Staff is providing an update following the July 6, 2021, work session and no action is required of council at this time.

Montana voters, including those in Yellowstone County and the City of Billings, approved Initiative Measure 190 (IM-190) which permitted recreational adult-use marijuana in the state. The IM-190 initiative, as amended by the legislature in House Bill 701, was signed into law on May 18, 2021. HB 701 delayed many effective dates from the IM-190, expanded some local government regulatory options, and repealed the existing Montana Medical Marijuana Act (MMMA) and incorporated some of the MMMA provisions into the new law. Most of these changes will be effective January 1, 2022.

On July 6, 2021, during the City Council work session, Council directed staff to develop regulations for marijuana businesses while concurrently preparing a resolution to refer the ballot question to the Yellowstone County Election Administrator. Staff has created a committee consisting of 5 council members and several staff to consider both regulations as well as referring the matter to a vote of the electors of Billings.  Given the upcoming deadline to submit ballot language to the election office, the committee has prioritized the ballot issue over developing regulations at this time.    

Staff also met with the County Attorney's office to discuss the ballot issue and learned Yellowstone County is preparing to submit the question of whether to prohibit marijuana businesses to the voters.  However, County Commissioners have not formally voted to do so and that vote will take place on August 3. If Yellowstone County submits the issue of whether to prohibit marijuana businesses to the voters, staff does not believe it would be appropriate to submit an additional question to voters at this time. The ballot question posed by the county may dispose of the City's ballot question if the voters decide to prohibit marijuana businesses. On the other hand, if voters continue to allow recreational marijuana, the City may conduct an election at a later date to ask the specific question about recreational adult-use marijuana businesses.    

Staff continues to work with the County Attorney's office to coordinate these efforts. If Yellowstone County decides not to submit the ballot question to the voters, City Council can submit its own question to the voters of the City of Billings by resolution at its August 9, 2021, Regular Business Meeting.

No immediate action is required at this time, so no alternatives were analyzed.

House Bill 701 provides for a local-option marijuana excise tax not to exceed 3% on the retail value of all marijuana and marijuana products sold at an adult-use dispensary or a medical marijuana dispensary within a county. Imposition of any local excise tax requires an election at the county level. Unless or until such an election is held, there is no revenue impact to the City from the sale of marijuana and marijuana products.

City Council has until August 9, 2021, to refer a ballot question to the Election Administrator. If Yellowstone County submits a ballot question to the voters whether to allow or prohibit marijuana businesses, it isn't necessary for City Council to also submit a ballot question to the voters.  If the voters decide to allow marijuana businesses following the November 2, 2021, election, City Council may later submit a ballot question to the voters to reconsider specific marijuana businesses.