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Jackson County moves to tax pot

The Jackson County Board of Commissioners has given initial approval for a tax of up to 25 percent on medical and recreational marijuana.

If the board finalizes its approval on Nov. 5, county voters would then be asked to approve the new tax during a special March 2015 election. The tax would go into effect retroactive to Dec. 1 of this year.

Dozens of cities and counties across the state are racing to adopt local marijuana taxes before Oregon voters decide during the Nov. 4 election whether to legalize recreational marijuana. If approved, state Measure 91 would go into effect on Dec. 4.

Measure 91 would allow the growing, selling and use of marijuana by adults 21 and older. Only the state could tax marijuana, according to the measure, but local jurisdictions hope if they adopt their own taxes prior to Measure 91 going into effect, those local taxes could be grandfathered in.

The rate of Jackson County's marijuana tax would be set by the commissioners annually and could reach as high as 25 percent on sales of both recreational and medical marijuana. Medical marijuana is already legal in Oregon but remains illegal under federal law.

Marijuana producers would be charged $35 per ounce on marijuana flowers, $10 per ounce on marijuana leaves and $5 per immature plant. People would not have to pay taxes if they were producing medical or recreational marijuana solely for their own consumption. The taxes would apply only to unincorporated parts of the county, not inside cities. Many Rogue Valley cities are adopting their own marijuana taxes.

Oregon officials estimate a state tax on marijuana would yield $17 million to $40 million annually. Measure 91 allocates 40 percent of state tax revenue to schools; 20 percent for mental health services and alcohol and drug treatment; 15 percent to state police; 20 percent for local law enforcement and 5 percent to the Oregon Health Authority.

Jackson County officials said there are too many unknowns at this point for them to accurately estimate how much revenue a county marijuana tax could raise. They said marijuana use already puts added strain on law enforcement and health and human services in the county. A tax could help raise money to pay for services.

"We'll have additional costs. It's an opportunity to gather revenue," said Jackson County Commissioner Don Skundrick.

Skundrick voted with Commissioner Doug Breidenthal to adopt the marijuana tax. Commissioner John Rachor voted against the tax. He said he is opposed to legalizing recreational marijuana and doesn't think it's right for the county to make money off marijuana production and sales.

"If people wanted to legalize prostitution or slavery, would we say we want to get in on it?" Rachor asked.

Jackson County Legal Counsel Joel Benton said Measure 91 imposes no limits on the size of commercial marijuana grows. Skundrick said that could cause problems because commissioners already field complaints from county residents upset about odors and other issues related to their neighbors' medical marijuana grows. Marijuana plants can exude a strong skunk-like odor, especially as harvest time approaches.

If legalized, recreational marijuana would be seen as a for-profit farm crop and growers could open tasting rooms and farm stands, said Jackson County Development Director Kelly Madding.

Benton said if state voters reject Measure 91, the county could still move forward with adopting a local tax on medical and recreational marijuana.

"If Measure 91 doesn't pass this time, the issue will come up again in the state," Skundrick predicted.

Several candidates for Jackson County commissioner positions have said they expect the measure to pass and the county should prepare for changes and impacts. Commissioners Skundrick and Rachor are not seeking re-election on Nov. 4, and six candidates are on the ballot vying for those seats.

Reach reporter Vickie Aldous at 541-776-4486 or valdous@mailtribune.com.