History

Montana’s first medical marijuana initiative passed in November 2004. The program was quiet until 2009-10 when the convergence of several events created exponential growth in the program and program market. These events include the appearance of “traveling clinics” in Montana and the “Ogden Memo” issued from the office of then U.S. Attorney General Eric Holder. The Ogden Memo stated the federal government would not interfere with state medical marijuana programs.

This exponential growth combined with a “thin” statute which was inadequate to support the level of market activity occurring created what was then referred to as the “wild, wild west” of medical marijuana in Montana.

This frenetic activity came to a halt with the federal raids in 2011 and the legislation passed by the 2011 state legislature, SB 423. SB 423 vertically integrated medical marijuana provision in Montana in order to assure chain of custody of marijuana and marijuana products from the registered provider to the approved medical marijuana patient and bring the program under control. Vertical integration meant the provider cultivated, manufactured, and conducted sales. There was no “contracting out” of services or moving of marijuana outside the possession of the provider until the point of sale.

Between 2011-16, the program operated under this law and model with a few provisions of the law enjoined by the court (Montana Cannabis Industry Association, MTCIA vs. State of Montana). During this time, the regulating agency, the Department of Health and Human Services (DPHHS) provided no oversight or regulation. Some followed the law. Some didn’t.

In 2016, the lawsuit was resolved in favor of the state. The law as passed in 2011 (which all but shut down access) was in effect from Aug 31, 2016 until a new medical marijuana initiative (I-182), spearheaded by the MTCIA, passed 10 weeks later in November 2016. The initiative rebooted the program as it had operated under SB 423 as enjoined by the court from 2011-16. It also required inspections and licensing and allowed for employees. It did not change the basic model but added the program’s first regulatory mechanisms that would require the most basic of oversight – inspecting and licensing. The 2016 initiative called for implementation of inspecting and licensing by June 30, 2017.  

In 2017, the MTCIA worked with the state legislature to build on the initiative. SB 333 added the requirements of tracking and testing to the law. It clarified that concentrates or “extracts” were allowable medical marijuana products. It did not change the vertically integrated model. The goal of SB 333 was not to change the program model but to make activity within the program visible so that those who had been operating outside the law for the previous 6 years (the black market hiding in the program) would have to come into compliance or leave the program.

The goals of the 2016 initiative and the 2017 legislation were transparency, safety, containment of product within the program, and functionality. However, DPHHS diverged from the goals of the initiative and legislation and implemented regulations significantly and substantively different than planned, intended, and discussed throughout the legislative process.

A brief sampling of those divergences includes:

  • Delayed implementation
  • Adopting a different licensing model
  • Allowing unlimited grow locations
  • Licensing before inspecting
  • Lack of enforcement of the law or the rules, even when violations were blatant, public, and included false claims of DPHHS approval
  • Lack of testing lab oversight
  • Overall rewarding non-compliance and penalizing compliance

As a result, the goals of the initiative and legislation – transparency, safety, containment, and functionality – were not met. There was a tracking system, but without the proper licensing model it didn’t provide the data points necessary to manage and measure production and safeguard against diversion. There was mandated testing, but no assurances the testing was legitimate.

The successful 2019 legislation, SB 265, aimed at remedying the consequences of these divergences. The goals remained the same. Public health and safety. Fair competition. Clear lines between the black market and the program market. SB 265 closed loopholes, clarified conflicts of interest, and put in statute provisions that had been previously left to administrative rules.

Each state has its learning curve for regulating cannabis. The medical marijuana program in Montana is now on track, employing around 5000 Montanans, and serving those with debilitating illnesses. The regulating agency has cleaned house and is managing the learning curve. The Montana state legislature has been active and effective passing laws in a bipartisan fashion to make the medical marijuana program in Montana safe, transparent, contained, and functional. As with all states, the road has had its bumps, but we are proud of the Montana regulatory model which aims at goals and values utilizing the regulatory mechanisms increasingly available as legal cannabis access continues to take shape in America.