Setting up shop, part 2

, Written by Jennifer Elliott, Posted: Tue, February 25 2014 at 1:55 PM, Updated: Thu, February 27 2014 at 8:28 AM

Medford, Ore. -- On March 3rd, medical marijuana dispensaries will begin opening in Oregon. In fact, experts predict anywhere from 250 to 400 will open their doors this year. That number is equal to, or more than, the number of liquor stores currently in the state.
"When he comes in he presents his card and picture I.D.," says Puff's business owner Mike Welch. He and medical marijuana customer Beau Hawn are participating in a sale that is, technically, against federal law.

"Here's where things change tremendously. Up until this point we've had no legal way to produce this," comments Welch as he hands Hawn his receipt. Beginning March 3rd, Welch says the business he runs, Siskiyou Medical Supply, will be a fully functional and law abiding dispensary. At least as far as the state of Oregon is concerned.

"The biggest problem is moving it from black market into legitimate market," says Welch referring to the Marijuana industry as a whole. "For a while it will be grey. almost identical to prohibition."

Welch admits, that until now, medical marijuana has been an underground cash crop in Oregon... but he says with the state legitimizing and regulating sales, he believes it will soon boost the state's economy.  "Timber industry is long gone, but when it comes to an underground economy that provides cash for purchases, marijuana is huge," says Welch.

So how will people make money, legally? Under current Oregon medical marijuana program laws a seller can only be reimbursed for the cost of the actual product. The dispensary law, or House Bill 3460, takes it one step further. It will allow sellers to price marijuana high enough to pay for employee salaries and provide health insurance.  That has many people jumping on board.

"That would be over 100 people who plan on opening one," says Todd Dolotto. He's referring to the number of people who attended the first ever Oregon Medical Marijuana Business Conference, with the intention of opening a dispensary. Dolotto is President of CAN Consulting and a member of the Rules and Regulations Advisory Committee for the new dispensary law.                           
Dolotto tells us, under the rules, businesses will be able to offer several forms of cannabis, "There are edible forms, such as cookies, lotions and topical applications."

However, opening a dispensary may not be easy for all cannabis connoisseurs.

Many communities are banning dispensaries, including Medford, Tualatin, Coos Bay, and Josephine County. Jacksonville and several others say they may not be able to allow dispensaries because their city code does not authorize businesses to break federal law.

Central Point says the opening of medical marijuana shops will be limited to three commercial use zones. They're also considering requiring additional background checks.

In an interview earlier this year Amanda Marshal, US Attorney for the District of Oregon, touched on the legalities of prosecuting drug cases. "The majority of drug cases that are prosecuted through out the state of Oregon are prosecuted by local District Attorney's offices and counties," says Marshal

As far as dispensaries go, Jackson County District  Attorney Beth Heckert tells us, " We would only look at cases that violate state law." Meaning cases against dispensaries, after March 3rd, would either be in civil court or federal court. Federal says they would get involved primarily for significant cases. Those would be instances that involve more than 800 plants, kilograms of marijuana, or ties to criminal groups.

Furthermore, Oregon's Senate passed a bill that would prohibit cities and counties from banning dispensaries. The House then amended the bill Monday to allow local bans,and added child-safe packaging requirements. The measure goes next to the full House.  Then back to the Senate where the changes may or may not be approved.

"The next step is getting this service and product covered by insurance," says Dolotto.

In the meantime, Welch is preparing for March 3rd, "This is almost a test case for getting recreational."

Legalization of recreation marijuana is a possibility. City, state, and federal regulations around marijuana remain extremely fluid. In fact, voters could see recreational marijuana on the November ballot,  the legislature is also considering it.

This year the federal government altered bank RICO laws, short for the racketeer influenced and corrupt organizations act. The changes mean banks can now do business with dispensary owners without facing penalties out of Washington D.C.

For the first half of this story visit:

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About the Author

Jennifer Elliott

Jennifer Elliott anchors the primetime newscast FOX26 First News at Ten on NBC5’s partner station, KMVU/FOX26. She also reports for NBC5 News.

Jennifer began her career at NBC5 News in 2011 as a production assistant. Raised in Southern Oregon, she studied voice and piano while attending South Medford High School.

After graduating from Brigham Young University-Idaho, she returned home and added organ playing to her music repertoire. In addition to her musical talents, Jennifer is an award winning artist.

She has also co-hosted Southern Oregon’s Got Talent, the area’s premiere talent show. Jennifer is married and the mother of two young sons who keep her busy and very happy.

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