Oregon Marijuana Zoning Laws: Still All Over the Map

Three months ago, back when the old stuff was new, we wrote that marijuana zoning laws in Oregon were all over the map. This was shortly before HB 3400 was passed, which contains general provisions to shepherd local zoning decisions, like designating marijuana a “crop” for land use purposes. And specific provisions, like stating that no medical or recreational marijuana business (neither grower nor processor nor wholesaler nor retailer – none of them) may be located in a residential use zoned area. Despite these and other parameters, marijuana zoning in Oregon, today, remains all over the map.

Oregon cities and counties have a lot of power over cannabis
Oregon cities and counties have a lot of power over cannabis

As we have written before, Oregon is a home rule state, which means that its cities and counties are free to make rules as long as those rules do not conflict with a state law (in this case HB 3400) or a fundamental charter, like the state or federal constitution. Here, by virtue of its light approach to zoning regulation, the Oregon legislature left ample room for its cities and counties to regulate zoning (and to require business licenses, and to issue time, place and manner restrictions on marijuana businesses).

There are two primary ways Oregon cities and counties can regulate marijuana businesses through zoning. The first is with local development code; the second is with local land use code. A city that wishes to prohibit marijuana operations through development code might enact a provision that it will not issue a development permit—including a building or occupancy permit—for any business that violates local, state or federal law. The land use code angle is similar: the preclusive city or county ordinance would prohibit any use in violation of local, state or federal law.

It is critical for marijuana entrepreneurs to check and continuously monitor relevant city and county code for restrictive provisions. Note that many jurisdictions have begun to look into their local zoning laws post HB 3400. Last week, I discussed the relatively benign zoning rules proposed by the City of Portland. Other cities, like Ashland, have developed more nuanced zoning restrictions, designed to keep dispensaries in high traffic commercial areas while roping off the city’s downtown. Many other jurisdictions, like Coos County, are currently working hard with community members to finalize zoning rules that are still very much up in the air.

When the dust settles on all of this local action (and even while it settles), HB 3400 requires that for each marijuana license application it receives, the Oregon Liquor Control Commission (OLCC) must request a statement from the city where the applicant hopes to operate. In that statement, the city must explain whether the requested license is for a permitted or conditional use location. If the proposed use is prohibited in the relevant zone, the OLCC cannot issue a license. Applicants who do their homework on zoning should be able to avoid this fate.

As we wrote in June, we are finding that most members of local planning departments in Oregon are happy to help business owners (and even us lawyers) navigate local regulations. Subscribing to local government newsletters and attending city and county council meetings are key. This will help you stay abreast of updates to the rules and ensure that your interests are taken into account during the rulemaking process. That process is happening all over the state as we speak.