Libby ordinance committee takes up recreational marijuana

Libby City Council’s ordinance committee began debating how to regulate future recreational marijuana sales this week and raised the prospect of reviving an effort to regulate medicinal cannabis facilities in town.

Voters in Lincoln County approved the legalization of recreational marijuana during the 2020 election along with half the counties in the state. That means that starting Jan. 1, recreational marijuana can be sold in the county — with a great many caveats.

The most important one, locally speaking, limits sales to existing medical cannabis facilities for the first 18 months of legalization. It gives officials in Libby, which previously prohibited medical marijuana outfits, time to determine how and when recreational marijuana will be sold in town.

“That’s why there’s not a rush for us, because there’s nobody in the city with a medical marijuana license,” said City Councilor Kristin Smith, who led the discussion earlier this week.

The earliest a retailer could open up shop in Libby would be mid-2023, though medical marijuana facilities just outside of city limits could begin selling recreational products in the near future.

Though early days yet, the trio of city councilors at the Nov. 8 meeting identified a few areas that the municipality will need to address ahead of retail sales. Zach McNew, a local entrepreneur newly appointed to the council, pointed to a section of the city code pertaining to business licenses. One provision bars anyone pursuing a type of commerce prohibited by state or federal law from receiving a license. The sale of marijuana remains illegal under federal law.

“The way I read the business license ordinance, because it’s prohibited by law then we wouldn’t be able to issue a business license for it,” McNew said.

Smith thought that question should go to the city attorney, who was not in attendance, for clarification. At the very least, the city may need to clean up the language in the licensing ordinance, she said.

Much of the rest of the discussion focused on the number and proximity of future retail establishments within city limits. Barb Turner, who is helping Polson craft its local rules and is the owner of Alternative ReLeaf, told city councilors that many of the other details, including hours, proximity to schools and product packaging were covered in the state legislation that followed legalization. A few items are still being worked on at the state level, she said, complicating local efforts.

One option for controlling the number of outlets is putting a cap on the licenses, Turner told city councilors. She said she suspected county officials might prefer a system that emulates liquor licenses. McNew and Smith, both business owners, took a dim view of a strict limit.

“I’m not a big proponent of a limited number of licenses,” McNew said, pointing to the old adage of supply and demand. “If the town of Libby can support 100 marijuana shops, that’s a 100 thriving businesses.”

Smith, who co-owns Cabinet Mountain Brewing Co., said firsthand experience working with a quota system had soured her on it.

“It’s a terrible system,” she said.

Restricting dispensaries and retail outlets to certain neighborhoods created other potential problems, Turner said. For one, business owners with existing storefronts may object, she said.

While the discussion also included zoning for growing operations, Smith and fellow City Councilor Brian Zimmerman noted that anyone looking to set one up would face space constraints.

“Space-wise, about the only thing you would maybe have is over there by the Commerce Way area,” Zimmerman said.

Smith noted that Lincoln County Port Authority land, which remains outside of city limits, could become home, potentially, to a growing operation. But within the city she did not see any immediate room.

“My first inclination is to have no grow operations in the city and just have it retail,” she said.

Owing to the smell, Turner recommended that city councilors keep growing operations well away from residential neighborhoods.

“It can stink,” she said. “Especially in the winter months, in the early morning. It stinks.”

She also encouraged the city councilors to coordinate with county staff. In Lake County, officials formed a committee of that included a local superintendent of schools, law enforcement, an attorney, municipal planner and health care professionals to look at implementation of retail sales.

That would give the city a voice in how future tax revenue is broken out, Turner said. As is, the state enjoys a 20 percent tax on recreational marijuana. Three counties thus far, Missoula, Park and Yellowstone, have added a 3 percent tax on top of that baseline.

All three, according to the Montana Free Press, will allocate half of the tax revenue to county coffers, 45 percent to local municipalities and 5 percent to the state Department of Revenue. How much ends up in city coffers would be part of a discussion with county officials, Turner said.

In the meantime, Smith suggested breaking out a draft ordinance allowing for and regulating medical marijuana dispensaries in Libby. In 2017, the city’s planning board recommended letting the facilities open up in city limits under certain guidelines. But Libby City Council defeated the measure in a 3-2 vote, meaning that dispensaries were prohibited in town. Smith was one of the two councilors to vote in favor of the doomed ordinance.

“We can pursue the medical piece already, right now,” she said. “We have a template for that. We can dust that off.”