State regulators have settled on the maximum amount of space on which medical marijuana providers can grow, which was a point of contention in rule-making efforts earlier this year.
Earlier this month, the Montana Department of Public Health and Human Services set the grow space at 30 square feet per registered patient served as part of a final set of rules for the program.
The health department has taken in a lot of comment about the so-called canopy limits in 2018 as it has sought to firm up rules for the state's reformed medical marijuana program.
Though the final figure means less space than previously pitched, concerns of overproduction still exist.
“Thirty square feet, while it may be better than 50 square feet, is an enormous allotment," said Kate Cholewa, a lobbyist for the Montana Cannabis Industry Association. "The providers in our organization tend to need somewhere between three and 10 (square feet per patient).”
Early in the year, health officials set the limit to 50 square feet for each patient. Then they suggested a system of 20 different canopy levels depending on how many patients a provider serves.
The final figure of 30 square feet is something of a compromise.
"The department believes 30 square feet per patient is a prudent canopy size between the existing 50 square-foot amount and other proposed size allocations," according to a health department notice on the rules.
That's an issue for Cholewa, who said that the allotted amount of grow space should more closely resemble the market demand.
“There's a formula for how much cannabis we need to produce within the medical program to supply registered patients,” she said.
Overproduction is an issue for states that allow the medical use of marijuana as well as recreational. In Washington state, where recreational use is legal, a flood of marijuana into the market has driven down prices and is squeezing small producers.
Unlike the recreational markets, Montana marijuana producers serve people who sign up for the program with a qualifying medical condition. But they have similar market demands, and some worry that patients will flock to bigger producers whose margins allow them to undercut smaller businesses.
“What we’re afraid of is the the larger growers who can afford that are going to grow in excess and have a surplus and drop the prices,” said Carlo Giaquinto, a provider whose business is outside of Roundup.
Giaquinto said that the limit of 30 square feet per patient doesn't affect his daily operation. But under that model, he said he needs only about 14 percent of his allotted grow space.
The new program also comes with new costs, including much higher licensing fees, marijuana lab testing fees and a tax. All that also strains the smaller outfits, said William Reid, a provider in Roberts.
“The overhead is almost impossible, unless you're a real big player in the industry," he said. "Those people are going to survive it.”
Cholewa and some lawmakers have urged regulators to separate patient count and allotted grow space. Instead, Cholewa suggested that more oversight could be achieved if providers could purchase a certain amount of grow space with the expectation that providers wouldn't buy more space than needed.
According to state data, the largest provider in the state serves between 1,201 and 1,300 patients. That provider could legally grow in a space up to 39,000 square feet under the current rule.
Montana's vendor for marijuana seed-to-sale tracking, Metrc, tracks the amount of marijuana in the system. But Cholewa argued that the current grow space allotment doesn't show how much space is actually being used.
“This is supposed to be figuring out production levels,” she said.