Oregon Marijuana: Many More Changes with the Christmas Tree Bill

Oregon Marijuana Law

This is the third installment in a four-part series on the new Oregon marijuana bills, all of which arrived in the recently concluded short session. If you would like to catch up, our summary of HB 4014 (abolishing residency requirements) is here, and our summary of SB 1511 (medical and recreational co-location) is here. This post surveys SB 1598, the session’s “Christmas tree bill.” Like the other bills we have covered, SB 1598 tackles a panoply of issues large and small.

Although SB 1598 came in just under the wire and with late amendments, Governor Brown quickly signed the new law last week. That’s good, because some of the new law’s provisions became effective March 1, with others extending out to January 2017. We will do our best to summarize the key changes here.

As our clients know well, Oregon requires applicants seeking to become licensed marijuana businesses to obtain a land use compatibility statement (LUCS) from their local city or county. The LUCS is then submitted as a part of an application to the Oregon Liquor Control Commission (OLCC) for licensure. SB 1598 removes the LUCS requirement for small-scale producers, as long as they are growing outside city limits and were registered at the site with the Oregon Health Authority (OHA) prior to January 1, 2015. The provision is designed to bring small growers into the OLCC system through a “micro-canopy” license. For outdoor sites, the micro-canopy ceiling will be 5,000 square feet, and the indoor grows ceiling will be 1,250 square feet. As with other classes of licensure, the canopy measurement standard is “mature marijuana plants.” That means plants that are flowering.

In another welcome amendment to land use law, SB 1598 expressly provides that medical (and research) marijuana grows are now bona fide farm crops under state law, like their recreational counterparts. This will make it easier to site medical grows in exclusive farm use areas, and should bolster protection from nuisance lawsuits filed by put-upon neighbors. The bill also prohibits cities and counties from adopting any ordinance after January 1, 2015, that imposes a setback requirement for an agricultural building used to produce recreational marijuana, if: the building was constructed on or before July 1, 2015, in compliance with applicable code; is located at an address where an OHA registered grow site was registered and running on or before January 1, 2015; and “has four opaque walls and a roof.” This will make a world of difference for several of our producer clients who were undone by local zoning rules passed after HB 3400 became law last summer.

As to changes specific to the medical program, SB 1598 clarifies that home grows will not be subject to inspection by the OHA, which will otherwise begin conducting plant counts at registered grow sites in the next few months. The bill also makes it possible for processing sites to transfer finished product back to cardholders and their caregivers, provided it was the cardholders’ marijuana in the first place. (Previously, processors could technically only transfer marijuana through to other processing sites and dispensaries.) SB 1598 also allows cardholders and caregivers to reimburse a processing site “for all costs” associated with processing pot for the cardholder. This clears up a problematic ambiguity in the best possible way.

In a benevolent gesture, SB 1598 creates a sub-category of dispensaries for nonprofits that will be allowed to accept excess marijuana from growers, and then sell that pot to patients for little or no cost. The bill also requires OHA to study medical marijuana access in areas underserved by dispensaries and retailers once the state’s regulated marijuana industry is up and running this fall.

Finally, in the context of license applications, the bill gives both OHA and OLCC expanded authority to conduct criminal background checks and gather fingerprints. The bill contains criminal expungement provisions for certain crimes; requires individuals who work for marijuana producers, processors, wholesalers, or retailers to have a valid worker permit issued by OLCC; and makes a few technical tax-based amendments to other cannabis laws.

If you made it this far, congratulations, and come back later this week for the final installment in this series. That post will discuss HB 4094 on cannabis banking in Oregon.