Montana Cannabis Industry Association following up on lawsuit to invalidate new rules

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BOZEMAN, Montana — In Misty Carey's dispensary, she has cookies and brownies. She has hard candies and suckers. She offers lotions and salves. There are capsules and peanut butter cups.

All have one ingredient in common: marijuana.

"I make great stuff," said Carey, owner of KannaKare Health Services in Bozeman.

Carey is one of several medical marijuana providers in Gallatin County, which has the most registered medical marijuana providers and cardholders in the state.

Since the Montana Legislature passed a bill in 2011 that eliminated a vast majority of cardholders and providers in the state, those in the medical marijuana industry say businesses are healthier and are trying to rebrand as a "cottage industry."

"We want to be seen as tax-paying business owners," Carey said.

In 2004, nearly 62 percent of Montana voters passed the Montana Medical Marijuana Act, which allowed for controlled production and use of medical marijuana.

During the 2011 Legislature, however, Senate Bill 423 was passed, repealing the citizens' initiative and enacting a more stringent medical marijuana law that banned the sale of marijuana for profit, among other provisions.

The Montana Cannabis Industry Association, represented by Bozeman attorney James Goetz, followed quickly with a lawsuit, asking a judge to invalidate the law.

District Court Judge James Reynolds of Helena temporarily blocked some of the law's most restrictive provisions and struck down portions of the law.

However, the Montana Supreme Court overturned Reynolds' decision and the case was remanded back to Reynolds.

Both sides of the lawsuit have filed motions for summary judgment and are awaiting Reynolds' decision.

While the law continues to hang in limbo, Gallatin County continues to lead the state for both the number of registered providers and the number of registered cardholders for medical marijuana.

According to data compiled by the Montana Department of Health and Human Services, Gallatin County had 1,711 cardholders as of Aug. 5. Flathead County follows with 1,072 and Missoula County had the third-highest amount with 861.

As for providers, Gallatin County leads the pack with 86, followed by Flathead County with 48, Missoula County with 44 and Yellowstone County with 28.

"The competition in Gallatin County is really steep," Carey told the Bozeman Daily Chronicle (http://bit.ly/1pEnght). "There are a lot of top-notch providers."

Since SB 423 was signed, the number of cardholders has plummeted statewide by 77 percent from 31,522 in May 2011 to 7,099 at the same time two years later.

However, cardholders have increased slightly since 2013, growing 26 percent to 8,956 as of August of this year.

The amount of statewide registered providers fell even more drastically, dropping 92 percent from 4,650 in 2011 to 355 as of August.

The average age of cardholders in the state is 47. And about 46 percent are older than 50.

Since the crackdown, Carey described the industry as healthier and one with more serious business owners. Providers who weren't serious about helping people have been run out of the business, she said.

"There were some people who were unsavory who screwed all of us," Carey said. "People who are in the industry (now) are the people who are serious about it. .It's a hard way to make money."

Mort Reid, president of the Montana Cannabis Information Association, credited federal raids of dispensaries in 2011 to cutting back on the number of providers.

"The industry is much reformed over what it was back then," Reid said. "A lot of the providers are just not willing to undergo the same risks with what they saw in 2011."

For the 2015 session of the Montana Legislature, the Montana Cannabis Information Association has a number of proposed changes to SB 423, which the organization thinks will help both strengthen the laws and the industry.

Draft proposals include:

—Not limiting the number of registered cardholders per provider.

—Designating the Montana Department of Public Health and Human Services as the oversight agency.

—Increasing provider application fees to cover the cost of facility inspections.

—Not banning advertising.

—Allowing providers to hire employees.

—Allowing testing laboratories.

—Adding post-traumatic stress disorder and epilepsy to the list of qualifying illnesses for cardholders.

—Allowing providers to grow four plants per cardholder plus 12 seedlings, and allowing cardholders to be able to grow up to four plants and 12 seedlings for themselves.

"We want stricter rules. We want stricter guidelines. We want oversight," Carey said.

Republican state Sen. Jeff Essmann, who is running for re-election this year for his Billings seat, was the primary sponsor of SB 423 in 2011. He said while Montanans voted for medical marijuana, they weren't voting for "full-blown recreation advertising" of marijuana in Montana.

"When I campaigned in 2010, I had thousands of my constituents tell me, 'I voted for it, but I didn't vote for this,'" Essmann said.

So the goal of SB 423 was to "try to return it to a small program helping truly ill individuals," Essmann said.

Looking at the industry today, one that has ever so slightly rebounded since last year, Essmann said he is less concerned with the total number of cardholders and providers in the state and more so with the process of issuing cards.

"I can see making some changes to the law, but there needs to be a tight system for review of physician practices," Essmann said.

But plans for next year's legislative session could be moot if Reynolds makes a decision in the industry's court case.

"Right now, the fate of the industry hinges on a court decision," Reid said.


Information from: Bozeman Daily Chronicle, http://www.bozemandailychronicle.com

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