How To Start a Cannabis Business in Oregon Post BM91
Now that Ballot Measure 91 has passed many people who have been waiting on the sidelines are feeling more comfortable moving forward with starting their cannabis business in Oregon. But, because rule-making won’t start for many months, and there is still a 2015 legislative session to get through, how do you do it?
Below are a number of issues to consider if you are ready to start your cannabis business now:
– The Oregon Medical Marijuana Act still applies. https://www.oregonlegislature.gov/bills_laws/lawsstatutes/2013ors475.html
– Because OMMA still applies we are a reimbursement state for all cannabis until July 2015 and still a reimbursement state for medical even after recreational becomes operative- until the legislature modifies that language during the 2015 legislative session
– If you plan to open your cannabis business in Oregon before the licensing process is done you will be operating under the existing laws. That means if you are a dispensary you are applying for a license under House Bill 3460, if you are a grower you are finding patients and growing for them under the OMMP and if you are a processor or making edibles you are continuing to operate in an almost unregulated environment.
– There are lots of things we don’t know yet which makes some decisions risky. These things include zoning for grows, local regulation of time, place and manner, whether a medical dispensary can become a recreational one, if grows and processing can be in the same location and many more. Some of you will make good bets and some won’t and we will wind up fighting about it. Consider this a period of transition.
– We don’t know if the Oregon legislature, which meets for the first half of next year, will make serious statutory changes to Ballot Measure 91. While they have been typically resistant to overhauling a measure the voters just endorsed, it may very well happen. There are a lot of interests at play and there are likely to be at least a few unexpected changes.
Here’s what we do know about Ballot Measure 91 and the recreational cannabis market:
– There will be four licenses. Those are producer, processor, wholesaler and retail. Producers are growers, processors are packagers and labelers, edible makers and people making extracts and concentrates. Wholesale licenses are like beer and wine distributers. This license should cover transportation, brokers and cannabis reps. Retail licenses will be issued to storefronts.
– Taxes are paid at the grower level. Growers will pay $35 per ounce on flower, $10 per ounce on trim or leaf and $5 per immature plant. That’s it. Oregon has no sales tax and no additional excise tax. Many cities and counties are trying to pass additional taxes but the language of Ballot Measure 91 strictly prohibits that (this may very well be a statutory change that happens at the legislative level).
– There is no residency requirement. That means a 100% open market that is not unfriendly to out of state investment.
– This will not dismantle the medical marijuana system in Oregon. That language is in the Ballot Measure and was intended to prevent that from happening through rule-making or the legislative process. Whether the medical market eventually disappears on it’s own is another post.
– There are no limits in the Ballot Measure as to the number of licenses or the size of a grow facility.
– The Ballot Measure makes it very difficult for local jurisdictions to opt-out and ban facilities. In 2014 the Legislature allowed temporary moratoriums on dispensaries through Senate Bill 1531. While they could do that again, it seems unlikely due to the strong language in the Ballot Measure.
– There is going to be an intense rule making process that will take many months. Who will be involved in that is still an unknown. It will likely look like an expanded version of the HB 3460 process. You can watch what that looked like here: https://www.oregon.gov/oha/mmj/Pages/rules.aspx
– Ballot Measure 91 is a relatively simple measure even though it’s a long read. It essentially gives the OLCC the power to promulgate rules and regulate the cannabis market in Oregon. OLCC has already put up a website and you can subscribe for updates. https://www.oregon.gov/olcc/marijuana/Pages/default.aspx
While there are many unknowns, this is great time to become an owner of a cannabis business in Oregon. If you want to talk about the upcoming changes or are ready to get started please contact us at Emerge Law Group, we can help.
You can read the full text of Ballot Measure 91 here: