After Oregon voters legalized recreational marijauna under state law in November of 2014, legislative leadership established a Joint Marijuana Committee to tackle all of the challenging issues around regulating cannabis in the face of federal prohibition. The committee consisted of a bipartisan group of five Senators and five Representatives. Over the course of three legislative sessions, the committee oversaw the rewriting of virtually all of Oregon’s cannabis laws. Association of Oregon Counties (AOC) Legal Counsel, Rob Bovett worked extensively with committee members and other key stakeholders on the crafting of numerous pieces of cannabis legislation.
The 2019 Legislative Session represents the first full session in which the committee no longer exists. “Now that we are well past half way through the session, it has become crystal clear that it was a mistake to terminate the committee,” said Bovett. “Cannabis bills are now scattered among many different legislative committees, many of which have no background or experience with cannabis policy. It’s chaotic, at best.”
With Oregon continuing to be under heavy federal scrutiny, and leaking massive amounts of cannabis into the illegal interstate black market, big policy bills to address that situation are not even in play. Instead, there are a number of bills in process that skirt around the issue. Here is an update on some of the key bills, and their status:
Senate Bill 218B is in trouble again. The bill that permits the Oregon Liquor Control Commission to temporarily stop issuing new production licenses because the state has six and a half years worth of marijauna already backed up in the system. At first attempt to move through the Senate chamber, the bill failed on the Senate floor, but was resuscitated after a sunset was amended into the bill. SB 218B is now in House Economic Development, where it has an uncertain future.
Funding for Enforcement
It appears unlikely that the 2019 Legislature will address the lack of adequate funding for code and law enforcement to address the serious leakage and other issues associated with the cannabis industry. AOC proposed House Bill 2382 to permit certain high marijuana production counties to impose a production tax to support enforcement activities. The bill was heard in committee, but was scheduled for no further action and died at the first policy deadline. On a positive note, there are discussions occurring about amending the state retail marijuana tax distribution formula to direct more funding for enforcement.
Stepping on Counties Yet Again
In an effort to cover some of the economic costs associated with marijuana production facilities, Deschutes County imposes transportation systems development charges (SDCs) to offset some of the impact. However, the Oregon Farm Bureau is successfully promoting Senate Bill 365 to strip Deschutes County, and all other counties, of their ability to impose SDCs on marijauna production in exclusive farm use zones. The bill passed the Senate, and is now heading to the House floor, where it is also expected to pass. This is just another in a long list of examples of the state legislature taking away yet another revenue source for local governments already financially reeling from a laundry list of unfunded mandates, such as Public Employees Retirement System (PERS).
Senate Bills 420 and 975 were both recrafted by Bovett, and would simplify and expedite the process of setting aside old marijauna convictions that are no longer offenses, and reduce old marijuana convictions that are now lower level offenses. Both bills passed the Senate, and are scheduled for hearings and possible work sessions on May 21 in the House Committee on Judiciary.
Under federal and state law, hemp is cannabis and cannabis products that have less than .3 percent tetrahydrocannabinol (THC), the principal psychoactive constituent of cannabis. Marijuana is cannabis and cannabis products that have more than .3 percent THC.
The 2014 federal Farm Bill authorized states to conduct research on hemp by way of permitting hemp production. Oregon moved quickly to adopt legislation and implement a hemp program under the 2014 Farm Bill. Hemp has quickly become one of Oregon’s largest cash crops. However, over the past year it has also become clear that Oregon is now leaking large quantities of high THC hemp products into the interstate markets. This has not gone unnoticed by the federal government, who ask for periodic reports from the state about what it is doing to address its cannabis leakage problems. Bovett participates in those meetings on behalf of AOC.
At the April 17 meeting with the federal government, it became clear that Oregon now has two major cannabis leakage problems, those being marijauna and hemp. In the meantime, the 2018 Farm Bill permits states to license and regulate hemp, and engage in interstate delivery of hemp and hemp products, but only after the federal government certifies a state’s program as being in compliance with rules yet to be adopted by the Food and Drug Administration. The Oregon hemp industry has written a bill, House Bill 2740, with virtually no stakeholder input that would create a hemp commodity commission, but also rewrite Oregon hemp law in an effort to get Oregon law into synch with the 2018 Farm Bill. However, in the opinion of Bovett, it would fail to do so, put Oregon out of compliance with the 2014 Farm Bill, and exacerbate the leakage problem. It is hard to imagine a scenario where the federal government would certify such a program under the 2018 Farm Bill. A better answer would be to work on this issue in the interim.
The bill was advanced to the Joint Committee on Ways and Means.
Getting Oregon Ready for Interstate Sales
Following a stakeholder work group, Bovett recrafted what is now Senate Bill 582A, which has passed the Senate and is likely heading to the House Committee on Rules. The bill authorizes the Governor to enter into an agreement with another state for purposes of interstate sales between licensed marijauna businesses, as well as cross-jurisdictional coordination and enforcement. The bill will go into effect only if the federal government allows for interstate transfers.
“This is going to position the state of Oregon so we will be able to capitalize on this new legal market and that we will be in a position to be an exporting state to many locations that do not have the quality, quantity, or ability to provide the products that we already have, ” said Senator Floyd Prozanski (D-Eugene), as he carried the bill on the Senate Floor.
Contributed by: Rob Bovett | Legal Counsel