Oregon’s cannabis laws are both complex and in a state of flux. They are most easily discussed by compartmentalizing them into four broad areas: personal, medical, commercial and hemp.
Since July 1, 2015, possession of less than an ounce of marijuana by adults 21 years old and older is legal anywhere in Oregon, except that its use is prohibited in public places and in public view. Adults, at their home, may also lawfully cultivate four plants per household (again, out of public view), and they may lawfully possess all of the following:
Beginning Oct. 1, 2015, adults 21 years or older will be able to purchase up to one-quarter ounce (7 grams) of marijuana, immature (nonflowering) plants, and seeds from medical marijuana dispensaries. These purchases will be tax free until Jan. 1, 2016, and then be taxed at a rate of 25 percent until that law ends on Dec. 31, 2016. It is anticipated that adult use dispensaries will be up and running by then.
As of Aug. 1, 2015, most of this law is contained within Ballot Measure 91 (2014) as amended by HB3400 (2015). The law allowing adult sales at medical marijuana dispensaries is in SB460 (2015).
A person who suffers from a debilitating medical condition (from a limited list of mostly severe physical conditions and PTSD) and who has been so diagnosed by an Oregon licensed medical doctor or osteopath (an MD or DO) and who registers with the Oregon Health Authority is protected from arrest and prosecution under state laws so long as the patient with a registry identification card stays within the limits allowed, and does not do any of the prohibited things set forth in ORS 475.316. The limits are:
The patient can designate a caregiver and a grower who are similarly protected. Collectively, these three people may possess up to 24 ounces of “usable marijuana,” which includes hashish. A grower is only allowed to cultivate for four patients, but an unlimited number of patients may designate the same location for their growsite.
Irrespective of who cultivates it, the patient owns all the medicine, until March 1, 2016; beginning on that date, the patient may choose to give the grower the ownership of the medicine.
The patient may authorize himself or herself, or the caregiver or the grower to distribute any excess usable medical marijuana to a medical marijuana dispensary and be fully reimbursed. The dispensary, in turn, can reimburse the grower (who may also be the patient) and in turn be fully reimbursed by patients and their caregivers.
As noted above, an unlimited number of patients may designate the same location as their growsite. Responding to the emergence of commercial medical cultivation and concerns about leakage out of state and large growsites in urban areas, the legislature imposed the following changes, effective March 1, 2016:
Medical growsites will undergo a registration process starting March 1, 2016, which will include monthly reporting to the Oregon Health Authority on what is cultivated, possessed and distributed to patients and dispensaries.
The Medical Marijuana Act is codified beginning at ORS 475.300. Administrative rules can be found at OAR 333-008-0000. These laws were also amended by HB3400 (2014).
Most of the law regarding commercial licensing of adult use facilities is found in Ballot Measure 91 (2014), HB 3400 (2015) and future OLCC rules. The OLCC has announced that it expects to have draft rules ready by October 2015 and final rules ready by November 2015.
Effective Jan. 4, 2016, the Oregon Liquor Control Commission (OLCC) must accept applications for four kinds of commercial adult use licenses: Production, Processing, Wholesale and Retail. A person or business entity will be able to hold all four licenses or choose to hold less than all four types. Note that medical marijuana growers, by participating in the OLCC production rules, will become able to distribute marijuana to OLCC-licensed retail outlets. The Legislature imposed a 2-year residency requirement for applicants, which will be in effect until Jan. 1, 2020.
Industrial hemp is defined as Cannabis sativa with a crop-wide average THC concentration of less than 0.3 percent. Industrial hemp is an agricultural commodity with thousands of applications, including clothing, cosmetics, construction materials, food, fuel and paper. Production, possession and commerce in industrial hemp have been legal in Oregon since Jan. 1, 2010 (SB 676). In 2015, the Oregon Department of Agriculture finalized rules implementing the Oregon Industrial Hemp Program. The Oregon Department of Agriculture issues licenses to cultivate and process industrial hemp, as well as licenses to produce and sell agricultural hemp seed. Industrial hemp farmers are required to cultivate a minimum crop of 2.5 acres.
Industrial hemp growers and handlers statutes are codified at ORS 571.300 to 571.315. Administrative rules can be found at OAR 603-048-0010. These laws were amended by SB 881 (2015).
1. Even though the rules and limits described above are state laws, the legislature, for the first time since the end of alcohol prohibition, has allowed cities and counties to opt out of some of these statewide laws. The laws concerning adult use and cultivation, processing and retail sales, as well as medical processing and medical dispensaries can be banned. How? In counties where 55 percent of the people voted against Measure 91 (all counties east of the Cascades, except for Deschutes and Wasco Counties), if a city or county bans state-licensed marijuana businesses by Dec. 31, 2015, then the people would have to collect signatures and have an initiative election in November 2016. In counties where less than 55 percent voted against Measure 91, the ban is automatically referred to the people for a vote in November 2016.
2. Marijuana possession, cultivation and distribution and use remain illegal under federal law. The current policy of the U.S. Department of Justice is to discourage enforcement of the Federal Controlled Substances Act in those states that have enacted medical and/or adult use laws consistent with eight prioritized concerns of the federal government, so long as those laws are “robustly enforced.” In January 2017, a new president will be sworn in and federal policy may change.
3. Other federal law problems include the inability of marijuana businesses to be able to use FDIC-insured banks and their inability to deduct “ordinary and necessary business expenses” (except for the costs of goods sold) from their federal taxes.
This brief outline of the laws is just that, a brief outline. Consulting with an Oregon licensed attorney is strongly encouraged. Although penalties for noncompliance with what are complex regulatory schemes are becoming less severe, there is still a thin green line between being legal and being a criminal.
Legal editor: Leland R. Berger, with assistance from Courtney Moran on industrial hemp, August 2015