Cities & Counties Want To Subvert Marijuana Legalization In Oregon

To:          Mike McCauley, Executive Director, League of Oregon Cities
Mike McArthur, Executive Director, Association of Oregon Counties
Sean O’Day, General Counsel, League of Oregon Cities
Katherine Thomas, Assistant General Counsel, League of Oregon Cities
Rob Bovett, Legal Counsel, Association of Oregon Counties

Cc:          Measure 91 Implementation Committee
Co-Chair               President Pro Tempore Ginny Burdick
Co-Chair               Representative Ann Lininger
Co-Vice Chair     Senator Floyd Prozanski
Co-Vice Chair     Senate Republican Leader Ted Ferrioli
Co-Vice Chair     Representative Carl Wilson
Member              Senator Lee Beyer
Member              Senator Jeff Kruse
Member              Representative Peter Buckley
Member              Representative Ken Helm
Member              Representative Andy Olson

Re:         Association of Oregon Counties’ and League of Oregon Cities’ Threats of Lawsuits to Overturn and Subvert the Will of Oregon Voters.

Date:     March 9, 2015

Ladies and Gentlemen of the League of Oregon Cities and the Association of Oregon Counties, permit me to introduce myself.  My name is Russ Belville and I am the Executive Director of Portland NORML, a chapter of the National Organization for the Reform of Marijuana Laws.  In such capacity I represent the 71 percent of Portland voters who approved Measure 91, our initiative to legalize marijuana statewide.

As an Oregonian, I was one of the 56 percent of the voters who passed Measure 91, which passed with the greatest margin of any state to legalize marijuana so far.  And personally, I am one of the over 300,000 adult Oregonians whose personal responsible use of marijuana will no longer be a crime as of July 1.

I am very concerned about the attempts to undermine Measure 91 and would like to explain your position clearly to our membership and marijuana legalization supporters statewide.  What I and over 838,000 pro-Measure-91 voters¹ are wondering is this:

What good is a citizen’s initiative process if a few lobbyists and legislators can overturn its key provisions and pervert its intent?

I awoke one morning last week to read a story in The Oregonian telling of how Rob Bovett from the Association of Oregon Counties was threatening to sue for local taxation and home-rule prohibition of Measure 91 licensees, in clear contradiction to the language and intent of Measure 91.

On the one hand, the Association of Oregon Counties is claiming, per The Oregonian, “forcing local governments to accept retail marijuana establishments could run afoul of federal courts given that the drug is still illegal under federal law.”  On the other hand, “cities and counties have the ability to go around Measure 91 to levy taxes.”

Is Mr. Bovett telling us that the local governments terrified of the federal prohibition of marijuana, unless they can make tax revenue flouting it?

In the opening of Mr. Bovett’s eight-page memo, he explains that “it is important to note that Oregon is a home rule state, which allows a city or county the power to adopt ordinances on any matter unless specifically preempted by state law.” (emphasis mine).

I’m not sure how much clearer Measure 91’s vestment of sole taxation authority with the state and sole prohibition power with the people could be.  As Mr. Bovett notes, it is copied nearly word-for-word from Oregon alcohol statutes, and Oregonians are well aware there are no local beer, wine, or liquor taxes and that no city council or county commission can enact alcohol prohibitions without a vote of the people.

Is Mr. Bovett arguing that states can’t make their own marijuana laws because the federal government forbids it, but cities and counties can make their own marijuana laws even though the state forbids it?

Within Mr. Bovett’s memo is a tangled web of alleged precedents, such as a case involving prohibitions on nude dancing in alcohol establishments and a case involving a local alcohol prohibition in Salem in 1914 (five years prior to national Prohibition and 19 years prior to the adoption of the Oregon Liquor Control Act that forbade local alcohol prohibitions).

Mr. Bovett argues that in 1946, the city of Coos Bay was found to be within its rights to charge a liquor “service tax” from the local Eagles lodge, since the state law at the time only forbade cities and counties from exacting taxes from “production, sale, licensing, or handling”, and apparently, “serving” liquor isn’t “handling” liquor.

It also appears that since 1946, the liquor law had been tightened up, as Mr. Bovett later in the memo compares the current liquor law’s prohibition against local taxes on the “production, sale, mixing, serving, transporting, delivering or handling of malt or other alcoholic liquors” to Measure 91’s prohibition against local taxes on the “purchase, sale, production, processing, transportation, and delivery of marijuana items.”  Both marijuana and alcohol laws, it seems, ban local production, sales, transportation, and delivery taxes.  No Measure 91 store will be allowed to have onsite consumption, so a tax on “serving” marijuana is a moot point.

Since there is a clear and unambiguous ban on local taxes on all relevant areas of commercial marijuana regulation, what does Mr. Bovett believe the cities and counties could tax about marijuana that would avoid a direct conflict with state law?

Mr. Bovett’s and the Association’s and the League’s fervent desire to raise local marijuana taxes would be better understood if Measure 91 was leaving cities and counties without any marijuana revenue.  But the measure grants 10 percent of its statewide marijuana tax revenue to cities and another 10 percent to counties.  Furthermore, 40 percent is going to the Common School Fund, which will also benefit the local governments, and another 20 percent is going to the drug treatment and prevention efforts that are mostly funded by the counties.

The most disappointing part of these efforts is that they threaten the very goals that the cities and counties presumably espouse.  I doubt the cities and counties want more illegal drug dealers in their midst, but by enacting local marijuana taxes, that’s what they will get.  Measure 91’s low statewide taxation and ban on local taxes was set to ensure a uniform low price on marijuana that can compete with the statewide black market.  Across the river in Vancouver and all throughout Washington State, the legal marijuana shops often have to roust drug dealers from their parking lots that are undercutting the state’s overtaxed marijuana.

I doubt the cities and counties expect the medical marijuana patient rolls to increase now that adults have the option of recreational marijuana.  But in Colorado, since legalization passed they have over 5,000 more medical marijuana patients, because getting a medical marijuana card for some is more cost-effective than paying the high state and local taxes on recreational marijuana.

Is it Mr. Bovett’s intention to establish local marijuana taxes that are sure to provide support for illegal dealers and incentive for legal retailers to set up just across the city limits or county line?

In addition to all the extra traffic your law enforcement will deal with traveling to just outside the city limits or county line for their marijuana purchases, your city or county will be incentivizing groups to invest in one adult to make the trip and buy in bulk, cutting your city or county out of what would have been multiple shoppers contributing to your local business economy.

In pursuing these goals, the League and the Association also threaten marijuana legalization statewide.  The federal government laid out eight priorities for federal drug law enforcement when it comes to the states that legalize marijuana.  In what has become known as the Cole Memo, the Department of Justice indicated that the states should craft marijuana laws with the effect of:

• Preventing the distribution of marijuana to minors;
• Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
• Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
• Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
• Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
• Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
• Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
• Preventing marijuana possession or use on federal property.

Is it Mr. Bovett’s intention to undercut Oregon’s ability to abide by the guidelines of the Cole Memo statewide, thus subjecting Oregonians to the threat of federal prosecution?

Local taxes raise the price of marijuana, benefitting the criminal enterprises, gangs, and cartels that don’t bother checking the ID of minors.  Expensive or banned marijuana commerce in cities and counties enriches the black market that settles its disputes with violence and firearms and couldn’t care less about growing on public lands or abiding public safety.  Why do the League and the Association want to promote the illegal marijuana market?

Finally, like the marijuana tax revenue, the call for the right to ban marijuana licensees in a city or county would be more sympathetic if Measure 91 didn’t already give cities and counties the same power to ban marijuana as they currently hold to ban alcohol.  But Mr. Bovett doesn’t want the cities and counties to have to play by the same rules as the taxpayers.  In order to end marijuana prohibition, taxpayers had to form a petition, gather signatures, place it on the general election ballot, and pass it with a majority.  But to restore marijuana prohibition, Mr. Bovett wants a city council or a county commission to be able to enact it by fiat with as little as a 2-1 majority.

Again, we wonder: what good is a citizen’s initiative process if a few city councilors or county commissioners can overturn its key provisions and pervert its intent?

If these councils and commissions are so aligned with their citizens in wanting to ban marijuana licensees, why should they fear putting that on the ballot?  Could it be that they fear the people, even in the cities and counties that rejected Measure 91 in the election, would be more reticent to ban the marijuana licensees when that means rejecting the city’s or county’s share of the 10 percent of statewide marijuana tax revenue?

Oregon voters are not irrational hedonists who legalized marijuana in an irresponsible, thoughtless way.  Just two years prior, Oregon voters were rejecting an ill-written legalization measure even as Washington and Colorado were passing their legalization with ten-point majorities.  In response, Oregon activists crafted the best-written marijuana legalization measure to date, which learned two vital lessons from the mistakes of over-taxation and inconsistent statewide implementation in Washington and Colorado.

If the League and the Association persist in these extortionist threats of litigation against the majority of Oregon voters who approved smart legalization that supplants the black market, our membership and allies will be forced to consider radical solutions, including future initiatives to expand and clarify what we believed were the clear and unambiguous intentions and language of Measure 91.

Does Mr. Bovett understand that the Association and the League aren’t just attacking sensible marijuana legalization, but attacking the very foundation of citizen democracy through the initiative process?

If the legislature can’t see to it to implement the will of the people as written, perhaps another initiative, one such as Washington State’s two-year proscription on legislative tinkering with initiative language without a two-thirds majority, is in order.  That would be an initiative appealing to activists from many organizations from all points on the political spectrum.

I look forward to your response on these questions to better inform and educate our membership and those Oregonians who believe in citizen democracy.

Sincerely,

Executive Director - Portland NORML

[1] Measure 91 received more pro-votes than anyone or anything statewide in 2014, with the exception of the Equal Rights Amendment.

LTR) Anti-Bovett Lawsuit Threats FINAL