Oregon and Washington: A Tale of Two Recreational Marijuana Laws

Last week, I participated in The Oregonian’s Speaker Series (at The Bing Lounge in Portland) discussing what Oregon can learn from Washington’s marijuana legalization regime. A fitting time to dish on such a topic since the polls are indicating that Oregonians are ready to legalize recreational marijuana this fall via Initiative 91.

The intent and purpose of I-91 is to legalize, treat, and regulate marijuana like alcohol. Under I-91, Oregon’s Liquor Control Commission will oversee the State’s recreational marijuana program. And though the initiative shares some similarities with Washington’s recreational use regime, there are some notable (positive) differences between I-91 and I-502 (Washington’s recreational marijuana initiative), including the                following:

1. Oregon will not have a residency requirement. Though Washington mandates a 90-day residency period for all I-502 licensees and their financiers, I-91 does not contain a residency requirement. This means Oregon’s recreational market is going to be open to out-of-staters. Oregon will thus benefit from the experience, knowledge, and innovation that out-of-staters can provide.

2. Oregon will permit retail delivery. I-502 prohibits such delivery and this has caused significant consternation among marijuana entrepreneurs and customers in Washington. Oregon’s allowing deliveries will obviously be particularly good for those who are home-bound.

3. Oregon Cities and counties cannot ban I-91 facilities outright, but they can put such proposed bans to a vote of the people. I-502 didn’t speak to the ability of cities and counties to ban State-licensed marijuana businesses and litigation has ensued to determine whether in fact cities and counties have this right.

4. Oregon will be leaving its current medical marijuana program intact. I-502 did not even mention medical marijuana and Washington’s medical marijuana facilities now actually compete with I-502 licensed businesses. Washington State’s Liquor Control Board ultimately recommended that the State roll Washington’s medical marijuana program into I-502 so that patients could only access I-502 licensed storefronts (rather than medical marijuana dispensaries). The Washington State Legislature nearly eradicated medical marijuana last session, but in the end has not moved on this issue.

5. Oregon will allow vertical integration. I-502 bars vertical integration of I-502 companies. This means that a  cannabis producer/processor cannot also be a retailer and vice-versa. This will not be the case in Oregon and this will give businesses more flexibility over pricing and a greater ability to control the dissemination of their products and brands.

6. Oregon will not cap the number of retail licenses overall, and individual companies can apply for multiple licenses. Washington has strict licensing caps such that there can (currently) be no more than 334 licensed retailers and any one applicant could not apply for more than three producer/processor licenses or more than three retail licenses. In Washington, if you applied to be a retailer, you could not also apply to be a producer/processor and vice-versa. In February 2014, the Liquor Control Board also reduced the number of licenses a producer can possess from three to one.

7. Oregon’s DUI laws will remain the same. I-502 mandates that drivers found to have more than .5 nanograms of active THC in their blood stream have committed a per se DUI violation. In Oregon, under I-91, the DUI laws regarding “driving high” remain the same and no nanogram threshold of THC of any kind is imposed. I-91 does provide though that the Oregon Liquor Control Commission is free to study the issue and to research the available data and make recommendations to the legislature regarding future changes to the DUI laws.

8. Oregon will apply “privilege” taxes only to growers. Under Washington State’s I-502, a 25% excise tax applies to the sale of every gram of marijuana between licensees, all the way down to consumers. Under Oregon’s I-91, only growers will pay the following taxes: $35 per ounce on all marijuana flowers; $10 per ounce on all marijuana leaves; and $5 per immature marijuana plant.

There will definitely be differences between Oregon and Washington when it comes to recreational marijuana, but one thing is for sure, Oregon is going to be the next great opportunity for recreational marijuana after I-91 passes this fall.