Industry, customers exhale with beginning of adult-use pot in Montana
It was late morning on New Years Day, and though much of downtown Helena was cold and quiet, business was good at the Cannabis Corner.
A steady stream of customers had braved the frigid temps all morning long, lining up in the dawn of a new day for Montana: Recreational marijuana had arrived. Though technically legal to possess up to a certain amount since the passage of Ballot Initiative 190 in 2020, pot was not available for legal purchase without a medical card until the new year, creating time for lawmakers and state officials to erect an expansive regulatory framework, and for dispensary owners, growers and more to understand it, stock up and get ready.
J.D. “Pepper” Petersen, the owner of the Cannabis Corner, got to know this bureaucracy better than most in the industry. He was at the fore of the campaign for legalizing adult-use marijuana, then, as president of the Montana Cannabis Guild, lobbied for dispensaries as legislators created a taxation, revenue collection and regulation structure for the marijuana sector in the form of House Bill 701.
“It’s been a lot of uncertainty,” he said. “It’s kind of like walking into the darkness, you know, without a headlamp, just having the faith that there’s a light at the end of that tunnel.”
But by Saturday, the ink was dry on hundreds of pages of statute and government rules, and at Cannabis Corner and hundreds of other dispensaries across the state, it was time to sell some weed.
People had been filtering in and out of Cannabis Corner all day, eager to partake in the new market. Petersen said some people danced in line; few, if any, griped about the 20% tax rate set by the state, or the potency limits on some concentrates and edibles. Some people had questions, others seemed to know what they were doing — either way, he said, they seemed to be overwhelmingly new faces, not existing medical card holders.
The dispensary had only set up shop in this location in the previous week, taking over the space from another dispensary that Petersen said downsized. Customers didn’t seem to mind that the old signage was still around — in an industry that the Governor’s budget office has estimated could do $130 million in sales in its first year, if you have the supply, you can find someone to buy it.
There was, however, some element of controlled chaos. There were issues, for example, with the point-of-sale system. Hundreds of dollars were changing hands with every transaction, and employees at the Cannabis Corner were tallying up and recording the totals with calculators and pens.
Other dispensaries reported similar stories — computer glitches or technical issues, the occasional long line. Some were finding that the edible products they were making for medical patients were too strong to sell to recreational customers under state law, which establishes a maximum of 10 milligrams of THC per single serving.
But by and large, the state’s marijuana retailers were doing a brisk business.
“We had a line out the door when we first opened,” said Jerry Spurlock, the owner of the Firefly Dispensary in Missoula. “We had one guy that literally was standing at the door in the cold because he wanted to be the first recreational sale in Missoula, and we’re the earliest to open.”
In addition to creating access to a market of marijuana consumers of unprecedented size in Montana, the passage of I-190 signaled something of a shift in virtues. More than half of Montana voters agreed: Possession of marijuana, in most instances, wasn’t worth a jail sentence, at least not while there’s money to be made. Accordingly, the law now carries provisions for expungement of convictions for actions now legal in the state, though the process has been slow-moving so far.
“There’s a lot of people who are stuck in the system for something they shouldn’t be,” said 34-year-old Joe Piersma of Helena, emerging from the 710 Montana dispensary on 11th Avenue in Helena. “You see liquor stores and casinos on every block, it’s kind of disconcerting that you could go home and smoke a plant and get arrested and have your life ruined.”
Piersma said he once had a medical card, back in the early days of Montana’s medical marijuana program, but didn’t get one again after the Legislature cracked down on the industry, drastically reducing the number of patients who could get cards. Now, he said, he feels the stigma is beginning to lift.
Back in Missoula, Spurlock said he sees the change in attitudes in the earnest questions he received from customers on launch day.
“When you ask a lot of questions, you get educated, and education destigmatizes what we do for a living,” he said.
Admittedly, marijuana is still not legal for sale in much of the state. Under HB701, counties where a majority of voters didn’t support I-190 will have to take separate votes to allow for recreational dispensaries, something that’s already occurred in Dawson County, for example.
But in the majority of Montana counties, anticipation is high. Petersen said he’s heard from some dispensaries that anticipate doubling or tripling the highest-volume day they ever had before full legalization.
After all, a big part of selling pot — and making it legal — is making money. Advocates with the I-190 campaign touted possible annual tax revenue of more than $40 million a year at a 20% tax rate. House Bill 701 directs the money generated from recreational sales to a variety of programs, from conservation to substance abuse prevention to veterans’ care to the general fund and more. Some localities have also taken the step of adopting an additional 3% excise tax.
Exactly how much the fledgling industry made in its first weekend won’t be clear until quarterly tax reports are due to the Department of Revenue in April. But Petersen is bullish on how much a dispensary like his can sell.
“The most this location’s ever done is 15 pounds in a day and that was after untethering,” he said, referring to the period when the Legislature removed restrictions on where medical patients could purchase cannabis. “And so I’m anticipating for rec, you know, 20, 25 pounds in a day. That is a lot of money.”
That’s all if he can maintain supply. Before, the market was contained: You could only sell to as many people as the state would provide medical cards. Now, the constraints are different, at least in Montana’s so-called “green” counties.
“Now we have to serve an additional, you know, 150,000 people,” Petersen said. “So we are anticipating that there are going to be some shortages. You gotta go out there and find supply.”