It’s been 19 months since Oregon voters comfortably approved Measure 91 legalizing recreational marijuana, but some growers and processors looking to start their businesses are struggling to find welcoming locales. (Jamie Lusch/The Medford Mail Tribune via AP)

It’s complicated: Marijuana growers, processors in Oregon face location woes

EUGENE, Ore. — As recreational marijuana cultivation emerges from decades in the shadows in Oregon, residents face a vexing challenge: Where will new licensed farms, processing plants and retailers be allowed to locate?

Banned outright in big chunks of the state, Oregon recreational marijuana facilities face a complicated patchwork of quickly drafted local land-use laws in areas such as Lane County.

Those local rules are, at times, viewed as too permissive by longtime residents suddenly confronted with the reality of a new marijuana farm or processing facility nearby, The Register-Guard reported. Commercial-scale marijuana producers, meanwhile, want to be able to proceed with their new business ventures without unreasonable hassles from neighbors or bureaucratic barriers from local officials.

Last December, Cassie Heckenkamp and Jeff Smith spent $920,000 to buy 19 acres of bucolic land off the McKenzie River east of Walterville.

Backed by several local and out-of-state investors, the couple’s plan was to start a 5,000-square-foot indoor commercial recreational marijuana grow in an old agricultural storage building and a 40,000-square-foot outdoor grow in an adjacent 16-acre field they have an option to buy. They would live on the isolated property, which is surrounded by mostly open fields and farms.

But less than two weeks later, the Lane County Board of Commissioners banned any commercial recreational marijuana cultivation on all land outside city growth boundaries that is zoned as rural residential. The board cited concerns about the crop’s odor and the crime the all-cash businesses might bring to rural areas. Heckenkamp and Smith’s new property — like about 68,000 acres across Lane County — is zoned rural residential. The board’s decision caught them by surprise and left their business plan in tatters. “I assumed that (the county) would be like Eugene,” says Heckenkamp, a 43-year-old who has operated big recreational marijuana grows in Colorado, where pot is legal, and medical marijuana ones in Arizona in recent years.

“Eugene has been very helpful in getting this industry off the ground. It just didn’t occur to me that the county would approach this this way.”

In Cottage Grove, meanwhile, a successful application for city approval of a small marijuana processing plant across the street from a popular downtown park has irked some city residents.

Using liquid carbon dioxide, Paul Hampshire and Ruby McConnell of Eugene plan to extract “essential oils” from cannabis on what has long been a vacant lot opposite Bohemia Park. They say they won’t sell any products on site and will screen the property from the street with a wooden fence and new trees and bushes.

Community backlash

Still, some nearby homeowners and backers of non-profit Bohemia Park — a former railway storage yard that now has a playground, picnic areas, paths and an amphitheater — are outraged about their new neighbor.

“It took us 25 years to convert three brownfields into a park for children and families in the heart of Cottage Grove. We did not do it to facilitate the manufacture, sale, distribution or use of drugs,” said Thomas Hoyt, a Bohemia Foundation board member. “The thought of a marijuana factory being across the street from Bohemia Park is repulsive.”

Responding to the community backlash, the Cottage Grove City Council is considering creating new buffer zones around schools and parks where no recreational marijuana businesses could locate — although the rule would not be applied retroactively.

It’s been 19 months since Oregon voters comfortably approved Measure 91, legalizing recreational marijuana. The new industry is now coming into focus. The Oregon Liquor Control Commission approved the first commercial-scale recreational-pot farms and processors, and hundreds more recreational-only retailers, or dispensaries, are set to open in the fall.

The state has approved many new regulations for the embryonic industry. But, in a key concession to Oregon’s cities and counties, the Legislature gave local governments significant power to decide where and how recreational marijuana businesses can operate.

Many conservative counties and cities simply banned all commercial recreational marijuana — farms, processors, and retailers — outright. In some other parts of the state — including Lane County — local governments have created a still-evolving patchwork of land use restrictions. In Lane County, more than 60 percent of people voted in favor of pot legalization.

That lack of uniformity is confusing and unfair, marijuana advocates say, and will hamper the new industry’s development.

But in some cases, residents directly affected by new recreational pot businesses feel that local laws are too permissive. They’ve begun to lobby for new restrictions.

“The local policy is all over the map,” said Michael Gelardi, a lawyer with the law firm Davis Wright Tremaine who focuses on land use issues. “From a regulatory standpoint, a lot of decision-making (by local governments) happened relatively fast. And then you have a public reaction to that. I think we’re going to see a lot of evolution (in the rules) over time.”

Gelardi compared the emerging recreational marijuana industry to wineries, which, as the industry burgeoned, lobbied for more uniformity in local regulations.

“We went through years of trying to set common rules statewide, so people would know what they could and couldn’t do,” he said.

“We have a Band-Aid … ”

Heckenkamp and Smith say they picked the property along the McKenzie River because it was so isolated. It sits behind a coded gate and down a half-mile driveway. Only three other homes are within a few hundred yards of the fenced field where they wanted to put their 40,000-square-foot outdoor grow — the largest the state allows.

The county’s ban on growing recreational marijuana on rural-residential land hasn’t entirely stopped them from growing marijuana. They now legally have 48 medical marijuana plants in the storage building, with lights and ventilation. The medical program allows them to have six plants for each of the six patients they serve and for themselves. They can legally sell any excess marijuana to medical-pot dispensaries.

But that’s tiny compared to the 900 plants they might have been able to grow if they were approved for an outdoor and indoor license, according to Smith’s estimates.

“We have a Band-Aid for a minute,” Heckenkamp said of their medical plants. “But I can’t make my living off medical marijuana.”

Cassie Peters, a Eugene-based lawyer, says the couple isn’t alone in this situation in Lane County. She said she knows at least five people whose plans for marijuana farms are on hold because of the county’s rural-residential ban.

By banning recreational marijuana in rural residential zones, county government is “forcing marijuana grows more into these industrial zones, which is going to be indoors in warehouses, which is so much more energy and input intensive and less sustainable,” Peters said. “That’s an important issue for people to realize.”

There are still plenty of rural areas in Lane County where recreational marijuana can be grown, outdoors or indoors. State law allows marijuana as an “outright use” on land zoned as exclusive farmland and different types of forestland. That means the county cannot restrict it. There are just under 200,000 acres of farmland in Lane County.

The county has already approved 35 recreational marijuana growing licenses in unincorporated areas, though the vast majority has not yet been approved by the state.

“Not a normal crop”

But rural residential lots are often attractive to prospective marijuana farmers because of their small size. It doesn’t make financial sense to buy a big plot of farm-zoned land for marijuana, because the state allows only one 40,000-square-foot grow — that’s just under an acre — per piece of property.

“If you’re going to be limited to 40,000 square feet, you don’t need 40 acres,” Peters said. “Having a 5-acre parcel makes more sense when you figure the cost of land.”

Recreational marijuana in rural residential zones has been controversial throughout the state, since these smaller lots tend to be clustered near other homes.

Among counties allowing recreational marijuana, Lane County is one of three, along with Jackson and Deschutes, to have banned all commercial pot growing in rural residential zones. Clackamas County has banned outdoor growing on rural residential land, but allows indoor cultivation.

Lane County doesn’t place any limits on any other crops that can be grown on rural residential land — though it does limit numbers of livestock.

At the December meeting at which the board approved the ban, Commissioner Jay Bozievich argued that recreational marijuana “is not a normal crop and cannot be treated that way.”

Bozievich, who represents a largely rural district, said that during his time in office he’s received many complaints about medical marijuana grows.

“That’s been one of my number one complaints every fall: odor and other conflicts with legal medical marijuana grows,” he said.

Because of banking restrictions, Bozievich added, recreational marijuana farms have to be cash businesses.

“The concern for neighbors … is that you’re holding a lot of cash on your property and it makes it attractive to the criminal element to access your property through theirs,” he said.

Other commissioners expressed some skepticism about the outright ban, but it ultimately passed 4-1, with Commissioner Pete Sorenson opposed.

Commissioner Faye Stewart apologized to Heckenkamp and others who had already made investments. But, he added, “We’ve had some overly ambitious people that have got out in front of the laws and done some things where they maybe should have been more prudent.”

Several commissioners at the December meeting pledged to create a task force to look into the rural residential pot land-use issue this year.

“I don’t think that’s just some nebulous promise,” Bozievich said at the time. “We’re making this in public, to a lot of people. So it’s pretty hard for us to back away from it.”

But at a meeting one month later, the board postponed the creation of that task force until at least one outdoor recreational marijuana growing season had passed.

“The county did say they were going to revisit this,” attorney Peters said. “And then at the next meeting, they said ‘We’re not doing it.’ I just think they lied.”

Smith, 45, said he understands the commissioners’ concerns about growing marijuana “on 1-acre lots right next to each other, where you have no choice but to smell it.” Marijuana plants can emit a pungent, offensive odor.

But he says the board could have created a special-use system under which the county would evaluate each proposal on rural residential land on a case-by-case basis.

Peters agreed. Under a special-use system, the county could require big setbacks between a grow and property lines, limited the size of grows, or required only indoor greenhouse grows, for example, she said.

“I don’t think anyone is saying (recreational marijuana) should be allowed outright in rural residential,” she said. “There are legitimate concerns. But there should be flexibility depending on the circumstances of the neighboring properties. The county could create a happy medium.”

“It’s going to be pervasive”

In Cottage Grove, Hampshire and McConnell say they’ve been taken aback by the community’s angry response to city approval of their recreational marijuana processing facility. At a planning commission hearing, their application drew a full house, they said.

“I understand the concern just because the unfamiliarity people have with the market,” McConnell, 37, said. “There’s trepidation around recreational marijuana in general coming into any city. But people forget it’s been legalized broadly across the state. People can grow and smoke weed in their homes. It’s going to be pervasive. And in fact, it already has been pervasive in Oregon for a long time.”

Hampshire, 36, said the industrial-zoned lot they selected has been “vacant for quite some time.” The couple is renting the lot, not buying it. They needed a conditional use permit for the processing business, which the Cottage Grove planning commission approved, with some conditions. The property is in a strip of old industrial and warehouse buildings that face the park.

The lot “is an eyesore. But we’re going to be putting in landscaping and fencing and making it look like a nice piece of property,” Hampshire said. “And when we’re done, you’re not going to be able to see the building or what’s going on” in it.

The couple plan to make concentrated marijuana oil they’ll sell to retailers and wholesalers for use in marijuana-infused edibles and other products, and will have no foot traffic on the property. They’ll be using a carbon dioxide extraction technique that, unlike extraction done with butane or propane, isn’t known to cause explosions or fires, they said.

“There’s no explosives or flammability to carbon dioxide,” Hampshire said. “I am vehemently against using crazy chemicals to get the essential oils out of cannabis. We’ve all heard the stories of people blowing up their garages using butane. It’s scary.”

Buffer zones considered

Despite the couple’s reassurances, some Cottage Grove residents have made their frustrations known.

“Marijuana has a smell and a processing plant will also have a smell,” one resident wrote to the city. “This neighborhood is full of longtime residents and this will effect the value of their homes.”

Steve Stewart, a Bohemia Foundation member, said he can’t believe the city approved the application “when so many people spoke out against it.”

“It’s inappropriate to have a marijuana facility that close to the park. I don’t care if they’re selling it, processing it, whatever,” he said. “To me, it would be like having a porn store next to a school.”

Cottage Grove hasn’t yet enacted any marijuana-specific planning regulations. But in light of the controversy, the City Council is now considering buffer zones around schools and parks where no recreational marijuana facility could locate. Under state land use law, the city couldn’t retroactively apply such new rules to Hampshire and McConnell’s company, Full Circle CO2, however.

Tom Munroe, the city’s mayor, said he’s “not a big fan of any recreational marijuana growing or processing within city limits.”

“There’s space out in industrial areas or out in the county that work best for that,” he said. “Why (Hampshire and McConnell) had to choose a place right next to a residential area, I really don’t understand.”


Information from: The Register-Guard,