Though cannabis remains illegal as far as the U.S. federal government is concerned, laws regulating the drug on state and municipal levels have been rapidly evolving over the past several years. Dozens of states have legalized cannabis for limited (typically medicinal) use cases. A few have decriminalized it. And four states (Colorado, Washington, Oregon, and Alaska) have legalized it for recreational use. All told, 39 states have legalized cannabis in some form, according to a recent report by Ackrell Capital.
Even the federal government has taken a somewhat less restrictive approach. Though committed to enforcing the Controlled Substances Act (CSA, which makes marijuana illegal in the U.S.), the Department of Justice in August 2013 issued the oft-cited "Cole Memo," effectively admitting that it wouldn't intervene with state rules except in specific cases, for example the selling of drugs to minors, the funneling of revenue to gangs and cartels, or in cases where substances cross into border states with stricter rules.
Given all the complexity in U.S. law governing cannabis, things can be a bit confusing for your average smoker, not to mention for entrepreneurs hoping to capitalize on the emerging cannabis market.
The purpose of this series is to help demystify the legality of starting and growing a cannabis startup in various U.S. states. My last segment in this series focused on Washington. This segment is on Oregon.
The law: In 2014, Oregon voters successfully passed Measure 91, legalizing recreational use of marijuana, which would be regulated and taxed by the Oregon Liquor Control Commission (OLCC). The state's medical marijuana is regulated by the Oregon Medical Marijuana Program (OMMP).
Buying: Aside from receiving marijuana as gifts or growing their own plants (up to four plants per residence), adults aged 21 and up can purchase seeds, immature marijuana plants, and dried leaves and flowers from approved medical marijuana dispensaries.
You can possess up to eight ounces of usable marijuana in your home and up to one ounce in public.
Using: As in Colorado and Washington, it is illegal to use marijuana in public or in view of the general public in Oregon, including federal lands. That also includes the retail stores that sell cannabis products.
Essentially, you can use it on private property as long as no one else can see or smell it.
Business licenses: As in Colorado and Washington, only approved medical marijuana dispensaries can sell recreational marijuana in Oregon. As of June 24, 2016, there are 412 medical marijuana dispensaries in the state. The majority of these are registered to also sell limited amounts of recreational marijuana to non-medical marijuana patients.
The state offers several different kinds of business licenses. Individuals and businesses may hold multiple license types and licenses, and there is no limit to how many licenses the OLCC will issue. (In Washington, licensees can only hold one kind of license and the state has limited the number of retail licenses to 556.)
A producer is a grower of marijuana.
A processor transforms raw marijuana into another product (topicals, edibles, concentrates, or extracts).
A wholesaler buys marijuana in bulk and sells to licensees rather than directly to consumers.
A retailer sells marijuana directly to consumers.
A laboratory tests marijuana based on rules established by the Oregon Health Authority.
Each license costs $250 for the application fee and must be renewed annually. Additional license fees are as follows:
- Producer: $3,750 or $5,750, depending on size of plot
- Processor: $4,750
- Wholesaler: $4,750
- Retailer: $4,750
- Laboratory: $4,750
As of June 24, 2016, only 76 individuals or businesses have had their marijuana business licenses approved: 75 are producers and one is a wholesaler. Another 998 applications are in process, with most of these waiting to be assigned to an investigator or awaiting local government review:
Retail store licensing isn't slated to begin until October 2016.
- Producers: 731
- Processors: 84
- Wholesalers: 58
- Retailers: 194
- Labs: 7
Finally, licenses are not transferrable. The state does allow licensees to propose changes to its corporate structure, ownership structure, or who has a financial interest in the business by submitting a form to the OLCC prior to making the change. A new application must be submitted for any licensee who has a change in ownership that is 51% or greater.
While most of the companies in Oregon's cannabis economy fit into the above categories as producers, processors, and retailers, there are several other companies taking the approach of serving the growing cannabis industry.
By Ronny Kerr - Vator TV/July 7, 2016
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