Noelle Crombie, The Oregonian

Starting early next year, Oregon will be home to a state-sanctioned medical marijuana retail industry, but some cities are already moving to keep these establishments from opening.

The Medford City Council voted in September to effectively ban medical marijuana outlets. Gresham has a similar restriction. Grants Pass Mayor Darin Fowler said he wants to ban medical marijuana retailers from his southern Oregon community.

“Because of our tourism and retirement population, we would rather not have that be on a downtown storefront,” said Fowler, who hopes to put the issue before the city council by year’s end.

These restrictions set the stage for what is likely to be a legal battle over whether local governments have a say in regulating medical marijuana in a state that first legalized the drug for medicinal use in 1998 but only this year began the process of regulating its retail distribution.

Medical marijuana advocates, who for years have sought retail access to cannabis, and the architects of the dispensary law say regulating medical marijuana outlets should be left to the state.

“What we really hope is that cities will take a look at these facilities and understand the public safety goals we are trying to reach by providing patients with safe access and basically allow the state to license them,” said Geoff Sugerman, a political consultant who helped crafts Oregon’s new medical marijuana law.

Should local governments be able to restrict or ban medical marijuana retail establishments?
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“This is one of those areas where I think the courts will end up having some say if there are cities who go down this route,” he said.

Rep. Peter Buckley, D-Ashland, the bill’s co-sponsor, said Oregon’s new law restricting genetically modified agriculture should apply to medical marijuana distribution. The law, which wasn’t aimed at cannabis production and sales, prohibits local governments from regulating commercial plant seeds and products.  Supporters of the so-called GMO bill, approved  last month,  want to prevent local governments from imposing their own rules on genetically modified crops.

Buckley said the Office of Legislative Counsel’s preliminary analysis concluded that it’s up to the state, not local governments, to regulate medical marijuana from seed-to-sale. The final legal analysis is expected soon, said Buckley, who asked the agency to study the matter.

Medford Police Chief Tim George Medford Chief of Police Tim George explains a recent modification to an ordinance that prevents marijuana dispensaries from operating within city limits.

“We are going to work under the understanding that the state law does take precedent,” said Buckley. “We are trying to work with cities and counties to make sure their concerns are heard.

“A lot of this is based on fear of the unknown,” said Buckley, who supports marijuana legalization.

The issue of local control over medical marijuana outlets has played out nationally in states with medical cannabis programs. More than 50 local governments in California have established their own medical marijuana ordinances, the result of lax state regulation, said Kris Hermes, a spokesman for the Americans for Safe Access, an advocacy group for medical marijuana patients.

The California Supreme Court earlier this year ruled that local governments have a right to outlaw the establishments, which have spread across the state since the state since medical marijuana was approved in 1996. Dispensaries are banned in large areas of the state, Hermes said.

Medford resident Keanon Ferguson thinks dispensaries should remain Medford resident Keanon Ferguson, who previously had a problem of his own with prescription medication, thinks that medical marijuana, taken as prescribed, should be allowed and that Medford dispensaries should be allowed to operate within Medford.

Though Washington is crafting rules for its recreational marijuana market, medical marijuana dispensaries aren’t addressed under state law. Seattle drafted its own rules in response to the proliferation of shops in the city.

In Oregon, local governments typically have control over issues like land use and business licenses unless state law “very specifically states that the state law preempts local laws,” said Mike McCauley, executive director of the League of Oregon Cities. The organization agreed to endorse the dispensary legislation provided that restriction was not included.

“We were supportive in part to avoid having cities being preempted from having their own regulations,” McCauley said.

Some cities, such as Bend and Portland, don’t plan to add any restrictions of their own.

“We are just treating them like any other business in Bend,” said Eric King, the city manager. He said Bend is home to a handful of medical marijuana retailers.

Tim Schoeneberg, owner of Southern Oregon Community Center and Clinics, in Medford Tim Schoeneberg, owner of Southern Oregon Community Center and Clinics in Medford, talks about the recent change to a city ordinance that would prevent dispensaries within city limits, and how that changes his business plan.

Said Dana Haynes, a spokesman for Portland Mayor Charlie Hales: “The mayor is not taking any meetings on the topic of banning retail joints.”

In Medford, the city council last month unanimously approved a change to the city’s business license ordinance, stipulating that establishments must be in compliance with local, state and federal laws. Marijuana is outlawed under federal law.

After the Medford City Council unanimously approved the changes to its business license ordinance, the city alerted Mary Jane’s Attic and Mary Jane’s Basement that it was revoking its business license. The establishment dispenses medical marijuana and continues to operate while its owners appeal the city’s decision, said Leland Berger, the Portland lawyer representing the business owners.

Advocates say city ordinances that hinge on the federal prohibition on marijuana come as the federal government softens its marijuana stance.

“You have an unusual tension between local and state law enforcement on the one side and a relaxed, or ostensibly relaxed federal enforcement policy on the other,” Hermes said.

In August, the U.S. Department of Justice revised its stance on marijuana, announcing that the agency would not challenge voter-approved marijuana legalization laws in Colorado and Washington.

Deputy U.S. Attorney General James Cole outlined the federal government’s priorities when it comes to marijuana, including cracking down on black market trafficking and profiting from cannabis by gangs and other criminal enterprises.

Cole wrote that states with strong marijuana laws and effective regulations and enforcement are “less likely to threaten” those priorities.

“Indeed, a robust system may affirmatively address those priorities by for example implementing effective measures to prevent diversion of marijuana” to the black market, Cole wrote.

That’s a tough sell for people like Tim George, Medford’s police chief and one of the state’s most vocal critics of the Oregon Medical Marijuana Program. George said the state does a lousy job of ensuring that medical marijuana producers are complying with the law and that dispensaries will do nothing to dent the flow of Oregon medical marijuana to the black market.

“The whole black market rationale behind this thing, that is voodoo science,” said George. “Think about it: Am I going to sell to a dispensary at par when I can sell five or 10 times that amount elsewhere?

“In essence, you are going to put more marijuana in the marketplace,” he said.

Medford lies in the heart of Oregon’s robust marijuana growing country, a region where outdoor plants thrive in prime conditions with little oversight or interference from the state. Surrounding Jackson County and neighboring Josephine County are home to small towns and hamlets with the highest percentages of medical marijuana cardholders in Oregon.

Tim Schoeneberg, a medical marijuana patient who owns the Southern Oregon Community Center and Clinics, rented space in Medford to open a dispensary after the bill passed the Oregon legislature earlier this year.

“I thought it was fabulous that the measure passed, that we were actually going have safe access that was actually safe,” he said.

Now that he can’t legally dispense marijuana, his business is focused instead on helping people get a medical evaluation for a medical marijuana card.

He said he doesn’t know what to tell cardholders who ask advice on legally obtaining the drug.

“Where are they going to go get that medicine? Who are they going to go? How far are they going to have to travel to get their legal marijuana medicine?,” he said.

“I don’t have an answer.”