Marijuana Legalization in Oregon The Impact of Measure 91 & Its Legislative Amendments By Russ Belville – Executive Director Portland NORML

Topics to Address Details of Measure 91 that Make Oregon Different From Other Legal Cannabis Marketplaces State v. Local Law Conflicts Shape Legislation Outcome of Legislative Amending of Measure 91 What Will Happen to Medical Marijuana in the Wake of Measure 91 and its Amendments? How Will Commercial Cannabis and Industrial Hemp Co-Exist Under Threat of Cross-Pollination? What Can Registrants/Licensees and Their Counsel Expect from Measure 91?

Measure 91 vs Other States Legal Status Oregon 2014 Washington 2012 Colorado 2012 Alaska 2014 Public MJUp to 1oz Private MJUp to 8ozUp to 1oz Results of Harvests Up to 4oz (Ravin v Alaska) EdiblesUp to 1lb Up to 1oz in the edible TincturesUp to 4.5pt Up to 1oz in the tincture Extracts (not glycerin?) Up to 1oz (Store-Bought) Up to ¼ozUp to 1oz Concentrates (not Extracts?) As Marijuana?Up to ¼ozUp to 1oz Plants4 / house 3 mature 3 immature 25 / house (Ravin v Alaska)

HB 3400A Possession Updates Legal Status Oregon 2014 Washington 2012 Colorado 2012 Alaska 2014 Public MJUp to 1oz Private MJUp to 8ozUp to 1oz Results of Harvests Up to 4oz (Ravin v Alaska) EdiblesUp to 1lb Up to 1oz in the edible TincturesUp to 4.5pt Up to 1oz in the tincture Extracts (solvent) Up to 1oz (Store-Bought) Up to ¼ozUp to 1oz Concentrates (non-solvent) Up to 1lbUp to ¼ozUp to 1oz Plants4 / house 3 mature 3 immature 25 / house (Ravin v Alaska)

Measure 91 Commercial Business Entities Oregon 2014 Washington 2012 Colorado 2012 Alaska 2014 ResidencyOpen to All3 Months2 YearsOpen to All Producer (Plants) $250 App $1,000 $250 App $1,000 $5,000 App $2,200-$8,000 Up to $5,000 Processor (Products) $250 App $1,000 $250 App $1,000 $5,000 App $2,200 Up to $5,000 Wholesaler $250 App $1,000 Retailer $250 App $1,000 $250 App $1,000 (334) $5,000 App $3,000 Up to $5,000 Taxation $35/oz Flower $10/oz Leaves $5 / Seedling 25% Producer 25% Processor 25% Retailer +State & Local 15% Excise 10% Sales +State & Local $50/oz

HB 3400A Commercial Updates Business Entities Oregon 2014 Washington 2012 Colorado 2012 Alaska 2014 Residency 2 Years (until 2020) 3 Months2 YearsOpen to All Producer (Plants) Cost-based Fee Tiered System $250 App $1,000 $5,000 App $2,200-$8,000 Up to $5,000 Processor (Products) Cost-based Fee $250 App $1,000 $5,000 App $2,200 Up to $5,000 WholesalerCost-based Fee RetailerCost-based Fee $250 App $1,000 (334) $5,000 App $3,000 Up to $5,000 Taxation 25% Temp Tax, 17% Retail Excise Tax ≤3% Local Tax Directed 37% Retail Excise Tax +State & Local 15% Excise 10% Sales +State & Local $50/oz

Measure 91 Depenalization Possession Limits (21+) LEGAL Class B Violation Class B Misdemeanor Class C Felony Public MJUp to 1ozUp to 2ozUp to 4oz4oz or more Private MJUp to 8ozUp to 1lbUp to 2lb2lb or more Edibles and Concentrates Up to 1lbUp to 2lbUp to 4lb4lb or more TincturesUp to 4.5ptUp to 1gal 1ptUp to 2gal 1qt 2gal 1qt or more Store-Bought Extracts Up to 1ozUp to 2ozUp to 4oz4oz or more Homemade Extracts Up to ¼oz¼oz or more PlantsUp to 4 / houseUp to 8 / house8 or more

HB 3400A Depenalization Updates Possession Limits (21+) LEGAL Class B Violation Class B Misdemeanor Class A Misdemeanor Public MJUp to 1ozUp to 2ozUp to 4oz4oz or more Private MJUp to 8ozUp to 1lbUp to 2lb2lb or more Edibles and Concentrates Up to 1lbUp to 2lbUp to 4lb4lb or more TincturesUp to 4.5ptUp to 1gal 1ptUp to 2gal 1qt 2gal 1qt or more Store-Bought Extracts Up to 1ozUp to 2ozUp to 4oz4oz or more Homemade Extracts Up to ¼oz ¼oz or more (Class C Felony) PlantsUp to 4 / houseUp to 8 / house 8 or more (Class C Felony)

HB 3400A Depenalization Updates Oregon Law Class B Violation Class A Violation Class B Misdemeanor Class A Misdemeanor Class C Felony Import or Export For No Consideration For Consideration Unlawful Delivery Less than 5 grams Up to 1 ounce Over 1 ounce To <18 y.o. By >21 y.o. Unlawful Manufacture or Delivery within 1,000 Feet of a School Class A Felony Minor (<21) Access Attempt Minor (<21) Possession Less than 1 ounce Up to 8 ounces Over 8 ounces Minor (<21) Edibles Up to 1 pound Over 1 pound Minor (<21) Tinctures Up to 4.5 pints Over 4.5 pints

State Law vs. Local Option Measure 91 as Written State is sole taxation authority (just like liquor) Only a vote of the people can ban marijuana licensees (just like liquor) Oregon Medical Marijuana Program shall not be affected by Measure 91 Cities & Counties Wanted Grandfathering in local taxes passed before vote Councils & Commissions may vote to ban licensees without a referendum OMMP plant count reductions, record keeping and inspections, local dispensary bans remain until voted out

HB 3400A “Eastern Compromise” 15 Eastern Oregon Counties that voted >55% against Measure 91 are given 180 days to ban both recreational and new medical marijuana shops through a vote of the city council / county commission – Remaining western counties must still ban only through a vote of the people… as statewide election vote determined

New Definitions in HB 3400A Measure 91 “Extract” = solvents other than vegetable glycerin, such as butane, hexane, isopropyl alcohol, ethanol, and carbon dioxide “Concentrate” = mechanical or non-solvent – water, vegetable glycerin, vegetable oils, animal fats, isopropyl alcohol or ethanol – carbon dioxide, minus high heat or pressure “Extract” = solvent – butane, hexane, or propane – carbon dioxide, plus high heat or pressure “Immature Plant” = non-flowering

Advertising Restrictions Measure 91 Text allowed OLCC “To regulate and prohibit any advertising …by the medium of newspapers, letters, billboards, radio or otherwise.” HB 3400A allows OLCC “To adopt rules regulating and prohibiting …advertising marijuana items in a manner: – That is appealing to minors; – That promotes excessive use; – That promotes illegal activity; or – That otherwise presents a significant risk to public health and safety.

Prior Convictions vs. Licensing Convictions for marijuana cultivation older than two years can not disqualify applicant Convictions for delivery to a minor older than two years can not disqualify an applicant Measure 91 originally proposed a five-year cutoff date

Marijuana Producers Must be 21 and a 2-year resident (until 2020) OLCC cannot limit number, canopy, or weight of immature marijuana plants OLCC shall limit mature plant canopies in a tiered system with consideration of demand OLCC shall implement sliding fee schedule based on square feet or mature plants Sliding fee schedule does not apply to producers of immature plants only

Processors, Wholesalers, Retailers Must be 21 and a 2-year resident (until 2020) Extract processors, wholesalers, and retailers may not be in exclusive residential zones Retailers may not be within 1,000 feet of public, private, or parochial schools If a school moves in within 1,000 feet of a retailer, the retailer may stay Must abide by industry best practices

“Budtender” Permits OLCC may require training on – Checking identification – Detecting intoxication – Handling marijuana items – The marijuana laws – Public health and safety Criminal background check for felonies – Except cultivation or delivery over two years old Whistleblower and unionization protection

Regulatory Miscellaneous OLCC may require bonds & liability insurance OLCC shall develop “seed-to-sale” tracking Minors attempting to access marijuana items is a Class B violation, except decoys and 911s Gov’ts may adopt “time and manner” regs, but can’t limit licensees from being >1,000 feet from each other People may personally produce, process, and possess marijuana within 1,000 feet of a school

Regulatory Miscellaneous Marijuana crops = “farm use / farm practice” Cannabis seeds = “nursery stock” Mature marijuana plants may not be sold Marijuana, products, & concentrates must be produced, processed, & stored out of public view Prior convictions treated under new law, or Class C misdemeanor if now legal, for purposes of setting aside conviction

SB 460 “Early Sales” Three months from legalization to sales – Colorado = Twelve months – Washington = Eighteen months SB 460 would allow existing dispensaries to sell to all adults Oct 1, 2015 – Dec 31, 2016 – Adults limited to ¼ ounce flowers only – No extracts, edibles, or tinctures sales – May purchase up to four seedlings or seeds – Local governments may ban such sales – Sales would be tax-free, until…

HB 2041A “Marijuana Taxes” HB 2041 would set an early 25% sales tax paid only by recreational consumers – Tax begins at MedMJ dispensaries on Jan 4, 2016 – Tax reverts to 17% + HB 3400A’s ≤3% when retailers finally open, no later than Dec 31, 2016 – Localities that ban still get 10% city & 10% county share until July 1, 2017, when half-share is proportional to producer/processor/wholesaler licenses and half-share proportional to retailers

Medical Marijuana – Patients Vets with PTSD = $20 OMMP Card “A degenerative or pervasive neurological condition” is now a qualifying condition for OMMP Card Medical marijuana patients cannot be denied organ transplants (R.I.P. Jim Klahr) Hospice & palliative care centers may be designated as additional caregivers Patients may fully reimburse Growers

Medical Marijuana – New Items “Immature Plant” & “Concentrate” from recreational definitions New “Processors” designation Processors & Dispensaries must track transfers of items Inspections of Growers, Processors, Dispensaries Growers may opt-in to become Producers, if they meet recreational licensing criteria

Medical Marijuana – Tracking Growers must track possession and transfers – Monthly reporting and two-year record retention – Plant numbers (mature and immature) – Amount of leaves & flowers drying – Amount of usable marijuana 2-Year Residency for Growers, Processors, Dispensary Owners/Operators until 2020, plus background check – A/B Felony Schedule I/II = 2-Year DQ – Twice A/B Felony Schedule I/II = Lifetime DQ

Medical Marijuana – Grow Limits Cap on grow site mature plants – 12 plants in residential, 48 non-residential, with up to 6 plants per patient – Maintain up to 24 / 96 for current grows as of December 31, 2014 Cap on grow site possession – Indoor grows may possess 6lbs / mature plant e.g. 12 plant indoor residential max = 72lbs. – Outdoor grows may possess 12lbs / mature plant e.g. 48 plant outdoor non-residential max = 576 lbs.

Industrial Hemp Survives House Bill 2668 killed by Oregon Senate – Would have revoked 13 existing hemp permits and required all crops in ground to be pulled – Set moratorium on new hemp permits to 2017 – Ban hemp growing within 1,000 feet of a school Bill championed by outdoor Southern Oregon growers who fear cross-pollination Critics contend that Dept of Agriculture, not Legislature, should decide agriculture issues

What Can Licensees Expect from Oregon’s Marijuana Legalization? Somewhat cheaper and easier licensing than others Bureaucratic resistance outside liberal metro areas, possibly bans, restrictive zoning No “tied house” or “vertical integration” issues Massive crash in wholesale prices Huge tourist boost for Oregon Coast & Bend Cross-border traffic for Portland & Hood River Delivery opportunities for Eastern Oregon (but is that a “mobile premises” that OLCC may not license?) Future integration of commercial medical and recreational distribution channels

PortlandNORML.org