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Montana’s draft marijuana employee permitting rule troubles industry

Woman holding a small cannabis plant in her garden.

Marijuana industry stakeholders are concerned that a draft state rule implementing Montana’s adult-use cannabis law appears to limit industry employment opportunities for those with past convictions, even beyond the restrictions laid out in the state’s flagship recreational pot bill, HB 701, which passed this legislative session.

The rule is slated to be published for review in the Montana Administrative Register at the end of the week and heard at a public meeting on November 30. A copy obtained by the Daily Montanan notes that a conviction, guilty plea or plea of no contest for any crime in the previous three years would be “grounds for suspension or revocation of a (marijuana) worker permit,” as would be the “conviction, guilty plea, or plea of no contest to violating a marijuana law of any other state” at any time, among other offenses.

This language isn’t necessarily reflective of the policy that the state Department of Revenue, the agency tasked with overseeing the cannabis program, will adopt — public comment and associated revisions are an essential part of the rulemaking process, and the Department has adjusted its marijuana policymaking after feedback before.

But it nonetheless appears to deviate from the employment provisions passed under HB701, an extensive law drafted this year to implement the state’s recreational marijuana policy regime created with the passage of Initiative 190 in 2020, say industry representatives.

“It’s something we have now made legal, and we’re saying if you were convicted of simple possession in 2019, now you can’t participate in Montana’s marijuana market (as an employee),” said J.D. “Pepper” Petersen, a dispensary owner and president of the Montana Cannabis Guild, a key organization in the legalization push. “That’s not the intent of the legislation.”

House Bill 701 creates a marijuana worker permitting process under which both current medical marijuana dispensary employees and future recreational employees need to apply. The existing statute stipulates that those who hold marijuana worker permits must notify the Department of Revenue of a felony conviction, a marijuana law violation in another jurisdiction, or a citation for selling alcohol or tobacco to a minor within 10 days, but says nothing about those offenses necessarily being grounds for suspension or denial of a worker permit, nor does it expand those grounds to include any criminal offense.

Both the language in the draft rule and in the law allow for an appeals process for workers and other licensees.

The possible changes seem to fly in the face of several key tenets of the legalization effort and of HB701, Petersen and others said — namely restorative justice for those previously convicted on marijuana charges and economic benefit. HB701 presumes that those with convictions covered under the act are eligible for resentencing or expungement, depending on the original charge, unless a county attorney proves otherwise.

“It seems irrational that a person who has committed a violent crime or fraud can work in the industry as long as the crime was not within the past three years, but if a person was caught with a joint in Iowa ten years ago, they can never work in the Montana industry,” said Kate Cholewa, a lobbyist with the Montana Cannabis Industry Association, after reviewing the unofficial draft rule. “It’s also counter-intuitive that in implementing a law that allows for expungement of marijuana offenses, the state would also choose to force someone out of their job if they didn’t have the resources or support or time to get it done before the law goes into effect.”

Kristan Barbour, the DOR Cannabis Control Division Administrator, could not be reached for comment Tuesday afternoon.

HB701 is set to go into effect on January 1 of next year, at which time the recreational market will open. Meanwhile, the law tasks the Department of Revenue’s cannabis control division with drafting rules to implement the program, essentially filling in the policy blanks where instructed by the Legislature.

DOR initially set out to release all of the rules in one batch, but has since chosen to drop them in chunks after feedback from the industry, which hasn’t shied away from contesting rulemaking it doesn’t like. Other than an initial (highly divisive) rule concerning advertising in August, the Department has released three packages, all in October, and mostly, by the standards of marijuana policy, uncontroversial.

In this draft rule, DOR, which has the authority to punish licensees who violate the law, wrote that the rule “is proposed and necessary as guidance to the department’s implementation” of the section of HB701 concerning marijuana employee worker permits.

Under HB701, the Legislature’s Economic Affairs Interim Committee has review authority over the rulemaking. The committee, set to meet next on November 17, has yet to consider this draft rule. However, Rep. Katie Sullivan, D-Missoula, who sits on the bipartisan committee, said a copy of the draft was shared with her, and that she found the language overbroad and counter to the objectives of the bill.

“I do feel like there’s a lot going into the rules that’s kind of new,” Sullivan said. “We definitely have to be really careful and read everything.”