December 19, 2011

Are Oregon Medical Marijuana ‘Dispensaries’ Legal?

December 19, 2011
oregon marijuana

oregon cannabisBuying medical marijuana from a storefront dispensary is becoming common in Oregon, but is it legal?

If you are an Oregon medical marijuana patient, you no doubt have noticed that the medical marijuana scene is changing. Almost all of my Oregon Medical Marijuana Program (OMMP) friends are now members of ‘collectives’ or ‘clubs’ or ‘fill in the blanks.’ I still call them dispensaries because until someone can give me a decent explanation as to the difference between them all, I call them all dispensaries. I know it’s a no-no word in the industry right now, but if you exchange medical marijuana for currency, regardless of how many bells and whistles you have at your location, I put you all into the same category to minimize confusion. I’m sure many of you will blast me for that but if I referred to everything in the hip new labeling there would no doubt be confusion. A marijuana consumer in Oregon might not know what a ‘collective’ is, but they no doubt know what a medical marijuana dispensary is.

I have debated the topic of Oregon medical marijuana dispensary legalities with my friends to the point that they are tired of hearing it I’m sure. However, I would point out to them that they asked me if I thought they were legal, so they asked for it ha ha. Whenever I am determining if something is legal or illegal in Oregon, the best place to start is the Oregon Revised Statutes (ORS), because after all, that’s the law. I apologize to people that are thinking to themselves ‘duh,’ but 9 times out of ten when someone debates me they always point to a friend, or a news article, or something other than the ORS‘. News articles are great for getting hints to the investigation, or what previous similar cases have dealt with in the past, but they are far from fact.

There are two parts of the law that are the most relevant to the topic of medical marijuana sales in Oregon:

475.304 (7) A registry identification cardholder or the designated primary caregiver of the cardholder may reimburse the person responsible for a marijuana grow site for the costs of supplies and utilities associated with the production of marijuana for the registry identification cardholder. No other costs associated with the production of marijuana for the registry identification cardholder, including the cost of labor, may be reimbursed. [2005 c.822 §8; 2007 c.573 §2; 2009 c.595 §966]

475.316 (1) No person authorized to possess, deliver or produce marijuana for medical use pursuant to ORS 475.300 to 475.346 shall be excepted from the criminal laws of this state or shall be deemed to have established an affirmative defense to criminal charges of which possession, delivery or production of marijuana is an element if the person, in connection with the facts giving rise to such charges: (d) Delivers marijuana for consideration to any individual, even if the individual is in possession of a registry identification card;

To sum up, an OMMP patient can reimburse the medical marijuana grower for the costs of ‘supplies’ and utilities that were used to produce the medical marijuana. However, the medical marijuana grower can’t deliver marijuana for consideration (profit in anyway at all, not just money), even to another OMMP patient. Law enforcement will tell you that the law is very straight forward – if you sell medical marijuana in anyway, it’s illegal.

That’s what happened at the Wake ‘N Bake Cannabis Lounge in Aloha, Oregon earlier this year. The Washington County Sheriff’s Office sent in confidential informants that purchased medical marijuana for up to $180 per ounce at the dispensary. Prosecutors in court said that the prices were consistent with street prices for marijuana and therefore the owner of the dispensary was clearly profiting and in violation of Oregon law. Seems straight forward right?

Let’s examine the law, what law enforcement says about medical marijuana dispensaries in Oregon, and inject some legal logic to see what’s really going on here. Let’s start with the price of medical marijuana’s production since it’s legal to reimburse the medical marijuana grower for ‘supplies’ and utilities. Notice I keep using the term ‘supplies’ instead of supplies. That’s because supplies are a subjective term. Are we talking just fertilizer, or are we talking about every hose, bucket, light, etc? The fact is, it’s up to an attorney to argue in court what ‘supplies’ means. If someone is using the most high tech hydroponic set up on the market, it’s going to cost considerably more for the finished medical marijuana than if the medicine was grown using little to no nutrients and growing outdoors.

Also, the strain of medical marijuana that is being grown is a significant factor. Some strains are more sensitive than others and require a very controlled atmosphere around them, which can be costly. Some medical marijuana strains take longer to yield, yield less than others, and all the while require more light and love. Therefore it’s impossible for any law enforcement agent to apply a ‘one price fits all’ model to a medical marijuana dispensary. I know Southern Oregon outdoor medical marijuana costs very little to produce finished medical marijuana which is why it costs so much less than the highest grade of indoor hydroponically grown medical marijuana.

I have seen medical marijuana strains that required more light than anyone could imagine, slurped up expensive nutrients daily, and took almost half a year to finally produce the lowest harvest a person could imagine. Given, the people growing it were greenhorns and that led to a lot of their woes. However, from a purely Oregon law standpoint, that’s some very expensive yet perfectly legal medical marijuana. The grower of that medical marijuana could pass the direct costs to the patient, and the cost per gram could be in the realm of $10. Law enforcement would see that as blatant OMMP abuse, however, they would clearly be wrong.

I can’t speak for every owner at every medical marijuana dispensary in Oregon. To be honest, I have met several medical marijuana dispensary owners that are shady characters, are clearly breaking the law and have no compassion for OMMP patients. However, that doesn’t mean that all medical marijuana dispensaries in Oregon are illegal and that they are ‘delivering medical marijuana for consideration.’ The simple act of exchanging currency for medical marijuana is perfectly legal if there is no profiting.

Which leads me into the next part of this article – activities that are illegal under Oregon law. Most dispensaries charge either a ‘walk thru the door’ fee or a membership fee. The exchange that takes place at the cash register isn’t necessarily illegal, but the fees are. The argument that the owners will make is that the fees pay for the cost of running the operation. However, the word ‘consideration’ in the law means that anything above and beyond the cost of the medical marijuana production is illegal. Even a storefront, which is considered a benefit to the owner.

Another thing that I see that is troubling is most dispensaries are taking ‘donations’ from OMMP patients. My question is ‘when you are selling pounds a day, per gram, at roughly $10 per gram, that amounts to a lot of donations. What lucky charity is getting that significant amount of ‘donations?!’ Owners will inevitably say that the dispensaries themselves are non-profits, but it only takes a forensic accountant about ten minutes to see that the money is not going to needy causes. Part of it goes to the grower, and the rest goes into the pocket of the dispensary owner, which is not a charity. A person can’t start an entity, call it a non-profit, then keep any profits and call it ‘salary’ for running the ‘charity.’ That’s charity fraud and no judge or jury is going to see it any other way.

The only truly legal way that I see an Oregon medical marijuana dispensary operating legally is if the funds that pay for the building and utilities are derived from some other source other than the medical marijuana exchanges for currency. All of the money that is paid for the medical marijuana has to go directly to the grower, and nothing above and beyond the costs that they can point to as being ‘supplies’ or utilities. The grower can fluctuate their price accordingly, however, the dispensary itself cannot see any of that money. Otherwise law enforcement can go after fees or whatever else that is ‘consideration.’

Of course, all of this is really a moot point. There have only been two medical marijuana dispensaries raided (at least according to public reports, there’s rumors of other dispensary busts) in Oregon ever. Both of the medical marijuana dispensaries were in Washington County, and as any OMMP participant will attest in Washington County Oregon, the Sheriff’s Office there has been on a warpath against the Oregon Medical Marijuana Program for a long time. Laws are only as good as the enforcement behind them, so at the end of the day people are selling medical marijuana out of storefronts for outlandish prices in Oregon regardless if it’s legal or not. Soon, if not already, there will be so many medical marijuana dispensaries in Oregon that enforcement will be impossible.

To sum up, are Oregon medical marijuana dispensaries legal? If they only reimburse the medical marijuana grower for their ‘supplies’ and utilities, then yes. Anything above and beyond that is hazy at best, and I would personally say that anything more than reimbursing the grower for ‘supplies’ and utilities is illegal. I’m not saying that I believe that’s how it should be, because after all, I have fought very hard to make marijuana legalization a reality, medical or recreational. I think it should be sold in stores like alcohol or tobacco and it would help our economy immensely. Hopefully this article goes the way of the dinosaur in the near future because marijuana will have it’s rightful place in Oregon law as a legal, viable cash crop.


Go to NotDwightHolton.Com to find out why you should not vote for Dwight Holton for Oregon Attorney General, and ‘like’ the Not Dwight Holton Facebook Page!


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