Marijuana Legalization in Oregon

The Impact of Measure 91 & Its Legislative Amendments

By Russ Belville – Executive DirectorPortland NORML

Topics to Address

• Details of Measure 91 that Make Oregon Different From Other Legal Cannabis Marketplaces

• State v. Local Law Conflicts Shape Legislation• Outcome of Legislative Amending of Measure 91• What Will Happen to Medical Marijuana in the Wake of

Measure 91 and its Amendments?• How Will Commercial Cannabis and Industrial Hemp

Co-Exist Under Threat of Cross-Pollination?• What Can Registrants/Licensees and Their Counsel

Expect from Measure 91?

Measure 91 vs Other StatesLegal

StatusOregon

2014Washington

2012Colorado

2012Alaska2014

Public MJ Up to 1oz Up to 1oz Up to 1oz Up to 1oz

Private MJ Up to 8oz Up to 1oz Results of Harvests

Up to 4oz(Ravin v Alaska)

Edibles Up to 1lb Up to 1lb Up to 1oz in the edible

Up to 1oz in the edible

Tinctures Up to 4.5pt Up to 4.5pt Up to 1oz in the tincture

Up to 1oz in the tincture

Extracts(not glycerin?)

Up to 1oz(Store-Bought) Up to ¼oz Up to 1oz Up to 1oz

Concentrates(not Extracts?) As Marijuana? Up to ¼oz Up to 1oz Up to 1oz

Plants 4 / house 3 mature3 immature

25 / house(Ravin v Alaska)

HB 3400A Possession UpdatesLegal

StatusOregon

2014Washington

2012Colorado

2012Alaska2014

Public MJ Up to 1oz Up to 1oz Up to 1oz Up to 1oz

Private MJ Up to 8oz Up to 1oz Results of Harvests

Up to 4oz(Ravin v Alaska)

Edibles Up to 1lb Up to 1lb Up to 1oz in the edible

Up to 1oz in the edible

Tinctures Up to 4.5pt Up to 4.5pt Up to 1oz in the tincture

Up to 1oz in the tincture

Extracts(solvent)

Up to 1oz(Store-Bought) Up to ¼oz Up to 1oz Up to 1oz

Concentrates(non-solvent) Up to 1lb Up to ¼oz Up to 1oz Up to 1oz

Plants 4 / house 3 mature3 immature

25 / house(Ravin v Alaska)

Measure 91 CommercialBusiness Entities

Oregon2014

Washington2012

Colorado2012

Alaska2014

Residency Open to All 3 Months 2 Years Open to All

Producer(Plants)

$250 App$1,000

$250 App$1,000

$5,000 App$2,200-$8,000 Up to $5,000

Processor(Products)

$250 App$1,000

$250 App$1,000

$5,000 App$2,200 Up to $5,000

Wholesaler $250 App$1,000

Retailer $250 App$1,000

$250 App$1,000 (334)

$5,000 App$3,000 Up to $5,000

Taxation$35/oz Flower$10/oz Leaves$5 / Seedling

25% Producer25% Processor25% Retailer

+State & Local

15% Excise10% Sales

+State & Local$50/oz

HB 3400A Commercial UpdatesBusiness Entities

Oregon2014

Washington2012

Colorado2012

Alaska2014

Residency 2 Years(until 2020) 3 Months 2 Years Open to All

Producer(Plants)

Cost-based FeeTiered System

$250 App$1,000

$5,000 App$2,200-$8,000 Up to $5,000

Processor(Products) Cost-based Fee $250 App

$1,000$5,000 App

$2,200 Up to $5,000

Wholesaler Cost-based Fee

Retailer Cost-based Fee $250 App$1,000 (334)

$5,000 App$3,000 Up to $5,000

Taxation25% Temp Tax,

17% Retail Excise Tax

≤3% Local Tax

Directed 37% Retail Excise Tax

+State & Local

15% Excise10% Sales

+State & Local$50/oz

Measure 91 DepenalizationPossession Limits (21+) LEGAL Class B

ViolationClass B

MisdemeanorClass CFelony

Public MJ Up to 1oz Up to 2oz Up to 4oz 4oz or more

Private MJ Up to 8oz Up to 1lb Up to 2lb 2lb or more

Edibles and Concentrates Up to 1lb Up to 2lb Up to 4lb 4lb or more

Tinctures Up to 4.5pt Up to 1gal 1pt Up to 2gal 1qt 2gal 1qt or more

Store-Bought Extracts Up to 1oz Up to 2oz Up to 4oz 4oz or more

Homemade Extracts Up to ¼oz ¼oz or more

Plants Up to 4 / house Up to 8 / house 8 or more

HB 3400A Depenalization UpdatesPossession Limits (21+) LEGAL Class B

ViolationClass B

MisdemeanorClass A

Misdemeanor

Public MJ Up to 1oz Up to 2oz Up to 4oz 4oz or more

Private MJ Up to 8oz Up to 1lb Up to 2lb 2lb or more

Edibles and Concentrates Up to 1lb Up to 2lb Up to 4lb 4lb or more

Tinctures Up to 4.5pt Up to 1gal 1pt Up to 2gal 1qt 2gal 1qt or more

Store-Bought Extracts Up to 1oz Up to 2oz Up to 4oz 4oz or more

Homemade Extracts Up to ¼oz ¼oz or more

(Class C Felony)

Plants Up to 4 / house Up to 8 / house 8 or more(Class C Felony)

HB 3400A Depenalization UpdatesOregon

LawClass B

ViolationClass A

ViolationClass B

MisdemeanorClass A

MisdemeanorClass CFelony

Import or Export

For No Consideration

For Consideration

Unlawful Delivery

Less than 5 grams

Up to 1 ounce

Over 1 ounce

To <18 y.o.By >21 y.o.

Unlawful Manufacture or Delivery within 1,000 Feet of a School Class A Felony

Minor (<21) Access Attempt

Minor (<21) Possession

Less than 1 ounce

Up to 8 ounces

Over 8 ounces

Minor (<21) Edibles

Up to 1 pound

Over 1 pound

Minor (<21) Tinctures

Up to 4.5 pints

Over 4.5 pints

State Law vs. Local Option

Measure 91 as Written• State is sole taxation

authority (just like liquor)• Only a vote of the people

can ban marijuana licensees (just like liquor)

• Oregon Medical Marijuana Program shall not be affected by Measure 91

Cities & Counties Wanted• Grandfathering in local

taxes passed before vote• Councils & Commissions

may vote to ban licensees without a referendum

• OMMP plant count reductions, record keeping and inspections, local dispensary bans remain until voted out

HB 3400A “Eastern Compromise”• 15 Eastern Oregon Counties

that voted >55% against Measure 91 are given 180 days to ban both recreational and new medical marijuana shops through a vote of the city council / county commission– Remaining western counties

must still ban only through a vote of the people… as statewide election vote determined

New Definitions in HB 3400A

• Measure 91 “Extract” = solvents other than vegetable glycerin, such as butane, hexane, isopropyl alcohol, ethanol, and carbon dioxide

• “Concentrate” = mechanical or non-solvent– water, vegetable glycerin, vegetable oils, animal fats, isopropyl

alcohol or ethanol– carbon dioxide, minus high heat or pressure

• “Extract” = solvent– butane, hexane, or propane– carbon dioxide, plus high heat or pressure

• “Immature Plant” = non-flowering

Advertising Restrictions

• Measure 91 Text allowed OLCC “To regulate and prohibit any advertising …by the medium of newspapers, letters, billboards, radio or otherwise.”

• HB 3400A allows OLCC “To adopt rules regulating and prohibiting …advertising marijuana items in a manner:– That is appealing to minors;– That promotes excessive use;– That promotes illegal activity; or– That otherwise presents a significant risk to public health

and safety.

Prior Convictions vs. Licensing

• Convictions for marijuana cultivation older than two years can not disqualify applicant

• Convictions for delivery to a minor older than two years can not disqualify an applicant

• Measure 91 originally proposed a five-year cutoff date

Marijuana Producers

• Must be 21 and a 2-year resident (until 2020)• OLCC cannot limit number, canopy, or weight of

immature marijuana plants• OLCC shall limit mature plant canopies in a

tiered system with consideration of demand• OLCC shall implement sliding fee schedule

based on square feet or mature plants• Sliding fee schedule does not apply to

producers of immature plants only

Processors, Wholesalers, Retailers

• Must be 21 and a 2-year resident (until 2020)• Extract processors, wholesalers, and retailers

may not be in exclusive residential zones• Retailers may not be within 1,000 feet of

public, private, or parochial schools• If a school moves in within 1,000 feet of a

retailer, the retailer may stay• Must abide by industry best practices

“Budtender” Permits

• OLCC may require training on– Checking identification– Detecting intoxication– Handling marijuana items– The marijuana laws– Public health and safety

• Criminal background check for felonies– Except cultivation or delivery over two years old

• Whistleblower and unionization protection

Regulatory Miscellaneous

• OLCC may require bonds & liability insurance• OLCC shall develop “seed-to-sale” tracking• Minors attempting to access marijuana items is a

Class B violation, except decoys and 911s• Gov’ts may adopt “time and manner” regs, but

can’t limit licensees from being >1,000 feet from each other

• People may personally produce, process, and possess marijuana within 1,000 feet of a school

Regulatory Miscellaneous

• Marijuana crops = “farm use / farm practice”• Cannabis seeds = “nursery stock”• Mature marijuana plants may not be sold• Marijuana, products, & concentrates must be

produced, processed, & stored out of public view

• Prior convictions treated under new law, or Class C misdemeanor if now legal, for purposes of setting aside conviction

SB 460 “Early Sales”

• Three months from legalization to sales– Colorado = Twelve months– Washington = Eighteen months

• SB 460 would allow existing dispensaries to sell to all adults Oct 1, 2015 – Dec 31, 2016– Adults limited to ¼ ounce flowers only– No extracts, edibles, or tinctures sales– May purchase up to four seedlings or seeds– Local governments may ban such sales– Sales would be tax-free, until…

HB 2041A “Marijuana Taxes”

• HB 2041 would set an early 25% sales tax paid only by recreational consumers– Tax begins at MedMJ dispensaries on Jan 4, 2016– Tax reverts to 17% + HB 3400A’s ≤3% when retailers

finally open, no later than Dec 31, 2016– Localities that ban still get 10% city & 10% county

share until July 1, 2017, when half-share is proportional to producer/processor/wholesaler licenses and half-share proportional to retailers

Medical Marijuana – Patients

• Vets with PTSD = $20 OMMP Card• “A degenerative or pervasive neurological

condition” is now a qualifying condition for OMMP Card

• Medical marijuana patients cannot be denied organ transplants (R.I.P. Jim Klahr)

• Hospice & palliative care centers may be designated as additional caregivers

• Patients may fully reimburse Growers

Medical Marijuana – New Items

• “Immature Plant” & “Concentrate” from recreational definitions

• New “Processors” designation• Processors & Dispensaries must track transfers

of items• Inspections of Growers, Processors,

Dispensaries• Growers may opt-in to become Producers, if

they meet recreational licensing criteria

Medical Marijuana – Tracking

• Growers must track possession and transfers– Monthly reporting and two-year record retention– Plant numbers (mature and immature)– Amount of leaves & flowers drying– Amount of usable marijuana

• 2-Year Residency for Growers, Processors, Dispensary Owners/Operators until 2020, plus background check– A/B Felony Schedule I/II = 2-Year DQ– Twice A/B Felony Schedule I/II = Lifetime DQ

Medical Marijuana – Grow Limits

• Cap on grow site mature plants– 12 plants in residential, 48 non-residential, with up to

6 plants per patient– Maintain up to 24 / 96 for current grows as of

December 31, 2014

• Cap on grow site possession– Indoor grows may possess 6lbs / mature plant• e.g. 12 plant indoor residential max = 72lbs.

– Outdoor grows may possess 12lbs / mature plant• e.g. 48 plant outdoor non-residential max = 576 lbs.

Industrial Hemp Survives

• House Bill 2668 killed by Oregon Senate– Would have revoked 13 existing hemp permits and

required all crops in ground to be pulled– Set moratorium on new hemp permits to 2017– Ban hemp growing within 1,000 feet of a school

• Bill championed by outdoor Southern Oregon growers who fear cross-pollination

• Critics contend that Dept of Agriculture, not Legislature, should decide agriculture issues

What Can Licensees Expect from Oregon’s Marijuana Legalization?

• Somewhat cheaper and easier licensing than others• Bureaucratic resistance outside liberal metro areas, possibly

bans, restrictive zoning• No “tied house” or “vertical integration” issues• Massive crash in wholesale prices• Huge tourist boost for Oregon Coast & Bend• Cross-border traffic for Portland & Hood River• Delivery opportunities for Eastern Oregon (but is that a

“mobile premises” that OLCC may not license?)• Future integration of commercial medical and recreational

distribution channels

PortlandNORML.org