB 948, which makes it illegal in the Montana to manufacture, process or sell a synthetic marijuana product, including any synthetic cannabinoid.
The law also requires businesses selling any product containing THC levels in excess of 0.3 percent, regardless of the type, to be licensed as a dispensary through the Montana Department of Revenue.
In mid-May, the DoR told The Electric that prior to the law’s passage, the Cannabis Control Division did not have any regulatory oversight or enforcement jurisdiction on unlicensed businesses.
“With the passage of HB 948 the department and local law enforcement can investigate this business and the products they are selling. In the event they are selling synthetic marijuana they can be issued a cease-and-desist order and can be fined up to a $1,000/day. The CCD has received multiple complaints about this business and until HB 948 was passed we did not have any regulatory jurisdiction.”
The city argues that Wild West Wellness is operating in violation of state law.
As of Oct. 15, Wild West Wellness does not appear on the state’s list of licensed dispensaries.
On Oct. 17, the DoR told The Electric that “there are multiple state agencies and local law enforcement identified in HB 948 who have the authority to inspect and seek a cease-and-desist order against a business actively selling synthetic cannabis product. To day, the CCD has not inspected or imposed a civil penalty on Wild West Wellness.”
Over the summer, Wild West Wellness’ parent company stopped operating and filed a civil suit in district court in Lewis and Clark County seeking to have HB 948 invalidated, arguing it was unconstitutionally vague. The court dismissed that claim.
In July, the city formally revoked Wild West Wellness’ SIC.
The shop appears to have renewed operations and selling products that require a state license, according to the staff report.
During the Oct. 16 meeting, commissioners will be asked to consider whether the shop owners failed to disclose its intent to sell cannabis and whether the shop owners were required to be licensed after HB 948 was signed into law.