'IT'S A LITTLE WILD OUT THERE NOW'

Gov. Brian Schweitzer is confident there will be changes to Montana's
medical marijuana law, that Montana's agreement with British Columbia
over mining in the Canadian Flathead will produce the expected
results and that the state will endure its fiscal challenges.

Those were just a few of the topics Schweitzer covered in a visit
with the Inter Lake editorial board Thursday. On his way back from
meeting with British Columbia Premier Gordon Campbell in Vancouver,
Schweitzer was in the Flathead to promote the upcoming Western
Governors' Association conference in Whitefish.

Schweitzer said he came away from the meeting optimistic that the
Memorandum of Understanding with the province will be implemented in
coming months.

He said the agreement, which bans mining and oil and gas development
in the North Fork Flathead drainage on both sides of the border, has
already been "98 percent" settled.

One issue that has yet to be settled is compensation for Cline Mining
Corp. and Max Minerals, two Canadian companies with claims in the
Canadian Flathead.

He said it has been determined that the companies will receive
compensation for "sunk costs" that have already been incurred in
their exploration activities, rather than the loss of future
revenues. The high-end estimate for compensation is about $17
million, Schweitzer said.

There was a far greater sacrifice for the provincial
government.

"British Columbia is walking away from $5 million to $7 billion in
royalties and taxes" as a result of the ban, Schweitzer said.

The June 27-29 Western Governors' conference at the Whitefish Middle
School Performing Arts Center will be a significant event that is
expected to attract at least 500 people, Schweitzer said.

"This is going to be an opportunity to showcase the Flathead Valley,"
he said.

In addition to governors from western states and their support staff,
the event will be attended by Obama administration officials and
experts on a variety of interstate issues. A keynote speaker at the
event will be Los Angeles Lakers coach Phil Jackson, a part-time
Flathead resident.

"We'll be talking about wildlife, water, energy and jobs," Schweitzer
said.

Energy transmission infrastructure will be a big issue of particular
interest to Schweitzer, who has been pursuing the development of a
pipeline through Montana from Alberta, Canada.

Schweitzer has been negotiating with the TransCanada energy company
to provide a pipeline "on-ramp" for Montana and North Dakota oil producers.

"That's important to us," he said.

Schweitzer mentioned another Canadian-related issue: his efforts to
get federal approval for the re-import of lower-cost prescription
drugs from Canada to Montana.

"We think we could save about $600 million in Montana if we could buy
this medicine in Montana at British Columbia prices," he said.

But he has encountered considerable resistance at the federal
level.

Regarding Montana's medical marijuana law and the rapid proliferation
of card-carriers permitted to possess or grow marijuana, Schweitzer
predicted the law will either be repealed or significantly revised.
There are currently 16,255 registered patients and 3,438
"caregivers" who can supply patients with marijuana.

Flathead County has 2,132 patients, the third highest among Montana
counties, and 520 caregivers, the highest for any county in Montana.

"We have a system that allows people who want marijuana to smoke
marijuana, not people who need marijuana," he said. "We didn't have
the rules in place, so it's a little wild out there now."

This week, a Billngs-based group launched a campaign to repeal the
law that was enacted by 62 percent of voters in 2004. That aside,
Schweitzer said everything from proposals to repeal to legalizing
marijuana will come up in the next legislative session.

"We gotta tighten this thing up, that's for sure," he
said.

Schweitzer expressed optimism about the state's fiscal outlook,
despite a recent legislative fiscal analyst's report that the state
will be faced with a deficit. Schweitzer said it is difficult to know
just how big it will be when the Legislature convenes.

"Right now, unlike 48 other states, we have money in the bank," he
said.

Schweitzer concedes the state will be faced with a tight fiscal
situation that will require tough decisions.

Over the last year, Schweitzer has implemented a series of
cost-cutting measures, such as deferring the scheduled replacement of
computers for some state agencies.

"We've managed to run the business for less money than [the
Legislature] anticipated, and I like that," he said.