Kalispell Considers Marijuana Dispensary Zoning Options

Recreational dispensaries can begin operating in early 2022 within city limits; officials update proposed ADU ordinance and propose potential ARPA funding allocations

By Maggie Dresser
The leaves of a young marijuana plant at Tamarack Dispensary, a purveyor of medical cannabis in Kalispell on May 14, 2021. Hunter D’Antuono | Flathead Beacon

For the first time since the regulations and taxes on recreational marijuana were solidified this past legislative session, Kalispell officials brainstormed ways to address marijuana business zoning within city limits at their June 28 work session.

Since Gov. Greg Gianforte signed the “Montana Marijuana Regulation and Taxation Act,” or House Bill 701, on May 18, the Department of Revenue will begin accepting license applications on or before Jan. 1 and Kalispell will likely see licensed providers intending to open businesses as early as Jan. 31 of next year.

Medical marijuana dispensaries, cultivation and processing are not currently permitted within Kalispell’s city limits. However, recreational marijuana will be permitted in 2022 unless residents petition and collect enough signatures to hold an election prohibiting marijuana businesses.

Officials discussed the different zoning approaches the city could take, which include similar requirements as liquor stores, pharmacies and casinos.

If dispensaries are classified under liquor store and pharmacy requirements, they would be permitted in all business and healthcare zones. Under casino requirements, they would be limited to certain zones and must be a certain distance away from places of worship, schools, parks, residential zones, highways and other casinos.

Other options include creating separate zoning requirements between dispensaries, cultivation and processing.

City Attorney Charles Harball suggested zoning dispensaries within the same parameters as a liquor store.

“The safe harbor would be to treat it as you would (for) liquor,” Harball said.

Some councilors feared if the zoning ordinance is too restrictive, it would concentrate marijuana businesses in certain areas instead of spreading them evenly throughout the city.

“I hear this from a lot of people that they do not like the green mile down in Evergreen,” Councilor Chad Graham said. “All the signage and stuff is packed into that one area … It constricts that use in certain areas.”

The bill also states that if the excise tax is imposed by the county, 50% of the resulting tax revenue must be retained by the county and 45% must be apportioned evenly to the municipalities based on population ratio. The remaining 5% is retained and deposited into the state special revenue account.

Additionally, officials updated the proposed accessory dwelling unit (ADU) ordinance, which would allow property owners to build mother-in-law units on their properties in certain zones. Updates were added following previous work sessions, which include a new administrative conditional use requirement in certain zones, requiring two off-street parking spaces per unit and limiting gross floor area to 1,000 square feet.

The proposed ordinance will be an agenda item at a future council meeting.

The city is also looking to allocate potential American Rescue Plan Act (ARPA) funds for proposed sewer, water, wastewater treatment plant and storm water projects, which have an estimated cost of $16 million.

Funding for the proposed projects could include Local Fiscal Recovery Funds, a Minimum Allocation Grant, and a competitive grant, all of which must be obligated by Dec. 31, 2024 and spent by Dec. 31, 2026. Grant application deadlines are July 15, 2021.

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