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Oregon Liquor Control Commission will draw from liquor fund, repay with taxes on pot sales.

Oregon will draw up to $583,000 from its state liquor fund for start-up costs of regulating marijuana for recreational use.

Lawmakers voted Wednesday to approve what amounts to a loan, which will be repaid at 2 percent interest by the end of the 2015-17 budget cycle. The repayments to the Oregon Liquor Control Commission will come from state taxes it will impose on legal marijuana sales, which are scheduled to start in early 2016.

“We have to be careful about how this is implemented,” says Sen. Fred Girod, R-Lyons, one of the 20 members of the Legislative Emergency Board, which makes budget decisions between sessions. “But I do think we need to move forward.”

OLCC will get four new employees to help the agency put into effect Measure 91, which voters approved Nov. 4 to make Oregon the third state to legalize recreational use of marijuana.

Washington and Colorado did so in 2012, and Alaska also did so on Nov. 4.

Lawmakers themselves made no initial recommendation on OLCC’s request, so Rep. Peter Buckley, D-Ashland, proposed it and the E-Board passed it without dissent.

Although the measure takes effect July 1, OLCC has until Jan. 4, 2016, to gear up to accept license applications for cultivation, processing and retail sales of the drug.

OLCC Director Steve Marks said afterward the money will enable the agency to get started on a variety of issues stemming from the measure.

“They gave us the opportunity for six months to work on policy, and come back and talk about what else we need,” Marks says.

An array of issues

OLCC Chairman Rob Patridge says the five-member commission will face an array of issues, some of which can be resolved through rulemaking, such as locations where marijuana can be grown, processed, packaged and sold at retail — and how far they must be from schools or other places.

He said after the E-Board action he hopes the scope of proposed rules will be made known by Feb. 2, when lawmakers get down to business for their 160-day session.

Lawmakers plan a House-Senate committee to explore other legal questions, such as whether Oregon’s existing medical-marijuana system should be merged with the emerging system for recreational use.

Measure 91 made no changes in the medical-marijuana law, which voters authorized in 1998. Some legislators say they are dissatisfied with how medical marijuana is regulated.

“It’s like coming out of Prohibition,” says Sen. Alan Bates, D-Medford, referring to the repeal of a national ban on alcohol sales back in 1933, when OLCC was created to regulate state alcohol sales. “It’s time to recognize we have a problem.”

Other questions have been raised about whether cities and counties can impose taxes on retail sales in addition to state taxes authorized by the measure — many have done so already — and whether cities and counties get an alternative to the measure’s opt-out procedures for sales or other marijuana operations.

Under Measure 91, cities and counties can opt out only after 10 percent of registered voters petition to do so, and the question is put to an election. City councils and county commissioners cannot start the process themselves.

Legislative role

“All that would take legislative action,” says Patridge, a former state representative from Medford and the current district attorney of Klamath County. “It would be nice (for legislators) to make these decisions early so we can scale up.”

Patridge, however, says OLCC may weigh in on some of those issues — particularly as they affect agency responsibilities for tracking marijuana supplies and collecting taxes — as the commission considers its administrative rules to implement Measure 91.

Because Measure 91 is a law initiated by voters, it can be amended by lawmakers, as was the 1998 law authorizing marijuana for medical use. Although lawmakers have changed the medical-marijuana law, they have done so only after negotiation with various participants.

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