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Recreational marijuana industry to expand in Grant County

Questions remain following vote overturning ban.
Richard Hanners

Blue Mountain Eagle

Published on May 29, 2018 4:58PM

Marijuana businesses will soon be legal in Grant County.

EO Media Group/E.J. Harris

Marijuana businesses will soon be legal in Grant County.

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Haley Olson stands in front of the safe that stores medical marijuana products at the Rocky Mountain Dispensary near John Day.

The Eagle/Richard Hanners

Haley Olson stands in front of the safe that stores medical marijuana products at the Rocky Mountain Dispensary near John Day.

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Fifty-three percent of Grant County voters recently overturned a ban on recreational marijuana businesses, but how the new industry will look is not entirely clear at this point.

With 3,179 votes cast in the May election, a total of 1,687 voted to repeal the ban and 1,492 voted against. Grant County Clerk Brenda Percy said the election results would be certified by June 4 at the latest.

The ban was put in place by the Grant County Court in 2015 following passage of Ballot Measure 91 by 56 percent of Oregon voters in 2014, allowing marijuana businesses. An initiative to overturn the county ban was defeated in May 2016 by a 1,689 to 1,469 vote. The court amended the ban in September 2016 to allow registered patients to purchase medical marijuana.

Expanding business

Rocky Mountain Dispensary has been selling medical marijuana just outside the John Day city limits in the city’s urban growth boundary since June 1, 2017. All cities in Grant County ban the sale of medical or recreational marijuana inside their city limits, including John Day.

Both attempts to overturn the Grant County ban were led by Haley Olson, whose family owns Rocky Mountain Dispensary. The language of the measure filed by Olson Jan. 18 calls for allowing producers, processors, dispensaries, wholesalers, labs and research businesses licensed by the Oregon Liquor Control Commission and the Oregon Health Authority to operate businesses in Grant County.

The measure also states that Grant County “shall immediately notify” the OLCC and OHA upon passage of the measure “so both agencies can immediately begin issuing licenses to Grant County businesses.” Olson’s mother, Cindy Kidd, told the Eagle that language was added to ensure county staff processed applications in a “reasonable time.”

OLCC spokesman Mark Pettinger said the licensing process would take four to six months.

Kidd said Rocky Mountain Dispensary plans to expand their business to include recreational marijuana sales in the same building where medical marijuana is sold. Medical marijuana customers must be 18 or older and provide a card showing they are registered with the state, while recreational marijuana customers must be 21 or older.

Kidd said the company plans to offer a wider variety of products and to continue to grow marijuana at their other location. She said “quite a few” marijuana growers are already in the county, but with passage of the measure overturning the ban, she knew only of locals interested in growing, including hemp, but not opening dispensaries.

Kidd said she wasn’t surprised by the election results and gave kudos to her daughter for a successful campaign. Supporters of the measure said overturning the ban would increase tax revenue to the county and create new jobs. Kidd said she was looking forward to growing the market.

“It’s more than just growing and processing and dispensaries,” Kidd said. “It’s website design and sales programs and other things.”

Regulatory hurdles

Medical and recreational marijuana businesses must comply with a long list of regulations, which range from background checks and strict business practices to special security measures and product safety rules. Growers must prove they have a legal source of water.

With certain exceptions, a marijuana dispensary cannot be located within 1,000 feet of a school or in an area zoned exclusively for residential use. Applicants for a state marijuana business license must produce a land-use compatibility form signed by the local jurisdiction.

While growers can set up business in Grant County’s vast agriculturally zoned land, dispensaries are mostly limited to the urban growth boundary areas adjacent to some of Grant County’s cities.

Grant County Planning Director Hilary McNary said a small urban growth boundary exists next to Seneca, and Prairie City’s urban growth boundary is the only one in the county that a city government administrates.

The John Day urban growth boundary is administrated by the county under an intergovernmental agreement. The city can review and comment on development requests, but the final decision is made by the county.

The goal of the urban growth boundaries is to promote orderly development with the expectation that a city may one day annex the area into the city. But with a ban on marijuana businesses inside the John Day city limits, annexation of a property with a marijuana business could create a conflict.

This situation arose in October 2016 when Rocky Mountain Dispensary applied for a land-use review for their medical marijuana dispensary. In his comment, John Day City Manager Nick Green stated, “The city will not support the extension of city services or the annexation of the property into the city of John Day for so long as the prohibition remains in effect and/or the use and activities continue to occur on the subject property.”

When asked by the Eagle about Rocky Mountain Dispensary’s future plans, Green said, “The city does not intend to take a position on recreational dispensaries in the urban growth boundary.”

McNary noted that a county court decision is not required for Rocky Mountain Dispensary to start selling recreational marijuana at its current site, and the matter may not go to the county planning commission.

She also said, if the business goes into an existing building, there is no requirement to notify nearby property owners. That was the case with the medical marijuana business, she said. But other questions remain about how state marijuana laws mesh with local laws, McNary noted, and the county may need to update its zoning regulations in the future.

Tax benefits

According to state law, a 17 percent base tax on recreational marijuana sales is collected by the state on the retail sales of leaves, flowers and immature plants; edibles, concentrates and extracts; products used on the skin or hair; and other cannabinoid products.

The revenue is distributed by the state, with 40 percent going to the Common School Fund, 20 percent to the mental health, alcoholism and drug services, 15 percent to the Oregon State Police, 10 percent each to cities and counties that allow recreational marijuana businesses for enforcement of the state’s marijuana laws and 5 percent to the Oregon Health Authority for alcohol and drug abuse prevention programs.

Cities and counties can tack on another tax up to 3 percent by referring the ordinance to local voters at the next statewide election. The local governments can use the revenue as they see fit.

Grant County Judge Scott Myers told the Eagle he intends to seek a 3-percent tax on sales of recreational marijuana. He said he would like to see the tax revenue used to offset any legal costs resulting from overturning the ban.

While Oregon law allows marijuana businesses, it remains illegal under federal law. In a memo released May 18, U.S. Attorney for Oregon Billy Williams said his top priorities in enforcing marijuana laws will be threats to public safety and interstate trafficking.

Among his concerns were overproduction of marijuana in Oregon and its diversion across state lines; minors’ access to marijuana; marijuana violations that involved firearms, violence or threats to public safety; the involvement of organized crime; and protecting public lands and natural resources from growers’ consumption of water or use of pesticides.

Williams also said he would “not make broad proclamations of blanket immunity from prosecution to those who violate federal law.”


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