Recreational Marijuana: Oregon’s New Joint Venture

Posted on by Phil Querin

M.J.Measure 91 – High Times for Oregonians.  According to OregonLive.com, here, there are 23 states that currently have medical marijuana laws on the books. Oregon was one of them. On November 4, 2014, Oregon joined a smaller group of pot-friendly states (Washington, Colorado, Alaska, and the District of Columbia), to permit the recreational use of cannabis.[1]  I will leave it to the wordsmiths to explain how the term “recreational use” found its way into our lexicon when discussing the use of marijuana.  “Recreation” is the last thing one thinks about when taking a toke – or so I’m told….

State and Federal Laws. The Federal Controlled Substances Act, 21 U.S.C. § 801, et seq., says that marijuana is illegal to grow, process, distribute, and possess, even when state law authorizes its use. Furthermore, federal law supersedes state law where there is a direct conflict between them.  That would seem to suggest that federal law, being more restrictive, would trump Oregon law.  However, this is not the case.

HUD and the Oregon Bureau of Labor and Industries, both of whom enforce fair housing violations, including discrimination based upon disabilities, have taken a laissez faire, or “hands off” approach, i.e. they are not enforcing the laws at the current time.  Accordingly, it is my belief that on both a state and federal level, landlords may properly prohibit growing, processing, distribution and possession of marijuana, even though the user holds a valid medical marijuana card. This opinion was extensively covered in my two articles, here and here.

How Are Landlords Affected By Measure 91?  Now that Oregon has legalized recreational use of pot, how does this change the equation for landlords?  The short answer is that it does not change the issues.  If anything, dealing with the use of recreational pot is the easy part.  The substance can be controlled, should an owner so desire, by instituting changes to the rental or lease agreement, and/or instituting rules and regulations prohibiting the cultivation, processing, sale or use of marijuana in or on the rented property.

The issues surrounding the legal use of medical marijuana, i.e. by card-carrying tenants, remains the same, i.e. can a landlord prohibit it?  I believe the answer is “Yes.”  But before explaining how, let’s look at the new law that everyone is toking talking about.

Oregon’s New Marijuana Law. An interesting article gleaned from a website called “The Daily Chronic” contains and interesting, though not exactly unbiased, analysis of Measure 91, here.  What follows is a short summary taken from the longer article:

  • It passed by 57% to 43%;
  • Public consumption of pot is prohibited;
  • The Measure does not go into effect until July 1, 2015;
  • Until that time, possession of less than one ounce of marijuana remains a misdemeanor and is subject to a fine of up to $650;
  • You must be 21 or older to possess marijuana;
  • Homemade cannabis extracts (when made with solvents)[2] are prohibited, i.e. one may not produce, process, keep, or store them;
  • Up to 1 ounce of cannabis extracts are permitted, but only if they are obtained through a licensed retailer;
  • Cultivation of up to four plants per household is permitted,[3] but they may not be visible from a public space;[4]
  • The Oregon Liquor Control Commission (“OLCC”) is in charge of regulating commercial cannabis cultivation, processing and retail sales;
  • Of course, there is a tax levied on sales. It is paid by the producers;
  • There are four types of businesses Measure 91 will license:

o   Producers, who will cultivate the pot;

o   Processors, who purchase it from the producers and convert it into assorted products with names, colors, flavors, and scents, reminiscent of the UC Berkley campus circa 1968;

o   Wholesalers, who purchase the pot and pot products for sale to retailers; and

o   Retailers, who will sell directly to consumers.

As mentioned above, I believe that landlords may prohibit the cultivation, processing, retailing, selling and use of pot, in or on the rental property, regardless of whether the user has a lawfully issued marijuana card.  This can be done prospectively for new tenants, by including the prohibition in the rules and/or the rental or lease agreement.  It can also be done retroactively, by a change to an existing rental in a month-to-month tenancy. I believe a landlord might have a tougher time retroactively changing a fixed term lease which had not yet expired.  However, since most rental and lease agreements say the tenant must obey the law, and federal law says marijuana is illegal as a controlled substance, I suppose a brave landlord could try.

There are lawyers who may take issue with this interpretation, and that is their prerogative. My opinion is based upon the current state of the federal law which treats marijuana as a controlled substance and which trumps state law.  This is coupled with my understanding of Oregon’s Bureau of Labor and Industry’s interpretation of its enforcement powers according to the Oregon Fair Housing Council.  See link, here.  The upshot is that landlords’ prohibiting pot use, even to card-carrying tenants, is not currently being treated as a fair housing violation.  If that were to change, or the feds decided to legaliz pot, I would revisit my opinion. ~PCQ

[1] The World Health Organization defines cannabis here, as follows: Cannabis is a generic term used to denote the several psychoactive preparations of the plant Cannabis sativa. The major psychoactive constituent in cannabis is ∆-9 tetrahydrocannabinol (THC). Compounds which are structurally similar to THC are referred to as cannabinoids. In addition, a number of recently identified compounds that differ structurally from cannabinoids nevertheless share many of their pharmacological properties. The Mexican term ‘marijuana’ is frequently used in referring to cannabis leaves or other crude plant material in many countries. The unpollinated female plants are called hashish. Cannabis oil (hashish oil) is a concentrate of cannabinoids obtained by solvent extraction of the crude plant material or of the resin.

[2] For those truly interested in the extraction process using solvents, go to the following link, here.

[3] In other words, a four member household (all 21 or over) would not qualify for 16 plants.  The same rule applies to the right to possess up to one ounce of extracts. There is no multiplier effect.

[4] I suspect that in rental properties where the backyards are fenced, growing would be permitted so long as they were obscured from the streets and sidewalks.

 

 

 

 

 

 

 

 

 

 

Posted in Fair Housing, Federal Regulation, Landlord-Tenant, Legislation - Oregon, Marijuana, Miscellany, News You Can Use, Real Estate General, Real Estate Laws, Realtor Risk Management, Residential Housiing | Tagged , ,
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