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Oregon Pot Committee Strikes 11th-Hour Deal on Marijuana Regulation

Lawmakers in the House and Senate finally reached a consensus on regulations governing marijuana, improving on past efforts to test for the health and safety of the marijuana supply, imposing professional standards on the industry, and giving some local governments the chance to keep local bans -- if they give up their share of the tax revenue.
June 16, 2015

The long-awaited comprehensive marijuana bill, outlining the regulations for both medical and recreational pot, was pushed out of the Joint Committee on Measure 91 on Monday evening by a consensus vote, setting up a floor vote in the House this week.

“I think we’ve moved through some pretty big obstacles and to a place where there’s broad acceptance,” said Rep. Ann Lininger, D-Lake Oswego, the House chairwoman of the committee. By acceptance she did not mean delight with the legislation, as it formed a sweet spot that nobody liked but everybody tolerated. “Everyone is mildly dissatisfied with where we are.”

A complex piece of legislation if there ever was one, House Bill 3400 is 164 pages long and includes 143 sections. Among its provisions, the state will increase regulations for contaminant  testing of dispensary pot when it’s used for medical reasons and expand those regulations to include recreational sales. Packaging must be childproof and include warning labels about negative health impacts, particularly to pregnant women and developing fetuses.

Thousands of Oregonians will have their criminal records expunged or reduced from felonies to misdemeanors, helping them move past the harm that marijuana prohibition has caused to their ability to seek work.

Rep. Andy Olson, R-Albany, a retired state police officer, said that 30 years ago, all possession or sale of marijuana was a felony in Oregon. The state has progressively decriminalized small amounts and legalized first medical and now recreational use. “It’s been a major shift and a major change,” he said.

Sen. Ginny Burdick, D-Portland, predicted that federal policies on marijuana will soon fall, putting Oregon at the center of a new industry. “We are in a post-prohibition era, and I think it will position Oregon to be a top producer of high-quality marijuana,” she said.

House Bill 3400 will replace Senate Bill 964, which passed the Senate last month but raised hackles in the House. SB 964 greatly reformed the state’s two-decade-old medical marijuana program, but included controversial protocols allowing local governments to easily enact bans on medical dispensaries that the House Democrats who were deliberating marijuana policy would not support.

The decision to bypass the joint committee with a special Senate bill still rankled Rep. Peter Buckley, D-Ashland, who continued to protest a law that was more conservative than the voter-passed referendum Measure 91. “The public has been shut out of the process,” Buckley said.

The legislation divided the recreational and medical marijuana communities, and Buckley’s protests likely echoed the latter, who did not want the Legislature tampering with the medical marijuana program as it hammered out the recreational statutes. “While this may be considered a victory for growers and industry, patients and their rights were left on Legislative Counsel's floor,” said Anthony Taylor of Compassionate Oregon, who opposed allowing communities to ban medical marijuana dispensaries.

Local bans will still be possible, but the legislative sausage-making that got legislators to an agreement makes it likely that fewer communities will make knee-jerk decisions to block medical or recreational pot.

If more than 45 percent of the voters in a city or county approved Measure 91 last November, councilors or commissioners must put any local ban up to the vote of their constituents.

If less than 45 percent approved legal pot, local officials will be able to ban outright both medical marijuana pharmacies and recreational businesses, including production, distribution and sales, from their jurisdictions. To get such an ordinance overturned, citizens would have to gather petitions to force a referendum.

“The voters wanted to go in the opposite direction, and we have now changed that,” said Rep. Ken Helm, D-Beaverton, referring to local versus state control.

But most significantly, cities and counties that do ban marijuana businesses at any level will lose out on any of the excise tax produced from legal recreational marijuana sales -- giving cash-starved rural counties in southern Oregon fewer excuses to go against voter will on Measure 91.

Geoff Sugerman, the lobbyist for the Oregon Cannabis political action committee, said that even communities that don’t receive tax revenue from pot sales will still benefit from legal marijuana because of the reduced costs to courts and law enforcement to deal with the substance.

He welcomed increased regulations that give the marijuana industry credibility and fix a flaw in the medical dispensary law that gives the Oregon Health Authority the power to monitor dispensaries but not the laboratories that test cannabis for pesticides or toxic chemicals. The state will now not only certify these labs but examine the science to know what they should be testing for.

“OHA didn’t have clear authority to regulate labs,” Sugerman said. “You’ll see a lot of real clean guidelines on standards and protocols.”

The taxing structure for recreational marijuana is still being worked out in the committee with House Bill 2041, but there seemed to be wide agreement to replace the producer tax with an excise tax similar to alcohol or tobacco, which is currently proposed at 17 percent of the sale price but could easily be calculated at a different rate.

Burdick said Oregon would look to maintain a tax level that is lower than Colorado or Washington, where high prices and red tape have kept a healthy black market.

“We’re trying to find a taxing point that brings in the revenues people are expecting but not so excessive as to encourage the black market or inappropriate use of medical cards,” said Burdick, from people pretending to have a medical condition to receive untaxed medical pot.

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