New state laws shield pot buyers from the feds
A new state marijuana law designed to protect customers from federal prosecution already is changing the nature of sales at dispensaries, including those in Newberg and Dundee.
Effective when it was signed by Gov. Kate Brown on April 19, Senate Bill 863 prohibits dispensaries from recording, retaining or transferring the names or other identifying information of customers who purchase marijuana.
The regulation is one of several new state laws designed to shield the cannabis industry from a potential federal crackdown on the state's legal market and to refine overall rules governing the industry.
"Changes seem to be occurring on a daily if not an hourly basis on the federal side, and I personally am very concerned that we give as much protection to Oregon citizens to ensure their personal identification information isn't compromised, through some kind of federal subpoena or some other act, that a business is not going to have the fortitude or maybe the legal basis that the state would have to fight those type of requests," said Sen. Floyd Prozanski (D-Eugene), a chief sponsor of SB 863.
The absence of customer records would hinder authorities from prosecuting buyers for federal marijuana crimes.
U.S. Attorney General Jeff Sessions has publicly disagreed with the Obama administration's acceptance of state marijuana programs, which violate federal law. In May, Sessions wrote to Congress asking it to scrap a budget amendment in effect since 2014 that effectively shields state medical marijuana programs from federal prosecution.
Sessions' comments on marijuana prompted Prozanski to add an emergency clause to the Senate bill, making it effective upon passage.
Rep. Ann Lininger (D-Lake Oswego), a lawyer who is co-chairperson of the Legislature's Joint Committee on Marijuana Regulation, said other new laws also aim at fortifying the industry against federal backlash.
Senate Bill 1057 allows recreational marijuana retailers to quickly switch their adult-use recreational licenses to a medical-only license in case of "federal obstacles," Lininger wrote in a memo on new cannabis laws. The law assumed that Congress would continue the budget legislation, known as the Rohrabacher-Farr amendment, to prohibit the federal government from spending money to interfere with medical marijuana programs.
The bill mandates that medical cannabis producers, processors, wholesalers and dispensaries undergo the same stringent seed-to-sale tracking of products that the recreational industry has been subject to since recreational sales were legalized.
The bill also directs state regulators to create a database of anonymized medical marijuana transactions to help detect and prevent diversion of product into the illicit market.
An analysis by Oregon State Police earlier this year showed product is making its way into the illegal market.
"Anything we can do to cut off leakage ... would put us in a stronger position" with the federal government, Sen. Ginny Burdick (D-Portland), co-chairwoman of the marijuana regulation committee, said in May.
House Bill 2198 gives the Oregon Liquor Control Commission additional authority to respond to applicant or licensee misconduct. Another new law, Senate Bill 56, allows the liquor control commission to immediately suspend any licensee who has transferred product into the illegal market. The bill also orders the creation of a state hotline where local authorities can verify whether a grow site is registered or licensed.
Oregon is one of eight states, plus the District of Columbia, that have legalized recreational adult use of cannabis. Twenty-one other states have legalized medical marijuana.
Despite local efforts to protect the industry, the federal government may not need states' cooperation to enforce the federal ban.
The U.S. Department of Justice could shut down the marijuana industry through the federal courts, according to Mark Kleiman, a professor of public policy at New York University. The federal government would only need to obtain copies of marijuana license applicants and seek an injunction against the applicants from selling cannabis, Kleiman added.
Such a shutdown would likely revive Oregon's illegal market, wipe out 12,500 jobs and drain state coffers of a projected $105 million in annual recreational marijuana tax revenue, used to support public education and services, Lininger said.