The Dalles City Council invited Rob Bovett, attorney for the Oregon Association of Counties, to brief officials and community members Monday about how sales of recreational marijuana are being regulated.
Bovett took the place of Sean O’Day, legal counsel for the League of Oregon cities, due to a scheduling conflict.
“We are decidedly agnostic about marijuana, our job is to give cities and counties the most options,” he said at the Jan. 25 town hall to explore the issue and gather citizen input.
By way of background, Bovett said marijuana use was unlawful in Oregon until 1973, when the state became the first in the nation to decriminalize small quantities of the drug. In 1996, California made medical marijuana legal and Oregon followed suit two years later.
In November 2014, Oregon voters approved Measure 91, which legalized growing and possessing certain quantities of marijuana for people age 21 and older.
Sales began July 1, 2015, at medical marijuana dispensaries so the state had time to establish a licensing program for retail outlets, which is expected to be completed by fall.
Bovett said dispensaries can continue to sell pot for recreational use until the end of the year.
Although “cities and counties don’t have the ability to recriminalize what the state has decriminalized,” Bovett said the state legislature made accomodations to allow strongly opposed areas to opt out. If the electorate in a city or county weighed in against M91 by a margin of 55 percent or higher, Bovett said local governments can enact an outright ban on production and sales.
He said there are 242 cities in Oregon and many on the eastern side of the state have chosen to take that route, while larger urban centers on the western side, such as Portland, are supporting sales.
“Suffice to say there is a broad diversity of opinions and a broad diversity of choices being made,” he said.
Bovett said the legislature set up a mechanism so cities like The Dalles, where M91 was defeated by a margin of about 51 percent, can go in either direction.
He said the city is authorized to bring the issue before voters in November 2016 and they can be asked to approve or disapprove both recreational and medical marijuana operations.
However, he said the existing dispensary in The Dalles is already established so it would be allowed to remain in
business even if the vote was against sales.
Bovett said the city can also decide to allow pot sales outright, but citizens would still have the option to refer the issue to the ballot.
The down side of banning pot sales, he said, is that cities and counties without stores will not share in state revenue from a tax of 25 percent on sales that is expected to fall to 17 percent this fall.
Medical marijuana is not taxed and will not be in the future, said Bovett.
He said the net proceeds of taxes collected by the state will be distributed as follows:
• Forty percent goes into the common school fund.
• Twenty-five percent will be used for alcohol and drug abuse treatment and prevention programs.
• Fifteen percent is to be given to the Oregon State Police to cover the cost of enforcement actions.
• Ten percent is reserved for cities and 10 percent to counties for enforcement against the black market.
Although the first tax distribution is scheduled to take place in July 2017, Bovett said it was unlikely that “anybody would get a dime” given that OLCC needs to repay a loan from its alcohol fund to establish a marijuana oversight program.
“How much money will there be after that? That’s where my crystal ball breaks down,” he said. “I can’t tell, it all depends on how well we move the black market into the regular market.”
He said license fees have to support OLCC’s costs to run the program so fees for participating businesses will rise as needed.
He said Senate Bill 1511, a proposal for the 2016 legislative session, seeks to allow OLCC licensed recreational processors, wholesalers, producers and retailers to also sell medical marijuana without any tax.
That will not necessarily phase out dispensaries, said Bovett, because there is no tax on medicinal sales so patients may find it less expensive to get the drug at these sites.
In areas where recreational sales are banned, he said dispensaries could end up being the only store in town.
He expects the legislature to lift the current requirement that recreational pot business owners reside in Oregon for two years before applying for a retail license.
Although the state is still tweaking the rules for accommodation of M91, Bovett doesn’t envision very many significant changes being made at this point.
He was joined at Monday’s town hall by Gene Parker, city attorney, in the briefing that included a question and answer session.
Parker said there were seven areas the city needs to address if local pot sales are to occur.
These include siting of grow operations, as well as where production facilities for cannabis and retail sales can take place.
City officials are weighing whether to send the issue before voters.
Parker has recommended that, if the city goes that direction or decides to allow sales outright, that voters be asked to approve a local tax on pot sales of 3 percent.
When deciding where to place stores, if approved, he said state rules require that recreational pot retailers be spaced at least 1,000 feet apart, the same distance they have to be from schools.
Resident Gary Dunning asked if home schools qualified for the same protection and Bovett said the buffer zones are being drawn mostly around public schools or larger private institutions.
Karen Wilson, a local attorney, asked Bovett what would happen if a new school was built on property next to an existing pot dispensary or store. She wondered if retail sales would be halted.
“That is a simple question for which I have no simple answer,” he said.
Bovett said the dispensary would likely be allowed to remain but a recreational outlet would probably have to shut down.
He said local officials would be able to prevent that type of conflict by adopting rules that established zones for these businesses.
Bovett said OLCC did not set any caps on the number of recreational marijuana stores that one town could have because officials felt that issue would ultimately be decided by the free market.
Resident Phil Foote asked what would be done about keeping cannabis edibles and concentrates out of the hands of children.
Bovett said Oregon had learned from mistakes made by Colorado in regard to colorful packaging that was attractive to youngsters.
He said the psychoactive ingredient in marijuana – THC – could be much higher in edibles so there had been many overdose cases in Colorado, which did not initially limit the milligrams of pot or how it was packaged.
“We are allowing about half the dosage of Colorado,” said Bovett. “And there are quite a few rules around child safety (such as restrictions on the look of labels and packaging) but it really is incumbent upon those over 20, and in possession of the products, to be responsible.”
Foote also asked how the conflict legalizing pot in Oregon when it was still unlawful at the federal level, which trumps state law, is going to play out —especially with a change in presidency.
Bovett said federal agencies are using the legal out of “prosecutorial discretion” to avoid pursuing enforcement action.
“The feds have issued a memo not to prosecute anyone if they are in compliance with state standards,” he said.
He acknowledged that if a president was elected that wanted to enforce federal law then there could be conflicts.
Mayor Steve Lawrence said the council will make a decision about the issues at future meeting.