Cannabis companies will continue to be barred from securing business licenses in Missoula after the City Council approved a one-year extension of its moratorium on new dispensaries Monday, with an exception that allows companies to move locations. 

The council unanimously approved the one-year moratorium, which aligns with with an existing statewide freeze on new business licenses. The city has barred new dispensary licenses since July 2024. Unlike the previous moratorium, the city will now allow dispensaries to move locations under an existing license.

City staff told the council the extension is aimed at lowering the prevalence of cannabis in the city, which has more than 50 dispensaries. Councilors have previously raised concerns around the effects of cannabis use among Missoula's youth.  

"Staff see this as a practical adjustment that maintains the direction of limiting how many dispensaries are licensed in the (industry) growth, but also avoids unintended consequences for existing licensed businesses," said city permit coordinator manager Maggie McCarthy.

While the number of dispensaries in Missoula has remained static since the moratorium was enacted in 2024, other Montana cities like Bozeman have seen an increase in cannabis stores, the Missoulian reported. 

The state of Montana has enacted a moratorium for new dispensary licenses through July 2027.

McCarthy said the moratorium extension could give the city time to adjust zoning regulations in its Unified Development Code to help spread out dispensaries. The UDC currently requires dispensaries be 1,000 feet apart and 250 feet away from residential districts.

Ward 3 Councilor Gwen Jones, who first spearheaded the moratorium in 2024, said the city is moving in the right direction by trying to limit dispensaries in an effort to mitigate the impact of cannabis use on young people in the city. 

Studies have shown youth cannabis use in Missoula County has increased over the last five years. 

"Cannabis was voted in by this county, people want it, that is fine, but we are also in the stratosphere in terms of how many stores we have, and I hoping to see that gradually come down," Jones said.  

Jones previously invited Missoula healthcare leaders to the council in 2024, who said the increase in dispensaries has led to more youth hospitalizations and medical conditions like anxiety or schizophrenia. 

Ward 6 Councilor Sean McCoy said the cannabis industry should be regulated by the city with the goal of protecting public health and safety, but argued other industries like gambling and alcohol do not get the same treatment. 

"It sets up a bit of a double standard and the continued demonization of an industry that does not necessarily deserve it perhaps," McCoy, who voted for the moratorium, said. "And so I think it is important to keep a broad picture of how we regulate industry and people's ability to run that industry."

The council will meet on Wednesday, July 9, to discuss updates to the Unified Development Code. 

Griffen Smith is the local government reporter for the Missoulian.