As Oregon Prepares for MJ Legalization, Some Details Remain Unclear


With recreational marijuana usage set to become legal in less than a month in Oregon, a battle is arising over local control of the sale of the drug. Proposed amendments to House Bill 3400, the law making marijuana legal on July 1st, 2015, would give local cities and municipalities the right to charge a 3% local tax. This is seen by many as an answer to criticisms of HB 2041, which would allow localities to prohibit marijuana facilities within their area, but would also allow for a 17% state tax on retail sales of marijuana. Some localities have balked at not being able to regulate or prohibit retail marijuana sales in certain areas, on which the law remains unclear.The amendments adding for a local tax also seems to fly in the face of the language in the original Measure 91, which specifically gave only the state the right to tax marijuana, not individual cities or counties, but did allow for the State to share that tax revenue with localities.  The sales tax was settled on as a way to allow medical marijuana growers to grow for retail sales without having to pay the tax at the production level included in Measured 91. The changes to HB 3400 did not satisfy all participants that were worried about the lack of local control and enforcement though. The state allowed localities to prohibit medical marijuana dispensaries at their discretion, but that ban expired May 1st. Now, some localities are concerned they will no longer be allowed to impose local bans, because Measure 91 allows for ban only through a vote of the people in the community.

With control and regulatory authority handed over to the Oregon Liquor Control Commission, there has been a scramble to address some of these issues before the legislature goes to recess, as well as before July 1st when anyone over 21 will be, legally speaking, able to grow or possess marijuana. Federal banking rules still prevent marijuana-related business from getting banking services, and the Oregon legislature has not yet addressed how local state banks may operate safely to serve these businesses. Even different growers are battling as the eve of legalization approaches. Hemp, the non-intoxicating version of marijuana, are facing a threat from the recreational marijuana side. Lawmakers are considering a bill that would halt hemp production because of concerns that pollen from the hemp plants would cross-pollinate female cannabis plants, ruining the cash crop by lowering THC levels. Hemp farmers worry that the legalization of marijuana could spell the end of their industry, and are attempting to block the legislation. Hemp farmers’ production of hemp for various beneficial health products, such as CBD oil, could be badly harmed if they no longer have access to prime Oregon growing areas favored by competing recreational marijuana growers.

It’s going to be a busy few weeks leading up to the July 1st legalization date, one that is sure to include more Oregon lawyers, legislators, growers and recreational users having their say on what the laws and regulations ultimately will be in the State when it comes to marijuana usage and taxation.

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