County cannot tax pot growers

Published 11:36 am Tuesday, December 15, 2015

At a Grant County Court public hearing Dec. 9 about banning commercial marijuana operations, Janet Phillips said she uses medical marijuana to treat glaucoma and diabetic neuropathy. She said the commissioners did not seem to understand the medical uses of marijuana.

The second public hearing about banning commercial marijuana operations in Grant County drew a large crowd Dec. 9, but some of the arguments appear to be misleading.

After more than an hour of testimony, the commissioners agreed to continue the hearing at 2:30 p.m. Dec. 16 to provide time for more public comment and deliberation on the matter.

Although more people said they wanted to ban marijuana businesses than at the first hearing, the majority of the people who spoke said the ban was a bad idea, despite the fact 65 percent of county voters opposed recreational marijuana in 2014.

Most of the people argued that the county should not ban commercial marijuana growing, and many claimed the county could levy a 3-percent tax on growing operations. However, a policy analyst for Oregon Sen. Ted Ferrioli, John Day, said Dec. 14 that taxes can only be collected from retail marijuana sales to consumers.

The proposed ordinance would ban medical marijuana processing facilities and dispensaries and all recreational businesses — growing, processing, wholesale and retail. The ordinance would have no impact on a person’s legal ability to grow four plants per residence for personal use and to possess up to eight ounces at home.

If commercial operations are banned, the county is not entitled to any of the 17-percent retail marijuana sales tax collected at the state level, according to Andrea Chiapella, a policy analyst for Ferrioli and the Senate Republican Office. Currently, she said, there is no provision for a city or county to receive any of the state tax revenue unless all four recreational marijuana business categories are allowed, but it has been mentioned in committee hearings as something to discuss further.

Chiapella said a county or city may charge a 3-percent local tax but only on retail marijuana sales — not growing, processing or wholesale operations.

In June, Ferrioli sponsored legislation allowing governments to opt out of commercial operations by Dec. 27 if at least 55 percent of that county’s votes were against legalizing marijuana in 2014. The bill also allowed the governments to enact a temporary ban and refer the matter to the voters in November 2016 for a final decision.

At the second hearing on the ordinance to opt out — or ban commercial operations — Grant County Commissioner Boyd Britton, speaking as a citizen, said he believed the county should enact the ban while it has the opportunity.

“If we don’t do it now, we can never revisit it,” Britton said, adding the county could opt back in later.

Britton said he did not believe marijuana operations would be beneficial for the community. Kimberly resident Leon Skiles said he concurred with Britton.

Larry Vote, who owns a ranch in Kimberly, pointed out marijuana is still considered illegal by the federal government. He said people can already grow and use marijuana for personal use, and he did not believe commercial operations were necessary.

Sharon Livingston, Long Creek, said the percentage of county residents who voted against legalization in 2014 was significant and that the county should at least give the voters the opportunity to enact a ban in 2016.

County Judge Scott Myers said all eight counties adjacent to Grant County had passed similar bans, and he did not want the county to be known as the hub for commercial marijuana.

No one else at the hearing argued pot operations should be banned, but many said the county should allow at least some form of commercial operations.

Several people at the hearing stated their only request was for the county to allow the growing of marijuana — not retail sales. Jerry Russell, Kimberly, and Paul Cooper, Monument, who spoke at the first hearing, reiterated their concerns that the county should not prohibit them from growing a crop the state considers legal on their land.

Before the hearing, Tom Burns, who supervised the medical marijuana program at the Oregon Health Authority and spent six months directing the recreational marijuana program for the Oregon Liquor Control Commission, sent a letter to Myers on behalf of Portland-based marijuana-growing company Chalice Farms. He wrote the farm supported the ban on retailers, processors and wholesalers, but the company has been legally growing medical marijuana in Grant County and desired to grow recreational pot as well.

Burns attended the Dec. 9 hearing and answered questions from the commissioners. He said the law requires 24-hour video surveillance of grow sites and access roads and that police can enter the properties at any time without notice. He said outdoor sites are limited to one acre and must be fully enclosed by a fence at least eight feet tall. He said OLCC will not grant a growing license unless the county has approved a land use compatibility statement, for which the county can add additional stipulations, such as security and size requirements.

Burns said, in Portland, the application fee for the statement alone is $4,000. Burns said, with a 3-percent tax, the county could collect about $58,500 per acre of marijuana grown annually, based on conservative estimates. He said Chalice Farms owns four tax lots in Grant County, each of which could have a one-acre site. Further, he said each site would require about five full-time employees — each of whom must pass a state background check — with an annual salary of about $25,000 each.

“Chalice Farms is going to sell their product in Portland and on the west side,” he said. “What you have in front of you now is an economic opportunity … to say Grant County wants to allow growing of marijuana, growing in a process that Grant County governs and decides and controls.”

On Dec. 14, Burns said, although the county cannot directly tax marijuana growers, Chalice Farms would volunteer to pay a 3-percent fee to the county.

Canyon City resident Eva Harris said, although she was a medical marijuana user, she was not there to argue on her own behalf. She said marijuana is easily accessible by young people in school but the unregulated and untested substance can be dangerous. If marijuana dispensaries were allowed, she said, the drug would be safer because it would be tested for mold and pesticides.

“We tried prohibition,” she said. “People did not stop drinking alcohol. They made it and poisoned themselves.”

Canyon City resident Jerry Barrow said, with the amount of time at the hearing devoted to marijuana growing, the forum appeared to be driven by special interests.

“You’re throwing the medical patients under the bus,” he said.

At the previous hearing, Barrow argued many older marijuana patients would be forced to travel to Bend to procure their medicine if the county did not allow medical dispensaries.

Janet Phillips said she uses medical marijuana to treat glaucoma and diabetic neuropathy. She said she must receive an annual verification of her illness from a doctor to qualify for medical marijuana.

“You just don’t understand the medical side of it,” she said. “I don’t take it so I can get so high I can see unicorns. I take it for glaucoma.”

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