The November election is almost here, and for many local communities around the country, it’s an opportunity to weigh in on the medical and recreational marijuana industries. You see, there is only one constant in the marijuana industry – things will change. By November, we’ll know just how sweeping those changes can be on a local level.
Five states have local control regulations up for vote in November – Arizona, California, Maine, Massachusetts, and Nevada. However, bigger questions loom for the future of marijuana businesses in Oregon where, according to The Oregonian, 47 cities and six counties have a variety of questions on the November ballot related to whether or not legal marijuana businesses should be allowed in their neighborhoods.
But it doesn’t stop at recreational marijuana votes in Oregon. Medical marijuana is also up for a vote in 38 Oregon counties and cities. In November, citizens will also vote whether or not medical marijuana processors and retailers should be allowed within their communities’ borders.
It might seem hard to believe this is happening in Oregon, which was the first state in the country to decriminalize possession of small amounts of marijuana over 40 years ago and where citizens voted to legalize recreational marijuana two years ago. It just goes to show that anything can change in this industry.
The Far-Reaching Effects of Local Rules on the Marijuana Industry
Cannabiz Media is hard at work on a comprehensive report that analyzes marijuana licenses across all 27 states where medical and/or recreational marijuana is allowed. Using data from the Cannabiz Media Database, the effect of local rules can be quantified.
For example, Colorado, Oregon, Vermont, and Washington State are the only states that allow municipalities to ban state-licensed marijuana businesses (although in Washington, the ban must be approved by the State Liquor and Cannabis Board). A total of 189 communities in Colorado have already passed some type of ban or restriction on marijuana businesses while in Washington, 107 communities have issued permanent or temporary bans.
Other states allow local governments to set zoning restrictions on where marijuana businesses can be located. Furthermore, many states allow local municipalities to collect a variety of fees and taxes from marijuana businesses that operate within their borders. These taxes can range from burdensome to onerous.
As an example, local governments in Colorado can charge a fee for a local license on top of the state license that marijuana businesses are required to obtain. Sometimes, obtaining that license can delay a business’ opening or ongoing operations as has happened in Denver, Colorado this year.
In fact, those fees can be exorbitant. This is the case in multiple municipalities in Massachusetts. Furthermore, if marijuana businesses don’t follow local rules, they can be fined and shut down by local governments in some states (including Oregon where it happened earlier this year) – even if they’re following all state regulations.
Some states are actually taking steps to encourage local governments to allow marijuana businesses to operate in their neighborhoods. A local marijuana tax is on the November ballot in 106 Oregon communities in an effort to sway voters who would like to see that money back in their communities. This would be a tax on recreational marijuana sales and would be collected on top of the 17% recreational tax that the state will collect. According to the Cannabiz Media Database and upcoming state-by-state report, that local tax could range from 1%-3%.
Unfortunately, all of these local rules, bans, fees, and taxes trickle down to patients and consumers in the form of higher prices. Will that negatively affect the legal medical and recreational marijuana markets? Only time will tell, but until then, it’s safe to say this is a volatile industry. However, it can be profitable for businesses that can successfully navigate the changes meet the many challenges they’ll face along the way – local rules is just one of them.
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