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    Bozeman cannabis providers sue city to reinstate local storefront cap | 406 Politics

    Frustrations over future control of Bozeman’s cannabis market boiled over last month, as providers work to maintain their territory ahead of the recreational market, which begins Jan. 1.

    Eight marijuana providers in Bozeman sued the city in late November to reinstate a 20-storefront cap within the city limits recently repealed by the city commission. Providers argue that removing the cap dilutes the investments made to keep their footing in the market, while attorneys for the city contend the cannabis providers cannot force the city to protect them from competition.

    Gallatin County District Court Judge John Brown heard arguments on the case on Dec. 7, although he has yet to issue a ruling on whether to put a halt on the ordinance repealing the cap.

    The shift comes as many local governments are retooling their ordinances around cannabis ahead of the start of recreational marijuana sales next month. Missoula’s city council installed 500-foot buffers between dispensaries, while the city of Billings will allow eight medical marijuana providers to operate in town and push all recreational sales outside of city limits.

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    Bozeman city commissioners gave initial approval to amend its local cannabis ordinance on Oct. 19, which repealed the limit on storefronts, maintained a restriction on a portion of Main Street and generally brought the ordinance closer in line with state law.

    The 20-storefront cap had been in place since 2012, and medical marijuana providers, who will be able to sell recreational cannabis, already hold all 20 licenses.

    “There’s definitely a demand for more,” assistant city attorney Anna Saverud told the commission on Oct. 19. “We’ve had a lot of calls about this.”

    Adam Arnold, a co-owner of Collective Elevation in Bozeman, argued removing the cap will create congestion in the city and scramble the arrangement providers and city planners have settled on after years of cooperation.

    “We’ve kind of carried this industry,” Arnold said during the Oct. 19 meeting. “Working back and forth with the city and to instantly grant new licenses without understanding those implications has a lot of negative things, not only for people who don’t want more cannabis businesses and those of us who already have cannabis businesses.”

    Montana is under a moratorium until mid-2023, in which only medical marijuana providers who were operating as of Nov. 3, 2020, when Montana voted to legalize recreational cannabis use, will be able to sell recreational cannabis after Jan. 1. But those already with state licenses to operate in Montana are able to open new locations, meaning businesses can still move into opportunistic markets like Bozeman.

    Saverud told the commission during that Oct. 19 meeting city staff drew its changes to the cannabis ordinances from the framework ultimately passed by the Legislature and signed into law in late May. The state has taken on much of the hands-on components regulation, and the city opted to regulate no tighter than the state.

    Commissioner Christopher Coburn said creating a more restrictive ordinance than what’s set out by the state may continue the stigmatization that’s at odds with Bozeman voters who approved legalization; Gallatin County passed recreational cannabis by 66% in the 2020 election, nearly 10 points higher than voters statewide.

    “I think those additional restrictions will be the perpetuation of, frankly, the stigmatized policy from 10 years ago,” Coburn said.

    In its Dec. 6 response to the lawsuit, the city argued that eliminating the cap does not devalue the city licenses, but authorizes the existing cannabis providers to expand their operations.

    In an undated letter to the city commission, the providers also argued that the 20 existing licenses would lose their value if the cap is repealed. They liken the situation to the state’s liquor license system, in which a limited number of licenses are allowed in the state and therefore are bought and sold, sometimes for millions of dollars, before a new bar can open in a tight market.

    But attorneys for the city contend the city’s licenses are nontransferable, unlike the state issued liquor licenses, and therefore have no independent value. Attorneys further wrote the providers’ arguments that repealing the cap will undercut their investments is “disingenuous.”

    Judge Brown has yet to issue a ruling on the injunction sought by the cannabis providers. Bozeman’s ordinance would go into effect in the New Year.



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