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KEEPING THE POT BUSINESS ON ICE?: Why Some Oregon Cities are Opting-Out of Cannabis

Wade into the political marijuana fields of Oregon, and you’ll find a medley of differing local regulations, resulting in both acceptance and prohibition of recreational pot. Last November’s election did, however, expand the right to get high “for the fun of it.” Twenty additional cities or counties voted to allow for the first time the sale of recreational pot within their jurisdictions.

This jurisdictional patchwork is the result of Oregon’s 2014 measure that legalized recreational marijuana. That November, Oregon voters’ approved Measure 91, a statewide initiative otherwise known as the “Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act.” The act legalized cannabis for recreational purposes, and opened the door for cities and counties to tax and regulate its sale. From the start, scores of cities and municipalities participated in the development of the marijuana industry, especially west of the Cascades. Revenues from the sale of pot quickly followed. Despite that, plenty of local governments opted out, unwilling to allow the industry to develop within their legal boundaries.

Measure 91 contained opt-out provisions, too. East of the Cascades, dozens of local governments, led by city councils or county commissions, opted out of allowing cannabis businesses to set up shop. Their reasons followed the typical concerns—pot as a “gateway drug,” pot as addictive, pot as a threat to the social order.

But Measure 91 contained a couple other provisos, as well, which might be summarized as such: Measure 91 allowed local jurisdictions to opt out of marijuana activity by administrative “decree” if the city or county had voted 55 percent or more against Measure 91. However, if the local jurisdiction had voted below 55 percent margin for Measure 91, any opt-out ordinance passed by the city or county would stand only if approved by the vote of the jurisdiction’s local residents. Enter November 2016’s vote.

Scores of marijuana questions were placed in front of city and county voters. More than 100 communities had to decide on issues related to taxation. Others dealt with zoning laws, including the “time, place and manner” of marijuana business activity.

Voters in plenty of cities and counties kept the pot business on ice, refusing to budge from their outright ban on the recreational sale of cannabis. But not all. Voters in twenty communities said yes to the sale of recreational pot, including Albany, Cannon Beach, Coos Bay, Gervais, Gladstone, Grants Pass, Hubbard, La Pine, Lebanon, Madras, Manzanita, Medford, Myrtle Point, Oregon City, Scappoose and Sweet Home.

Most tax measures passed easily, which means that recreational pot will be taxed up to three percent at the local level in addition to the 17 percent tax collected by the Oregon Department of Revenue. According to statistics reported by The Oregonian on November 9, the state had collected $40.2 million in recreational cannabis tax revenue through September 2016. Incentive enough, some Oregonians think, to tax pot in order to better fund cash-hungry local governments.

Take the City of Hines, for instance. There, City Administrator Judy Erwin says that “the city council is optimistic about the revenues that might flow into the city due to recreational sales.”

Other jurisdictions are a little more tentative. The city administrator of Brownsville, Scott McDowell, expects tax revenue to “initially be negligible. It’ll take time,” he says, before new cannabis businesses will have an effect on tax collections that might be returned to Brownsville.

That said, has November’s election really altered Oregon law? Not in a massive way.

Mark Pettinger is spokesperson for the Oregon Liquor Control Commission (OLCC). While Pettinger acknowledges the addition of 20 new local jurisdictions willing to allow cannabis business participation, he also points out that five additional cities or counties have recently opted out. “The process we have in this state take time,” Pettinger says. There won’t be a real surge in new cannabis business activity due to the election, he adds. New activity “isn’t going to hit us all at once, not like it did after the 2014 election. The OLCC is capable of handling” new business applicants.

Says Pettinger, “Oregon has been methodical and thoughtful in its approach to legalized cannabis. We’ve had an eye toward the build-out of the industry, sustaining it over time through regulation.”

And while some cities and counties remain “dry,” Oregonians possessing small amounts of pot can still drive into prohibitionist cities and counties without the worry of arrest. Possession of up to eight ounces of “dry” weed is still legal. What remains murky for the average Oregonian is the “where” of buying and selling. Prohibition is the law in some localities, especially in many of the more rural and less populated portions of the state. But there are plenty of “wet” communities too.

Says Pettinger, “Oregon has been methodical and thoughtful in its approach to legalized cannabis. We’ve had an eye toward the build-out of the industry, sustaining it over time through regulation.”

The green rush has slowed in Oregon, but it hasn’t stopped. “The process takes time,” Pettinger continues. “We still have our eye on the future.”


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