A battle is brewing in Salem over whether Deschutes County should be allowed to levy the fees it uses to pay for growth on recreational marijuana growing operations.

On Feb. 28, the Senate Committee On Business and General Government held a public hearing on Senate Bill 365, which would prohibit local governments from charging system development charges — the charges Deschutes County and other entities charge on new development to pay for growth — on developments on farmland, including recreational marijuana operations.

The bill represents a pointed critique of Deschutes County, the only Oregon county to charge such fees on marijuana growing operations. The charges are one-time fees on new development to cover the cost of infrastructure, including streets, sewers and roundabouts.

County commissioners and officials testified that the charges reflect the cost of paying for the new industry’s impact on the county’s infrastructure. Losing the ability to assess those charges puts the county at a disadvantage when trying to respond to the impacts, they argued.

“We’ve put together a system, and this would basically throw it all out,” said Commissioner Phil Henderson.

Still, several committee members criticized Deschutes County specifically during the hearing, and indicated that their patience may be running thin with the county’s rules concerning marijuana, which industry advocates regard as the strictest in the state.

“There’s at least one county in the state that’s singling out cannabis-production businesses,” said Rep. Ken Helm, D-Beaverton. “I don’t think that’s fair. It’s not happening in the rest of the state.”

After Measure 91 legalized recreational marijuana in Oregon in Nov. 2014, Deschutes County initially opted out of recreational marijuana sales and production, citing the narrow margin of support for the measure in the county, and stressed the need for a set of time, place and manner restrictions.

When the county approved a set of rules guiding odor, noise and other factors that go into growing cannabis commercially, it also began charging SDCs on recreational marijuana growing operations when they break ground.

Chris Doty, director of Deschutes County’s road department, said the county charges $0.81 per square foot in SDCs, meaning that a 10,000-square-foot operation could expect to pay $8,100 in the fees. Doty said the county assesses fees according to a manual that notes how many car trips different types of development generate, from office complexes to mobile-home parks.

The long-illegal marijuana industry proved challenging to quantify. Ultimately, Doty said the county opted to use industrial warehouses as an analog, and noted that they generate about as many trips as two McDonald’s restaurants. He cited industrial indoor operations with break rooms, conference rooms and large parking lots for employees as evidence of the industry’s impact.

“This isn’t farming; this is marijuana,” Doty said.

However, members of Deschutes County’s cannabis industry criticized the approach as overly onerous. Andrew Anderson, owner of Plantae Health, which operates a large recreational cannabis operation near Alfalfa, said the county used the largest cannabis operation in the area as its sample to demonstrate that the industry has an out-sized impact. Because no other farm uses are subject to the fees, Anderson said he believed the county commissioners are singling out the industry.

“When not one other crop has ever been charged this, it’s pretty clear that it’s basically a tax,” he said.

Doty countered by saying other farm uses in Deschutes County don’t go through the same rigorous land-use process that recreational marijuana operations do, which allows county officials to ascertain the impact for additional development on the area.

“If you’re adding traffic, you should be paying an SDC,” Doty said.

This is far from the first time Deschutes County’s marijuana regulations have run afoul of pro-cannabis farming interests. After more than a year of discussions, the county commission finalized an updated set of marijuana regulations in November. The new rules prohibit marijuana production on multi-use agriculture lots and mandate a quarter-mile buffer zone between marijuana operations and schools, parks and other uses.

In February, however, Clifton Cannabis Law, on behalf of the Deschutes County Farm Bureau and the industry group Cascade Cannabis Association, filed a petition with the Oregon Land Use Board of Appeals challenging the new rules. Stephanie Marshall, senior attorney with Clifton Cannabis Law, said the petition argues that the county’s new rules unfairly discriminate against the industry by setting up rules that are almost impossible to follow.

“That’s singling out that crop also for differential treatment,” Marshall said.

After the petition was filed, Deschutes County decided to withdraw and revisit the challenged regulations.

Regarding SB 365, Henderson said the county is waiting to see whether the bill moves out of committee. He said he’s interested in sitting down with members of the Farm Bureau to discuss the rules, though he maintained they were fair to growers and rural residents alike. He pointed to the county’s record of approving marijuana-related applications, with only five having been denied, as evidence that the county’s approach works.

“It’s not like we’ve shut down the industry,” Henderson said.

— Reporter: 541-617-7818, shamway@bendbulletin.com

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