Hilary Bricken

It’s prime time in Oregon for entrepreneurs who want a shot at getting a state medical marijuana license. It is, however, important to remember is that the rules set out by the Oregon Health Authority (OHA) are temporary. Regulatory rules are never final and are always changing, so be prepared to roll with the state’s punches. Our cannabis lawyers can tell you horror stories in other states involving ever changing rules. If possible, avoid spending money on something that may prove unnecessary a few weeks later due to a rule change.

It is also important that you know the details of Oregon’s marijuana program if you are going to be seeking a license and then operating under that program. Here are the key provisions:

  • Only Oregon residents may apply for a license (but there’s no time limit on that residency requirement).
  • No person convicted of having manufactured or delivered a Schedule I or Schedule II substance in the past five years will be allowed to register a dispensary. Persons with more than one conviction for manufacturing or delivering are permanently banned from operating dispensaries.
  • Applicants will undergo a criminal background check and be fingerprinted.
  • Applicants must have a registered business with the Oregon Secretary of State (or must have a business application pending); applications for a dispensary as an individual person will not be accepted.
  • No dispensary may open or operate within 1,000 feet of a primary or secondary school.
  • No dispensary may open or operate within 1,000 feet of another dispensary. Applications for competing locations will be processed on a first-come, first-served basis.
  • Distance measurements from schools and other dispensaries are “as the crow flies.”
  • All medical marijuana distributed through dispensaries must be tested for pesticides, mold and mildew, and may not be distributed if contaminants are found.
  • There must be a strong security system in place.
  • Applicants must submit a floor plan of the facility that has marked and labeled all points of entry to the facility, all secured areas, and the proposed placement of all video cameras.
  • All product brought into and dispensed from the facility must be tracked and traced.
  • A dispensary may not be located in the same place as a registered grow.
  • Applicants must submit documentation that their proposed facility complies with current zoning restrictions.
  • The OHA will visit and inspect each dispensary and audit its financial records at least once a year.

Fees. The initial application fee is $500 and it is non-refundable. The initial registration fee (once approved for the license) is $3,500.

Local government control. OHA’s website on marijuana dispensary applications makes clear that it has no authority over local government decisions to implement their own marijuana regulations. This means that even if you obtain a state license to operate, your city or your county can stop you from opening your dispensary based on their own restrictions. In fact, the Oregon senate and house are looking at different amendments to SB 1531 and whichever ends up passing will determine whether cities and counties can ban medical marijuana dispensaries or just regulate them. This is the sort of uncertainty we were talking about above.

Schools. Oregon’s revised marijuana laws prohibit marijuana businesses from locating within 1,000 feet of schools. The state was helpful enough to actually provide applicants with a school tracker map, but it also made clear that its map may not include all schools in the state. This means that you will need to make sure on your own that your proposed location actually complies with the footage requirements and we recommend that you do so before you spend money on your space.

For profit? ORS 475.314 mandates that “a medical marijuana facility may reimburse a person responsible for a marijuana grow site under this section for the normal and customary costs of doing business, including costs related to transferring, handling, securing, insuring, testing, packaging and processing usable marijuana and immature marijuana plants and the cost of supplies, utilities and rent or mortgage.” It is not at all clear that reimbursement includes a sales price or surplus costs. This ambiguity in the law means that it is not clear that entrepreneurs will be allowed to compensate each other for services rendered and that cannabis businesses will be able to operate as for profit entities in Oregon.

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The Canna Law Blog™ is a forum for discussion about the practical aspects of cannabis law and how it impacts those involved in this growing industry. We will provide insight into how canna businesspeople can use the law to their advantage…

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