Municipalities could be banned from taxing recreational marijuana if Ballot Measure 91 passes and legalizes the drug in Oregon.
Medford’s hard-line stance against marijuana could face its toughest challenge yet when voters decide Nov. 4 whether to legalize recreational marijuana for users age 21 and older.
Though the City Council earlier this year declared a permanent moratorium on medical marijuana, it is now exploring the idea of taxing cannabis. Councilors worry that pot could become legal under Ballot Measure 91, titled the Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act of 2014.
They fear municipalities won't be able to tax marijuana after November if the measure passes.
“They have to play ball now in order to get the money later,” said Richard Nuckols, owner of MaryJane’s Attic and Basement, whose business has been thwarted in its attempts to provide medical marijuana within the city.
Council President Daniel Bunn said he expects the council to pass some sort of tax in September as a defensive move in case the initiative passes.
“I don’t think there is any appetite on the part of the council to lift the moratorium,” he said.
Oregon rejected a previous marijuana legalization proposal in 2012, but an Oregon Public Broadcasting poll in May showed 54 percent of voters approve of legalizing pot.
This year's legalization measure has received some high-profile endorsements, including Richard Harris, the former director of the state's Addictions and Mental Health Services, and retired Supreme Court Justice R. William Riggs.
Also, many endorse the idea that the sale of marijuana would be tightly regulated by the Oregon Liquor Control Commission, which would grant licenses to store owners who sell cannabis.
New Approach Oregon has spent $1.1 million to promote the initiative and recently announced it was going to spend another $2.3 million on television ads.
New Approach doesn’t support local sales taxes on marijuana because the initiative would allow taxation at the state level to benefit schools, police and drug treatment programs, but wouldn't drive the price up enough to stimulate illegal sales.
“I do not support the precedent for establishing a sales tax,” said Peter Zuckerman, spokesman for New Approach. “The taxes are designed to minimize the black market.”
The initiative would allow a $35-an-ounce state tax on marijuana flowers. That amount is designed to put marijuana at a price point that makes it attractive to purchase at a retail level, Zuckerman said.
Any local tax efforts likely would face court challenges, he said.
A recent Oregon State University study estimated the taxes raised by the initiative could bring from $35 million to $110 million per year into state coffers.
Some communities locally, such as Ashland, Gold Hill and Central Point, already have passed taxes on marijuana. Mike Welch, owner of Puff’s Smoke Shop in Ashland, just reopened his medical marijuana dispensary after relocating about 500 feet down the road so he was more than 1,000 feet from a school.
Medford officials and other opponents of Measure 91 say it would run counter to federal law, which continues to list marijuana in the same category as heroin.
The Oregon District Attorneys Association has come out against Measure 91 and plans to invest in the No on 91 campaign.
“I’m not in favor of it,” said Rob Patridge, district attorney in Klamath Falls. “It’s not the right way to do it.”
Patridge, a Medford resident and former legislator, said he thinks marijuana causes developmental issues, and he’s concerned that long-term use could have other health impacts.
“From my personal experience, it makes people stupid,” he said.
Patridge is also chairman of the OLCC and says that despite his personal beliefs about the initiative, it has a good chance of passing in the state, following the lead of Washington and Colorado, which have both legalized recreational use of marijuana.
Patridge said he will put his own beliefs aside if the measure passes and will make sure that the will of the voters is carried out by the OLCC. He wants to make sure all sides get a chance to weigh in on its implementation.
The OLCC will talk with stakeholders and community members as the administrative rules are developed over a one-year period.
“If it passes, it’s critically important that law enforcement has its feet at the table,” he said.
Oregon will look to Colorado and Washington to see how best to carry out the legalization, Patridge said.
“It will get dumped in our lap, and we have until January 2016 to put the process in place,” Patridge said. “If it passes, I’m going to have to deal with it.”
The Legislature also could make tweaks to the marijuana act in 2015, prior to its full implementation, Patridge said.
Some have suggested that the number of marijuana stores licensed by the OLCC could be roughly equivalent to the 248 liquor stores in the state, but Patridge said he sees nothing in the initiative that calls for an upper limit.
At this point, it is unclear how many marijuana stores may want to set up shop in Jackson County or in Medford, where there is pent-up demand after the city declared its moratorium. The city had about a half dozen outlets for medical marijuana before police and city officials began cracking down.
To prepare for Measure 91's possible passage, the OLCC has begun looking at the network of individuals involved in bringing marijuana to market.
“We have been taking it upon ourselves to educate ourselves about the industry,” said Christie Scott, spokeswoman for the OLCC.
She said OLCC is talking to growers, processors, retailers and potential new wholesalers.
“There are a lot of moving parts,” she said. “We’re pleasantly surprised at the caliber of the people that are involved.”
Many legislators, including state Rep. Peter Buckley, D-Ashland, have supported laws that decriminalize marijuana.
Buckley has touted Southern Oregon as an area that produces a lot of marijuana because of its climate and should take advantage of this opportunity, following the lead of the wine industry.
Buckley supports the ballot measure, saying it is well written and gives the state the opportunity to create legalization in a safe, thoughtful and “very Oregon way.”
“Prohibition has caused far more problems than it has solved, has cost us far too much, and it is past time to end it,” he said.
However, state Rep. Sal Esquivel, R-Medford, said he considers marijuana a gateway drug and will not be voting for the measure this November, although he does think there are legitimate medical reasons for marijuana use.
“Personally, I won’t support it, but I won’t stand on a street corner and object to it,” he said. “I think it has a very good chance of passing.”
Jackson County District Attorney Beth Heckert said she personally believes the cannabis initiative is not well-written and envisions it will create a host of new legal problems.
Medical marijuana laws still will be in place, which will create a confusing mixture of legislation, she said.
Heckert said passage of the initiative wouldn't have much impact on her caseload, since she doesn’t prosecute many criminal marijuana cases. For possessing less than an ounce, the citation is essentially like a traffic ticket, she said.
“You don’t get arrested on a traffic ticket or less than an ounce of marijuana,” she said.
According to statistics compiled by the Oregon State Police, Jackson County had the second highest number of citations and arrests for marijuana of the 36 counties in the state in 2010, just behind Lane County.
The Medford City Council has directed its staff to look at its own options, even as other cities in Jackson County pass ordinances that place a tax on marijuana.
Lori Cooper, deputy city attorney, said Medford will be looking at ways to create a tax, but the city still will have a major concern even if the initiative passes.
“Our argument is, it’s still against federal law,” she said.
Under a provision of the marijuana act, the city could try for a local referendum to determine whether Medford residents want to ban selling pot within city limits.
Some Medford councilors, who have been unanimous in their opposition to marijuana, face challengers running in November who have taken a position supporting cannabis.
Nuckols' wife, Marlene, is running for the council seat held by the late Karen Blair.
Richard Nuckols said he hopes the city passes some sort of tax on cannabis as long as it lifts the moratorium on medical dispensaries.
“Our primary interest is getting medical marijuana to the patients who need it,” he said.
Reach reporter Damian Mann at 541-776-4476 or firstname.lastname@example.org. Follow him at www.twitter.com/reporterdm.