Deschutes County marijuana ban raises questions

A marijuana plant in Oregon. (AP file photo/Don Ryan)

In 2016, when Deschutes County legalized marijuana about a year after the state did, commissioners hoped local control over how and where it was allowed would be enough to bridge the gap between the industry and rural residents concerned about the affect of the newly legal crop.

But nearly three years later, commissioners instead have seen a long stream of complaints from rural residents and a lawsuit from the marijuana industry alleging the county’s regulations are unconstitutional.

The situation led the commission to make an unusual move: to reverse the 2016 decision and ask voters whether recreational marijuana growing and processing operations should be allowed. The question will be on the November 2020 ballot.

“This is the first time this has happened midstream that I can think of,” said Mark Pettinger, spokesman for the Oregon Liquor Control Commission. “Most of that activity has been cities and counties reversing themselves and opting in.”

But until voters decide, questions remain about how a permanent ban will affect the businesses that are here, and how the residents who rely on the jobs and tax revenue will be affected.

Overall, it is difficult to quantify the impact that comes from stymieing an industry artificially with a policy change. According to the OLCC, the recreational cannabis grown in unincorporated Deschutes County covers 320,000 acres and accounts for about 1% of marijuana production in the state.

The marijuana industry pays about $2.8 million in payroll to 380 employees in the county, said Damon Runberg, a state economist with the Oregon Employment Department. About 92 of those jobs associated with growing it.

While small, it is a sector of the industry that is growing, Runberg said. Jobs in growing marijuana have increased 17% since the same time last year.

“In general, it is small,” Runberg said. “And even if it’s going to grow a bit, we’re not talking thousands of jobs. Even if there is dramatic growth in the next two years, we’re still at less than 200 jobs.”

Some of the impact may not be seen for several years, said Joshua Lehner, an economist with the Oregon Office of Economic Analysis. As the marijuana industry matures, Deschutes County could be opting out of an opportunity to participate in the growing industry of marijuana-infused products.

“Longer-term, when cannabis is legalized elsewhere, firms in other states will turn to Oregon companies to help them get started, buy equipment, be cannabis business consultants, the like,” Lehner wrote in an email. “Plus, we could eventually export our Oregon-grown products to other states. This would make cannabis truly a traded-sector industry. We’re obviously a long way from this happening, but in terms of the economic impact, this is the hope.”

But local growers say there are multiple ways the decision will affect their businesses immediately — beginning with how the industry is perceived.

“Opting out of cannabis business in the unincorporated areas of Deschutes County singles out one type of farm crop, and it perpetuates the notion that cannabis plants that express higher THC content is a bad thing for our community,” said Lindsey Pate, who owns a craft cannabis farm in Terrebonne. “Our county commissioners are responsible for looking out for the needs of the whole county, not just a loud minority.”

Mike Hayes, owner of Miracle Greens in Bend, said perception matters when it comes to Deschutes County’s reputation in the market place.

And contrary to the assumption of some commissioners, eliminating competition in the growing sector does not help farmers, Hayes said.

“When you think of Napa Valley, what do you think of? Wine,” Hayes said. “There are lots of wineries, and that attracts more business. We want to be known as an area that produces good product. If we have two farms, that doesn’t put us on the map.”

Business owners are concerned about the consequences that come with the county no longer receiving state tax money from the marijuana industry. While the county has a moratorium — and beyond, if voters choose to keep it — the county will not receive about $300,000 this year in marijuana tax revenue, which supports, among other things, one sheriff position dedicated to investigating illegal marijuana activity.

“As a resident, I want to know the additional deputy they’ve put on staff for the year … is being paid for by the cannabis industry,” Hayes said.

Another consequence, if the ban sticks, is that people who own growing and processing operations today will not be able to sell their business unless the new buyer moves the facility into a city or county that allows for it, according to the OLCC.

This feeds into Hayes’ other concern that the ban will drive out legal business and open the door for black market competition.

“You can be here, but you’re not welcome here … that’s the feeling,” Hayes said. “I think that’s why you are going to see a lot of people get out of it and convert to hemp and other things.”

— Reporter: 541-633-2160,

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