Oregon Marijuana is Not Like Other Crops

Growers, take note. Oregon’s new recreational marijuana law, HB 3400, has a brief but important section on land use.

The good news is that marijuana is defined in the new law as a “crop” for farm use purposes. This means that counties cannot restrict marijuana production in Exclusive Farm Use (EFU) zones, and that marijuana will be covered by the state’s “right-to-farm” law (ORS 30.930). That law prohibits local ordinances and lawsuits that target common farming practices, now including marijuana practices, as incidents of nuisance (think: smell) or trespass.

Unlike with other crops, however, HB 3400 provides that property owners cannot qualify to build new dwellings in the EFU zones by growing marijuana. Why not? Widespread concerns that the high-value crop would make it easier to develop homes on farmland. So, this restriction appears to be less about the marijuana itself than about preserving Oregon’s pastoral character.

For more than 30 years, Oregon has maintained a strong policy to protect farmland. The policy was adopted by the state legislature in 1973 and calls for the “preservation of a maximum amount of the limited supply of agricultural land” (see ORS 215.243). This is accomplished through Oregon’s Statewide Planning Program, which calls for counties to apply EFU zoning to agricultural land. There are about 16 million acres of EFU land in the state; seven types of dwellings may be approved in EFU zones.

To preserve EFU land, the Oregon Administrative Rules (OAR 660-033-0135) contain specific state-level test requirements for when building can occur on EFU land. These tests are then incorporated into local codes and zoning ordinances. One of the tests, the “gross income test,” requires that to site a dwelling, a property owner must demonstrate that a crop on high-value farmland has produced at least $80,000 in annual gross income over the past two years, or in three of the past five years. If the crop is not on high-value farmland, the hurdle is lower.

Marijuana is a high value cash crop though exactly how valuable is a source of debate. However, in an effort to insulate Oregon EFU land from development, the legislature acted proactively here. Measure 91 (legalizing marijuana in Oregon) was silent on land use, reciting only the Cole Memo criterion that the measure sought to “prevent the growing of marijuana on pubic lands.”

Note that the exact language of HB 3400 provides that new dwellings aren’t permitted on land zoned for exclusive farm use “in conjunction with a marijuana crop.” This will be litigated. The argument will be whether the value of marijuana is excluded from the $80,000 in required gross revenue (where other crops are also grown on the land) or if growing marijuana necessarily prohibits any new dwellings on the property.

Finally, there are a few other, notable land use provisions in HB 3400 that apply to everyone, not just growers. First, the new law allows cities and counties to adopt local land use ordinances for all recreational marijuana sites. Second, the Oregon Liquor Control Commission (OLCC) can issue recreational licenses only after it receives a land use compatibility statement from the relevant county (which the county must provide within 20 days). Third, Section 34(a) includes the much discussed “local option tax” which counties and cities may levy in their jurisdictions, capped at three percent. And finally, sadly, no farm stands.