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Council approves recreational pot dispensaries

The Medford City Council has approved changes to zoning laws allowing the sale of recreational marijuana within city limits.

The council voted unanimously Thursday night with six members in favor to allow permits for Oregon Liquor Control Commission-licensed marijuana dispensaries in commercial areas zoned “community commercial,” "regional commercial" and "heavy commercial." Councilor Clay Bearnson recused himself from discussion as an Oregon Health Authority dispensary owner, and Councilor Chris Corcoran did not attend.

"I think these are the right zones," Councilor Daniel Bunn said.

Although the change to Medford's code was effective Thursday night, recreational marijuana in Medford won't be available immediately, according to Deputy City Attorney Kevin McConnell. Medical marijuana dispensaries licensed through the OHA aren't allowed to sell recreational cannabis within city limits, and current medical marijuana dispensaries in the city will need to turn in their OHA license and reapply with the city and the OLCC to sell in the more financially lucrative recreational market.

The change followed voters' narrow approval of marijuana sales within city limits by a margin of about 3 points in November.  Councilor Kevin Stine said the city's ballot measures — allowing retail sales, banning outdoor grows and approving a 3 percent sales tax within city limits — clarified residents' thoughts on legal pot after the 2014 passage of Measure 91, which legalized recreational marijuana in Oregon.

"The voters voted, and now we can move forward," Stine said.

Although the council discussed a Medford Planning Commission recommendation to make the permits temporary, members ultimately voted unanimously in favor of permanent permits on grounds that a conditional-use permit may not legally hold water. McConnell told the council he'd heard of no complaints about current medical marijuana dispensaries in the city. 

McConnell said he'd alert the OLCC this week that the city is now eligible for the state allocation of marijuana tax revenue from the state's 17 percent sales tax on recreational marijuana, estimating the revenue stream to be "substantial." 

"We were the biggest city to opt out," McConnell said. 

The council will vote on the implementation of the 3 percent sales tax Medford voters approved in November. Further improving the revenue stream for Medford is the fact that neighboring cities Shady Cove, Eagle Point, Central Point and Jacksonville banned marijuana dispensaries. 

The city's $100 business license makes it among the most pro-business areas to start a marijuana business, according to McConnell.

"We have all the room for these retailers," McConnell said.

Although the OLCC's tax allocation is currently based on population, the number of licensees will factor into the payout beginning in July 2017, according to McConnell.

— Reach reporter Nick Morgan at 541-776-4471 or nmorgan@mailtribune.com. Follow him on Twitter at @MTCrimeBeat.