The Ins and Outs of Oregon’s Measure 91

Joining the landslide of political upheaval, voters in Oregon, Alaska, and Washington D.C. approved measures to allow and regulate the sale of recreational marijuana. Forging a new chapter in American judicial history, a total of 27 states and the District of Columbia have now passed measures legalizing, decriminalizing, or approving the medical use of cannabis. But as with any new frontier, the devil is in the details. Measure 91 is no small piece of legislation, and few voters should have to read the entirety of its 47 pages, the majority of which is dense legal definitions. This guide presents a practical outline of what Measure 91 means to Oregonians.

To quote the certified ballot summary, Measure 91 “allows possession, authorizes in-state manufacture, processing, sale of marijuana by/to adults; licensing, regulation, taxation by state; retains current medical marijuana laws.” Basically, Measure 91 means that within the state of Oregon, marijuana is just another controlled commodity, similar to alcohol. Quite similar to alcohol; the Oregon Liquor Control Commission will be in charge of the regulation and taxation of recreational marijuana.

But this is a summary. And Measure 91 is not entirely comprehensive, leaving a number of details to be resolved by the OLCC throughout 2015. The 47 page bill focuses on regulation, taxation, and safety, outlining a practical, reasonable system to manage marijuana as a tradable, consumable, regulated commodity. The following sections outline the key provisions of Measure 91.

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The Basics of Recreational Marijuana: When, Where, and How?

From July 1st 2015, anyone over the age of 21 and not incarcerated can grow, possess, and use cannabis and cannabis products, up to 8 ounces per household, or one ounce per individual in public. The private sale of cannabis remains illegal however. The commercial sale of cannabis is only legal under the auspices of the OLCC, through licensed marijuana retailers.

While individuals can grow possess and process cannabis, the production of cannabis extracts remains illegal. Marijuana extracts will only be legal when produced and sold in licensed shops. As to the where, individuals cannot smoke in public places, and the OLCC will outline which businesses can allow the consumption of cannabis.

While the ballots were counted and the ballot passed on November 4, 2014, the actual timeline of legal cannabis possession and sale is staggered. Once the election results are certified, December 4, 2014, the OLCC will begin outlining the details of full-scale marijuana regulation. Working with the Oregon Health Authority and the State Department of Agriculture, the OLCC will establish whatever rules and regulations are deemed necessary to carry out the implementation of retail recreational marijuana infrastructure.

The OLCC’s deadline to finalize their rules and regulations for marijuana is January 4, 2016. By this date, they must be prepared to accept and process business licenses, setting the wheels of legal marijuana commerce in motion. The OLCC has discretion to finalize its rules before the deadline, though the deadline can also be postponed if officials have not prepared an adequate system in time.

Medical Marijuana

Oregon’s Medical Marijuana Act was passed in 1996, one of the nation’s first. As such, it is an establishment of the state, already taxed and regulated by the Oregon Health Authority. As of October 2014, the Oregon Medical Marijuana Program allows over 100,000 licensed patients and caregivers access to laboratory certified cannabis, extracts, and products.

Measure 91 explicitly does not impact the established guidelines of the OMMP, securing the actions of all individuals in compliance with the Oregon Medical Marijuana Act, including patients, caregivers, retailers, processors, wholesalers and producers. Furthermore, the text of Measure 91 states that its guidelines “do not amend or affect in any way the function, duties, and powers of the Oregon Health Authority under the Oregon Medical Marijuana Act.”

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Marijuana Taxation

The tax system of Measure 91 is one of the key provisions of the bill, guaranteeing that tax revenue from cannabis sales benefits key public institutions, such as school and law enforcement. Furthermore it outlines a simple, equitable tax system. Simple taxes, especially on emerging commodities, promote new businesses and competition, resulting in better prices for the consumer and better quality product. For contrast, Washington’s recreational marijuana system is mired in taxes at every level of the industry, resulting in great disparities and extremes in price and quality.

Importantly, the state of Oregon will hold the exclusive right to tax marijuana. No local or municipal authority can levy or collect taxes on any marijuana product. Marijuana will be taxed exclusively at production. Correspondingly, all ‘marijuana items’, including flowers, extracts, and edibles, have already had tax assessed before processing or manufacture.

This excise tax is applied at a flat rate, as following:

(a) $35 per ounce on all marijuana flowers;
(b) $10 per ounce on all marijuana leaves; and
(c) $5 per immature marijuana plant.

Note: cannabis regulation and taxation applies only to licensed marijuana businesses. Homegrown marijuana and marijuana products will not be taxed in any form. But while homegrown cannabis and cannabis products are legal under Measure 91, the quantities are limited, and no homegrown product can be used commercially.

These tax rates will be adjusted every 2 years corresponding to the annual cost of living adjustment, or by state legislators at the recommendation of the OLCC for the purpose of maximizing revenue, preventing crime, or preventing access to youngsters.

The OLCC will manage these tax revenues, sending anything in excess of the Commission’s expenses to an Oregon Marijuana Account. The Oregon Marijuana Account will be a sort of bonus fund for government, supplementing but not replacing budgetary allocations. The money will be distributed as follows:

40% to the Common School Fund, a public hedge fund, the earnings of which go to schools.
20% to mental health/alcohol/drug services
15% to state police;
20% to local law enforcement;
5% to the Oregon Health Authority.

Legal Marijuana Businesses

Once the OLCC finalizes the commercial structure for recreational marijuana, they will begin accepting applications for business licenses. Measure 91 has enumerated 4 types of marijuana business, covering the cultivation, processing, and sale of cannabis by seperate, licensed business entities. The four types of business are defined as follows:

Measure 91 defines 4 licensed types of marijuana business:

Marijuana Producers grow marijuana for wholesale, producing flowers, trim, and clones.
Marijuana Wholesalers purchase marijuana and marijuana products to sell to retailers or processors.
Marijuana Processors produce extracts and products like edibles.
Marijuana Retailers are the only businesses licensed to sell flowers, edibles, and concentrates to consumers.

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Homegrown Marijuana

None of the OLCC’s complex regulations or taxes apply to homegrown marijuana or marijuana products. Measure 91 limits possession by household. Any one household can cultivate and store four plants, though they must be grown out of ‘public view’. A household can keep eight ounces of ‘usable marijuana’. Households are free to make edibles or drinks, but are prohibited from making extracts like hash or honey oil. Each household can have 16 ounces of solid marijuana products and 72 ounces of liquid marijuana products.

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Marijuana Regulation

The OLCC is the primary regulatory authority in the commercial production, processing and sale of recreational marijuana. While they will enumerate the details of their own remit through the course of 2015, (see timeline) Measure 91 outlines the basic structure of the OLCC’s authority and responsibilities.

While the OLCC, as a state body, retains most authority regarding marijuana commerce, cities and counties may regulate minor details of marijuana businesses, such as location, hours, or presentation. Localities can ban marijuana businesses entirely, if voted on in a public referendum, but this does not prevent individuals in those localities from possessing and using marijuana items legally obtained elsewhere.

The authority of the OLCC over marijuana is fairly similar to its authority over alcohol, if more involved with production. The OLCC will outline all the details of marijuana from production to retail sale, outlining quality and purity standards, such as requiring laboratory analysis of all retail products, and verifying the claims of any branding or advertising. The Commission can halt the sale of any product under review, or any brand not complying with OLCC standards for recreational marijuana.

One of the main concerns of Measure 91 is preventing access to minors. This will remain a priority of law enforcement, and Measure 91 mandates that no one under the age of 21 can possess or use cannabis, or work in any capacity at a licensed cannabis establishment.

While Oregon neighbors Washington and California, two states with significant legal cannabis industries, all marijuana sold in Oregon must be produced in Oregon; Measure 91 prohibits both the export and import of marijuana within the licensed system. As to private individuals traveling with marijuana between Oregon and Washington, this is still technically a federal crime, though outright possession is not (or will not be, in the case of Oregon) a crime. This detail will likely be clarified by the OLCC.

Other Fun Facts From Measure 91:

• Driving under the influence of marijuana remains classified as a DUI, though the OLCC has been tasked with studying the effects of marijuana impairment on driving ability.
• Retailers cannot sell marijuana items to anyone who is visibly intoxicated
• Marijuana products cannot be given away as a prize in any lottery, game of skill or chance, or in any form whatsoever
• Inmates of correctional facilities may not possess or use marijuana in any form.
• Marijuana paraphernalia, including anything used to grow, produce, process or consume marijuana, is now legally separate from drug paraphernalia.

Still not sure what the deal with recreational marijuana in Oregon is? The OLCC has all of the information you’ll need.

Additional image: Flickr

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