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New pot rules open door to companies outside state

Non-residents may be able to join industry after rules adopted by the Oregon Liquor Control Commission

Investors from outside Oregon may be able to join in the state’s nascent recreational marijuana industry under new rules adopted Oct. 22 by the Oregon Liquor Control Commission.

In deference to legislative leadership plans to lift residency restrictions on marijuana operations, one of the new rules allows the commission to keep license applications by nonresidents under review until 30 days after the 2016 session.PAMPLIN MEDIA GROUP FILE PHOTO - Much work remains - Temporary rules on grow sizes, security requirements and other aspects of recreational marijuana sales will take effect Jan. 1, but will be replaced by permanent rules by the end of June.

“The co-chairs’ intent is to change that residency requirement, but they also understand we can’t ignore it,” said commission chairman Rob Patridge. “They are worried about people losing their place in line for the application process. The compromise in this draft is if Legislature acts they won’t lose their place in line.”

The provision is one of a series of temporary rules that address license eligibility requirements, grow sizes, security requirements and other aspects of recreational marijuana. The rules take effect Jan. 1 and must be replaced with permanent rules by the end of June 2016.

During its 2015 session, the Legislature barred nonresidents from growing or selling recreational marijuana. Growers, processors, wholesalers and retailers are required to have Oregon residency for at least two years.

Critics of the restriction said the statute could hamper development of the industry and may be unconstitutional. Co-chairpersons of a joint legislative committee on implementing legalized marijuana wrote in an Oct. 9 letter to the OLCC that they want to pass legislation in 2016 to lift that restriction.

“Our own thinking on these issues has evolved over time,” the letter stated. “We now believe that broad residency requirements and significant limits on outside investment could do more harm than good.”

The letter was signed by state Sens. Ginny Burdick and Ted Ferrioli and state Reps. Ann Lininger and Carl Wilson.

Local limits on grow operations

OLCC’s temporary rules answered some, but not all, of the concerns of both industry and public safety. For instance, the rules allow retailers to deliver up to $1,000 of marijuana to primary residences. Meanwhile, retailers are prohibited from selling both recreational and medical marijuana from the same retail location because different agencies regulate each type.

Grow operations are limited to 10,000 square feet indoors and 40,000 square feet outdoors, but local governments may request a variance from the commission to allow a larger or smaller grow operation.

“Local government beyond that could come to the commission with a plan,” Patridge said. “I think that would alleviate some of the grower gripes about having the opportunity to grow a larger production.”

The rules also trigger a mandatory 30-day license suspension for selling marijuana to minors and require stringent security measures such as video surveillance.