Council approves ordinance requiring applicants to comply with federal laws

It could be a bit of a rearguard action, but the feeling among Wilsonville City Councilors when it comes to medical marijuana regulation is better late than never.

The council voted unanimously Thursday to approve an ordinance that prohibits the city from issuing a business license to any “person who carries on or engages in a business that is illegal under applicable city, state and federal laws.”

The ordinance is aimed squarely at preventing medical marijuana dispensaries from setting up shop in Wilsonville. With an emergency designation attached, it will take effect after a second reading at the council’s next meeting Feb. 3.

Councilors checked off several reasons why they aren’t keen on seeing medical marijuana businesses proliferate within city limits. They include the possibility of jeopardizing federal grant funding, public safety and even the slight possibility city staff could be prosecuted for abetting illegal activity.

“I realize the current administration has said they won’t be punitive or take those grants away,” said Councilor Scott Starr. “But they’re not willing to put it in writing, and that administration is going to change in a few years, so I’d be concerned about putting federal dollars we’re getting now in jeopardy if there was a more aggressive take from the federal government on this issue.”

Starr’s colleagues largely agreed. But what could make this a case of “too little, too late” for the city is Oregon House Bill 3460, which allows for formal licensing and regulation of dispensaries under state law. Formerly, dispensaries operated under something of a legal gray area, despite voter approval of the Oregon Medical Marijuana Program in 1998.

The new law takes effect March 1, after which dispensaries will be required to seek a license from the state similar to the license already required of medical marijuana patients and growers. Dispensary operators will have to pass criminal background checks, log the amount of marijuana at their businesses and verify it is from state-registered growers.

The facilities also will need to follow regulations for pesticides, mold and mildew testing. Each medical marijuana facility must pay a registration fee of roughly $4,000.

Despite that, Wilsonville officials say they do not want their city to become a destination spot for dispensaries or related businesses. They city has entertained inquiries about medical marijuana businesses, which led to the current debate. But no formal applications have been submitted to the city’s community development department.

City Attorney Mike Kohlhoff told the council that despite passage of the new ordinance, there would remain “ambiguities” in how to proceed on the subject of medical marijuana going forward.

On top of the March 1 date for the new dispensary law to take effect, federal policy on marijuana is likely to remain at odds with state laws for the immediate future. Despite the Obama administration’s stated hands-off policy with regard to the states of Washington and Colorado and their respective legalization efforts, Kohlhoff said this is just one variable in the equation that is subject to change in the future.

“We were worried about our federal contracts, but we have been told our federal grants will not be in jeopardy,” he said. “But this is only an oral position, and it’s as good as the current administration only. Should the administration change in the next election cycle it could leave everybody between a rock and hard spot, so we’ve looked at different ways of coming at this.”

Wilsonville’s effort is similar to the city of Gresham, which also passed an ordinance requiring businesses to comply with all local, state and federal laws. Others are trying to regulate dispensaries out of existence using specifically tailored zoning regulations. Kohlhoff said the latter concept was considered by the city but set aside because it is more likely to lead potential dispensary owners to sue the city for denying them the opportunity to take part in a business that is legal under state law.

“Some jurisdictions have come at this with zoning regulations, but I think that is fraught with more opportunity for litigation to occur,” he said. “I think if you’re going to control this in a way until it all sorts out — perhaps there will be an initiative in November — it is through the business license. It doesn’t guarantee there won’t be litigation, but we know a number of jurisdictions have adopted this approach.”

Ordinance 734 will now take effect under an emergency designation following the council’s second reading of the bill, scheduled for its Feb. 3 meeting at Wilsonville City Hall. After that it will remain in effect regardless of what happens with state law, unless the council elects to reverse course.

“I think the policy with regard to medical marijuana in this state is very convoluted at this point in time,” said Mayor Tim Knapp, who noted the council’s action does not represent a long-term solution to the issue. “I don’t feel the need to be on the cutting edge of figuring that out. My sense is that state legislation is likely to occur either by our legislators in Salem or by citizen initiative by the end of this year. If any of those things happen, we’re talking about a relatively short term interim type of proposal.”

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