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The Oregon Legislature’s joint House-Senate marijuana committee approved House Bill 3400, clarifying rules that would govern Oregon’s retail marijuana industry after possession of marijuana becomes legal on July 1. The bill lays out rules for growers and retailers and addresses a major point of contention between state and local government regarding regulation at the local level.

Not surprisingly, when Oregon voters approved Ballot Measure 91 last November, making recreational use of cannabis legal throughout the state, not everybody was on board. Several residents of the state’s rural eastern counties were opposed to legalized cannabis, and they have been working hard ever since to reserve the right to ban sales in their communities when the rest of the state goes green in July. House Bill 3400 grants them that power, provided that at least 55 percent of county residents voted against Measure 91 and legalization. That qualifies 15 counties to ban retail and medical marijuana sales. HB 3400 would allow a prohibition to be imposed at the discretion of legislators in these counties; in all other Oregon counties, voters would have to support any efforts to outlaw marijuana sales.

Though local control of marijuana sales was the most contentious issue debated by House-Senate marijuana committee members as they negotiated language for HB 3400, the bill also spells out other key elements of the regulatory framework for legal cannabis in Oregon. Production, taxation, advertising and product safety are all addressed in the bill.

oregonSeveral of the members of the Joint Committee on Implementing Measure 91 take testimony at a recent meeting. (Jeff Mapes|The Oregonian)

Legislators see black market availability of marijuana as an important obstacle to a functional regulated cannabis market. As such, HB 3400 takes steps to curb the possibility that growers might divert some of their crop to the black market, including strict adherence to a “seed to sale” tracking system that would in theory account for the whereabouts of plants at every step of the production process. Additionally, medical marijuana growers will have their current crop limits reduced, and retail growers will have to calibrate production to keep supply and demand roughly equal to prevent surplus product making its way outside the regulated retail market.

HB 3400 addresses the manufacture and marketing of cannabis with a requirement that processed goods display potency levels on their labels and undergo testing at certified laboratories to ensure they are free of dangerous contaminants. Marketing to minors and advertising that promotes unhealthy or excessive use of products will not be allowed.

Though the taxation framework has not been made final, retail shoppers will likely pay a 17 percent state tax on purchases. HB 3400 allows local governments to levy an additional 3 percent tax on top of state taxes.

Though the Oregon Liquor Control Commission, which will oversee recreational marijuana and have its regulatory powers expanded under HB 3400, has said that retail licenses for marijuana shops won’t be issued until late next year, HB 3400 lays the groundwork for a system of legal production and sales that is necessary if legal recreational marijuana is to succeed in Oregon.

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