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Oregon House Passes Marijuana Legislation

December 17, 2015

SALEM—The Oregon House of Representatives passed HB 3400 (medical marijuana & recreational marijuana) on June 24th, and HB 2041 (tax on recreational marijuana) on June 25th. Rep. Cliff Bentz (R-Ontario) said: “Oregon’s decision to legalize marijuana will take effect July 1 st , creating significant challenges for, and major changes to, our communities. Oregon legislators spent much of the 2015 Legislative Session making the provisions of Measure 91 fit, as best they could, into a state with widely divergent views on allowing recreational use of what is still a federally illegal drug. Included in this legislation is the opportunity for communities who opposed Measure 91 to ban dispensaries and retail outlets. The Legislature also refined the tax on marijuana sales to reduce the occurrence of black market marijuana trafficking. Here is a list of some of the provisions of the bills that will become law if they pass, as is anticipated, through the Senate next week.”

HB 3400A - Changes to the Oregon Medical Marijuana Program

 Caps new marijuana growers at 48 plants outside of residential areas in city limits and 12 plants if the grow site is in a residential area in city limits. Currently: There is no limit on the size of a medical marijuana grow site, regardless of whether it is within city limits or not. The largest in Oregon is currently registered at roughly 600 plants serving entirely California residents.

 Caps current marijuana growers at 96 plants outside of residential areas in city limits and 24 plants if the grow site is in a residential area in city limits. Currently: See above, but according to OHA the majority of current grow sites are growing 24 plants or fewer.

 Requires OMMP cardholders (medical marijuana patients) to be Oregon residents. Currently: You don’t have to be an Oregon resident to have an OMMP card.

 Requires medical marijuana growers, processors and owners of dispensaries to be registered with OHA, Oregon residents for at least 2 years and be at least 21 years old. Currently: Dispensaries owners don’t have age or residency restrictions, but do have to register with OHA.

 Allows Oregon Health Authority (OHA) to only inspect grow sites of persons growing for others, not those growing for themselves. Currently: OHA rarely uses any inspection authority.

 Requires OHA to set up a tracking system for marijuana grown and transferred within the medical marijuana system. Currently: There is no requirement for OHA to be notified when a grower harvests their crop or transfers product to a medical marijuana dispensary.

 Requires all medical marijuana items sold to be tested, packaged and labeled. All packaging and labeling must be unattractive to minors. Currently: There are inconsistent standards of packaging and labeling. Also, while marijuana sold in a dispensary must be tested, the testing lab practices and reporting system is very inconsistent, causing many growers to ‘lab shop’ for a lab that shows higher THC content or no pesticides.

 Defines what reasonable regulations a city or county may implement in the land use process. Currently: There is uncertainty about what exactly are ‘reasonable regulations’.

 Requires OHA to notify law enforcement if they suspend or revoke a grower, processor or dispensary owner’s registration. Currently: OHA does not need to notify law enforcement if a disciplinary action is taken.

 City and county governing boards can opt-out of medical marijuana processing sites and medical marijuana dispensaries as long as no less than 55% of the voters in that jurisdiction voted against Measure 91. Currently: The state moratorium on siting medical dispensaries sunset May 1, 2015. The moratorium was silent on processing sites. HB 3400A - Changes to Recreational Marijuana (Measure 91)

 Requires Oregon Liquor Control Commission (OLCC) to make a rule about the maximum size of recreational marijuana grows. Currently: Measure 91 put no minimum or maximum limit on the size of recreational marijuana grows.

 Allows all households to grow four mature marijuana plants. Currently: This is the same as Measure 91.

 Requires all recreational marijuana growers, wholesalers, processors and retailers to be licensed by OLCC, Oregon residents for at least 2 years and be at least 21 years old. Currently: Measure 91 required only OLCC licensure, but no age or residency requirements for the licensee. However, Measure 91 does require all licensee employees be over 21 years of age.

 Requires OLCC to develop a seed-to-sale tracking system, tracking all marijuana grown or transferred within the recreational marijuana market, up to the point of sale. Currently: OLCC has broad authorities in Measure 91, but this requires they develop a specific tracking mechanism for transfer, transport and sale of marijuana.

 Allows OLCC to license and inspect registered medical marijuana growers who wish to sell excess marijuana into the recreational retail market. Currently: Medical growers can only sell to medical dispensaries, and Measure 91 only allowed OLCC licensees to sell to recreational retailers.

 Allows local governments to tax recreational marijuana sales up to 3 percent, but any tax needs to be approved by a vote of the people. Currently: Measure 91 only allowed the state to tax, and specifically prohibited local governments from doing the same.

 Requires all recreational marijuana items sold to be tested, packaged and labeled. All packaging and labeling must be unattractive to minors. Currently: Measure 91 has broad testing, packaging and labeling language, but the language in HB 3400 is more specific regarding all three topics.

 Reduces penalties for marijuana crimes to more closely match similar alcohol crimes. Currently: Measure 91 did not modify existing classifications of marijuana crimes.

 Allows cities and counties to adopt land use or public health and safety ordinances when regulating all recreational marijuana sites. Currently: Measure 91 states that local governments can create time, place and manner restrictions.

 City and county governing boards can opt out of recreational grow sites, processing sites, recreational wholesalers and recreational retailers so long as no less than 55% of the voters in that jurisdiction voted against Measure 91. Voters in every jurisdiction may still opt out by a vote of the people. Currently: Measure 91 had a local opt out process, but after the passage of the Measure, all local governments were opted in. HB 2041A - Changes to the Taxation of Marijuana from the Grower to the Retail Level

 Originally, Measure 91 specified a tax on the grower of marijuana, with different tax rates for flowers, leaves, and immature marijuana plants.

 Replaces grower taxes with one tax rate of 17 percent at the point of sale. Also, the measure directs the Department of Revenue to administer, collect and enforce the provisions. As a result of changing the point of taxation the price to consumers is likely to be lower benefiting from lower markup of the harvest tax and less product price impact. This impact is expected to move more marijuana buyers out of the black market and into the legal, regulated market.

 Does not change the disbursement or estimated total amount of the revenue raised by the tax:

 40% - Common School Fund

 20% - Mental Health Alcoholism and Drug Services

 15% - State Police

 10% - Cities

 10% - Counties

 5% - Drug and Alcohol Abuse Prevention

 Allow medical marijuana dispensaries to tax sales of marijuana to non-medical marijuana cardholders at a 25% rate, so long as Senate Bill 460 passes.

The chart below shows how each Oregon County voted on Ballot Measure 91. Those counties with no less than 55% of voters casting ballots against Ballot Measure 91 (shown in yellow) will be allowed to opt-out by vote. MEASURE 91 VOTE BY COUNTY COUNTY % FOR % AGAINST # FOR # AGAINST Baker 40.5% 59.5% 2931 4305 Benton 60.4% 39.6% 22714 14913 Clackamas 51.9% 48.1% 80200 74368 Clatsop 56.5% 43.5% 7583 5833 Columbia 53.4% 46.6% 10781 9423 Coos 53.5% 46.5% 12866 11192 Crook 41.1% 58.9% 3732 5347 Curry 57.0% 43.0% 5565 4202 Deschutes 51.5% 48.5% 35267 33216 Douglas 45.5% 54.5% 18856 22600 Gilliam 40.9% 59.1% 370 535 Grant 35.1% 64.9% 1167 2154 Harney 34.2% 65.8% 1033 1985 Hood River 57.3% 42.7% 4815 3586 Jackson 53.2% 46.8% 42950 37803 Jefferson 43.6% 56.4% 3026 3921 Josephine 49.9% 50.1% 16917 17011 Klamath 43.7% 56.3% 10024 12932 Lake 38.1% 61.9% 1229 1995 Lane 60.5% 39.5% 87439 57047 Lincoln 61.9% 38.1% 12224 7537 Linn 47.0% 53.0% 20548 23147 Malheur 31.2% 68.8% 2368 5230 Marion 48.3% 51.7% 49610 53159 Morrow 33.9% 66.1% 1086 2121 Multnomah 71.2% 28.8% 204732 82861 Polk 47.8% 52.2% 14676 16055 Sherman 38.4% 61.6% 346 555 Tillamook 55.4% 44.6% 5973 4814 Umatilla 37.1% 62.9% 7115 12051 Union 40.9% 59.1% 4229 6108 Wallowa 38.8% 61.2% 1416 2236 Wasco 48.8% 51.2% 4497 4725 Washington 55.2% 44.8% 105432 85467 Wheeler 36.6% 63.4% 260 450 Yamhill 49.6% 50.4% 18081 18339 SOURCE: Information taken from election results at: “Rep. Andy Olson (R-Albany), Rep. Carl Wilson (R-Grants Pass), and Senator Ted Ferrioli (RJohn Day) worked extraordinarily hard on these bills. Their efforts have certainly been to Oregon’s benefit,” Rep. Bentz added. More information on what is and is not legal with regards to recreational marijuana can be found at the Oregon Liquor Control Commission’s website at: Additional information regarding HB 3400 and HB 2041 can be found on the Oregon Legislative Information System (OLIS) at:

Both HB 3400 and HB 2041 will now move on to the Oregon Senate for review and approval.

XXX 258 S. Oregon St., P.O. Box 1027, Ontario, OR 97914 900 Court St. NE, H-475, Salem, OR 97301 [email protected]