Every week, without fail, we speak with prospective clients looking to make an appearance in Oregon’s marijuana industry. Some of these entrepreneurs boast impressive business pedigrees; others are decidedly less experienced. Still, one question we regularly field across the board is: “What’s the biggest challenge about starting a marijuana business in Oregon?” My answer is always: “Finding a location.” Once the site is secured, everything tends to fall into place.
We have written before that location is critical in any business venture, but especially so with Oregon marijuana. Currently, the state is a curious patchwork of friendly and unfriendly marijuana jurisdictions, and even in the friendly locales, zoning rules and time, place and manner restrictions may govern where pot ventures can exist. This November, local voters in 47 cities and six counties will decide whether to open those barricaded locales to marijuana businesses. So, the pool of available locations will once again expand. The question is only to what extent, and where.
Our clients who have gone through licensing know that even before applying for any class of Oregon Liquor Control Commission (OLCC) license, the applicant must submit a Land Use Compatibility Statement (LUCS), showing local approval to operate. In certain jurisdictions, and for certain zones and license types, this process may require a conditional use application that even allows for public participation. In other situations, the LUCS involves nothing more than ministerial zoning review, processed over the counter. Once the LUCS is in place, OLCC will assume the location is viable and the applicant can proceed toward licensure.
Although acquiring the LUCS presents an occasional challenge, the main hurdle remains finding a viable site in the first place. Some uses are easier than others: for example, finding land to lease for marijuana production tends to be simpler than acquiring a storefront to sell it. This is because fewer properties around the state are eligible for storefront cannabis development than for agricultural use, especially given the proximity rules (schools, other dispensaries, etc.) applicable to marijuana retailers. As a general proposition, it is also easier to secure a property if you are willing to purchase, rather than lease.
Some common advice we give to new parties is that there is no replacement for research and for pounding the pavement in search of a site that will work. Although we occasionally get leads on properties from realtors, sellers and others, there are a great number of channels that should be explored, from listing sites like loopnet to networking opportunities through organizations like the Oregon Cannabis Association and Women Grow.
Once you find a site you like, it is critical to make sure it complies with the local zoning code and that the relevant city or county does not have any rule-making on the horizon that could affect you negatively. Unfortunately, we have seen people trip on these steps, and it can be devastating. Finally, once your diligence is complete, it is also important to ensure that the timing of the close will work with everything else you are doing: no one wants to sit on an unproductive asset for a minute longer than necessary.
In all, if you are determined to participate in Oregon’s marijuana industry, you will find a location that works. At that point, and unlike with other states, you will not have to worry about residency requirements, high compliance barriers, or a lottery for licensure. Oregon is wide open and it should remain that way for the foreseeable future. The biggest step is finding a place.