Six months before adult-use marijuana market opens, supply worries loom
Providers say Montana’s medical marijuana market is booming, and that demand will only increase when it’s legal to purchase recreational cannabis come January. Dispensaries are scrambling to get ready.
by Justin Franz
Montana Free Press
A few times a day, someone from out of town will walk into one of Paulson Palmer’s three dispensaries in northwest Montana asking if they can buy marijuana. The answer is almost always no.
While Palmer’s Fruit Factory can sell cannabis to
Montana residents with a medical marijuana card, it will not be legal to sell it for non-medical adult use until Jan. 1, 2022 — a message that might not be clear to out-of-state tourists who may have heard that weed has been legalized in Big Sky Country but haven’t closely followed the new law.
For adult-use marijuana advocates, the fact that customers are already trying to buy is a sign that their forecast of legalized cannabis becoming a multi-million-dollar
industry in the state was correct. But pent-up demand also brings up another concern: Will Montana’s dispensaries be able to meet that demand come January?
“I think we’re going to run out of weed in less than a week,” said Pepper Petersen, president and CEO of the Montana Cannabis Guild. “That’s what happened everywhere else when the recreational market opened up.
We’re barely keeping up with demand [for medical
marijuana] right now.”
Within days of recreational cannabis becoming legal in Illinois last year, some dispensaries in Chicago ran out of product and shortages persisted for weeks and months.
The same thing happened in New York and New Jersey this year.
According to a 2020 study from the University of
Montana’s Bureau of Business and Economic Research, Montana adults consume between 30 and 33 metric tons
of cannabis annually for medical and recreational purposes (even while recreational use remained illegal). During fiscal year 2020, medical marijuana users consumed about 12 metric tons of cannabis. Petersen and others involved in
the industry estimate that the adult-use cannabis market will be three to five times bigger than the current medical market once it opens up next year.
The UM study said legal cannabis will also draw tourists to Montana, as it has in other states. According to a 2019 study from the Colorado Tourism Office, 6% of tourists said legal marijuana was one of the main reasons for their visit, and 15% of all tourists visited at least one dispensary.
The UM study estimates similar numbers will be seen in Montana.
But cannabis can’t be grown overnight, and there are limits to how much a dispensary can grow. Producers can grow only a specific amount of cannabis at a time based
on a tiered system, according to Montana Code Annotated.
A tier 1 producer can grow up to 1,000 square feet of product, and a tier 9 producer can grow up to 20,000 square feet across as many as six locations. Only a few producers in the state are growing at that level, Petersen said.
Besides the legal limits, there are also financial limits. Growing that much cannabis is capital intensive, and not everyone has the resources to ramp up production to the legal maximum. Because cannabis is still illegal at the
federal level, it’s nearly impossible for producers to get traditional financing, since banks are hesitant to work
with dispensaries because of the federal prohibition. The federal ban also prohibits dispensaries from importing
cannabis across state lines, even from states where
marijuana is legal.
Shortages could persist for a while. House Bill 701, the legislation that set the framework for the recreational
market, gave existing producers an 18-month head start on everyone else, meaning new adult-use producers won’t be able to get into the market until July 2023.
Michaela Schager, owner of Montana Medicinals in
Missoula, said she is doing everything she can to ramp up cultivation in the months before the adult-use market opens. She said it takes a minimum of seven to nine weeks for a cannabis plant to fully flower, and she worries there won’t be enough.
“I think we’ll see some disruption in the market in
January and February, and it will probably take a few months for everything to mellow out,” she said.
Schager said the recreational market will create a “completely different landscape” for her and other
established medical providers. Perhaps the biggest change will be a transition from a vertical market — where
dispensaries had to cultivate, produce and sell all their own
products — to a horizontal market where businesses can sell wholesale to each other and focus on specific market
niches. The state Department of Revenue — which is
managing the adult-use market and taking over the medical system starting July 2 — will be issuing five different types of licenses to producers, including for cultivation,
manufacture (of edibles and other marijuana products), sale, laboratory testing and transport. It will be possible
for a single company to hold multiple types of licenses.
Montana Medicinals will be applying for a number of different licenses initially, but Schager said she hopes her business can focus on one or two different products while sourcing other types of marijuana products from other
dispensaries. She said Montana Medicinals currently
specializes in edibles, and she wants to continue that focus.
Palmer, who runs Fruit Factory locations in Columbia Falls, Evergreen and Libby, echoed the hope that
dispensaries will start to work together more.
“I think dispensaries will really start to focus on the products they’re best at,” he said.
Supply shortages may be just one of a number of
challenges that lay ahead for the state’s cannabis industry. In the coming months, the Department of Revenue will be drafting administrative rules, and Schager said many
details remain to be worked out. For example, Schager
said it’s still not clear what exactly will be allowed on
recreational marijuana packaging (House Bill 701 said it must include a white label with a logo, the name of the product and its THC content, and House Bill 249 requires that packaging not be attractive to children). Until the
Department of Revenue offers more guidance, she’s holding off on designing and purchasing packaging materials.
Kristan Barbour, the Cannabis Control Division
Administrator for the Department of Revenue, said the agency anticipates starting the rulemaking process in the coming weeks and will hold administrative hearings on advertising and other issues in August and October.
Barbour encouraged the public to visit
MTRevenue.gov/Cannabis to sign up for updates
on the process.
Schager and other providers will be watching it closely.
“This is going to be a totally different ball game,” she said. “There’s a ton of excitement in the community right now, but I’d say most providers are pretty stressed.”
Courtesy of montanafreepress.org.
Montana Free Press is an independent,
501(c)(3) nonprofit source for in-depth
Montana news, information, and analysis.
FWP ADDS FEATURES
TO NEW ONLINE HUNT PLANNER MAP
Old Hunt Planner to be discontinued.
HELENA – Staff at Montana Fish, Wildlife & Parks have added new features to FWP’s online Hunt
Planner map, a free interactive mapping website for researching hunting opportunities in the state. These new features will become available starting July 7.
The new Hunt Planner, which became available
to the public last year, uses current technology to provide hunters with a better map experience. It
now has all the tools and data layers of the old Hunt Planner and more, with better performance and
compatibility with mobile devices.
In a time when most traffic to FWP’s website comes from mobile devices, FWP staff created the new Hunt Planner to replace the old Hunt Planner, which was built more than 10 years ago with
technology that isn’t mobile friendly.
Due to this, the old hunt planner will be
discontinued on July 7.
Updates to the new Hunt Planner include:
– A cleaner user interface
– A harvest opportunity tool, rather than
individual data layers, to display opportunities
for species, hunter type and season options
– A lookup tool to view where your hunting
license or permit is valid
– A feature to find your location on the map
– Improved help tools and links to other FWP
resources
Other features of the Hunt Planner include:
– Customizable map layers, including harvest
opportunities for huntable species, land ownership, Block Management and other options
– Links to hunting regulations
– Export and print a geo-referenced PDF map
– Create a GPX file to upload to your GPS device
– Drawing tools
– Coordinates of cursor location
The Hunt Planner can be found at:
fwp.mt.gov/gis/maps/huntPlanner
Updated tools and functionality will be available starting July 7. Several resources are available in the Hunt Planner map to help new users become familiar with it, including video tutorials and answers to
frequently asked questions.
FWP is the official source of hunting information in Montana. That information can change quickly, and the Hunt Planner contains the most current
updates on hunting regulations, hunting district boundaries, restricted areas, access program
updates and other information critical to planning your hunt. Third-party mapping applications, while helpful in many aspects, may not provide the most current hunting information.
Submitted by Montana FWP