Missoula businesses will likely take hit if medical pot bill becomes law

2011-05-04T22:33:00Z 2011-05-05T07:46:18Z Missoula businesses will likely take hit if medical pot bill becomes lawBy GWEN FLORIO of the Missoulian missoulian.com
May 04, 2011 10:33 pm  • 

Come July 1, large swaths of Missoula could look very different.

Think Brooks Street. The western edge of downtown. Parts of Reserve Street, too.

They're host to many of the licensed medical marijuana businesses that would have to close in eight weeks if Gov. Brian Schweitzer, as promised, "holds my nose" and allows a bill to severely curtail the industry to become law without his signature.

Medical marijuana proponents are marshalling forces to keep that from happening, urging Schweitzer to veto the bill and maintain the status quo. They've scheduled a "silent protest" Thursday at an appearance by Schweitzer in Whitefish.

They're also threatening to sue the state to keep the law from going into effect and mounting a voter referendum effort that would suspend the law.

Whatever happens, Missoula will likely be the most visibly - and economically - affected community in Montana.

Consider: Los Angeles, a city of 3.8 million people, is limiting the number of medical marijuana dispensaries to 100. The Garden City, with just under 70,000 people, has 75 licensed medical marijuana-related businesses.

Parts of Brooks Street have one in every block, including one in a coffee shop and one with a drive-through. Billboards shout dispensaries' services. Marijuana plants stretch leafy fronds in some store displays.

"But on July 1," said Tom Charlton, "it's pull and burn."

***

Charlton is a licensed caregiver for about 80 patients at M4U, a dispensary in the North Reserve Business Park, home to a handful of marijuana businesses sandwiched among others that include a church, a veterinarian, a fitness center and a DirectTV office. Charlton owns his office and said he'll simply sell it if the new legislation goes into effect.

Kevin Kerr and Bryan Spellman don't have that option. They rent space for their Montana Cannabis & Hemp Foundation at the southwest corner of Broadway and Orange Street, and until last week had been planning to expand into the other half of the building, which is vacant.

The two took out loans to start their business, which like M4U is a combined caregiver and off-site grow operation, serving 300 patients. If they have to shut down in July, they'll end up declaring bankruptcy, and either destroying their plants or giving them to patients, Spellman said.

The two estimated they pay NorthWestern Energy $3,500 a month for the lights that sustain their grow operation, and that their payroll for about a dozen people is $12,000 to $15,000 a month.

Under the bill approved by the Legislature, each provider could only grow marijuana for three people, including the provider. Cardholders can grow marijuana for themselves or obtain it free from a provider.

In an interview with the Missoulian on Monday, Schweitzer suggested that people who lack the skill to grow marijuana or live in places where growing is either forbidden or impractical, could turn to someone who could "sell you or rent you a grow box and will take care of it."

"It'll be completely legal," the governor added. "They will not be supplying you with anything but expertise."

Missoula County Attorney Fred Van Valkenburg said he'd need to review the bill again, but that on the face of things, Schweitzer is probably mistaken.

The legislation also prohibits advertising, including online. Goodbye, billboards.

The Missoula Independent reaped an advertising bonus as medical marijuana businesses multiplied throughout Missoula, to the tune of nearly 10 percent of its revenue, said owner Matt Gibson.

Lacking that, he said, "we're really just going back to business as usual. ... We're also hoping that, as those ads disappear, some of those other advertisers who might've had objections will come back to the paper."

Charlton said he's one of the lucky ones. He works alone, and advertises largely by word of month. If the bill becomes law July 1, he said, he'll just go back to working as an electrical contractor.

But as to the overall industry, he said, "it's a tremendous economic hit that we're taking."

***

Missoula's economy, however, could probably endure the near-total shutdown of the medical marijuana business without serious damage, said Patrick Barkey, who heads the Bureau of Business and Economic Research at the University of Montana.

"It's trivial compared to Smurfit," he said, referring to the 2009 shutdown of the Smurfit-Stone Container Corp. in Frenchtown that put 417 people earning an average of $70,000 a year out of work.

Montana suffers most when it loses businesses that bring in money from out of state, said Barkey.

In the most general of terms, he said, the loss of the medical marijuana business would be more akin to that of Macy's.

"Because now we don't spend at Macy's, we have money to spend someplace else," he said.

Don Sokoloski of Properties 2000, likewise knocked down fears of a bigger bust in the retail rental market.

"It certainly did make the phone ring," Sokoloski said of the boom that occurred after the U.S. Justice Department announced in late 2009 it would no longer focus enforcement on medical marijuana users. "It just seemed like it was the only business that was even alive in the last couple of years."

But it wasn't a particularly lucrative business for landlords, he said.

"We're going to have quite a few vacant retail spaces again, but quite honestly most of them weren't paying enough to make a real economic dent on anything," he said.

Reporter Gwen Florio can be reached at 523-5268, gwen.florio

@missoulian.com or on CopsAndCourts.com.

 

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