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Oregon’s marijuana industry raises land use tensions

As Oregon’s marijuana industry emerges from the shadows and the crop is cultivated on farmland, it’s raised questions about the “right to farm” and other land use issues.
Mateusz Perkowski

Capital Press

Published on August 3, 2017 8:19AM

Casey Kulla inspects marijuana plants growing at his farm near McMinnville, Ore. As Oregon’s marijuana industry has grown, it’s raised questions about the “right to farm” and other land use issues.

Mateusz Perkowski/Capital Press

Casey Kulla inspects marijuana plants growing at his farm near McMinnville, Ore. As Oregon’s marijuana industry has grown, it’s raised questions about the “right to farm” and other land use issues.

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Marijuana plants grow in a high tunnel at a farm near McMinnville, Ore. Since Oregon voters legalized the psychoactive crop in 2014, 685 marijuana producers have been licensed to grow the crop and more than 800 have applications pending.

Mateusz Perkowski/Capital Press

Marijuana plants grow in a high tunnel at a farm near McMinnville, Ore. Since Oregon voters legalized the psychoactive crop in 2014, 685 marijuana producers have been licensed to grow the crop and more than 800 have applications pending.

Casey Kulla and his wife, Katie, inspect marijuana plants growing at their farm near McMinnville, Ore. As Oregon’s marijuana industry has grown, it’s raised questions about the “right to farm” and other land use issues.

Mateusz Perkowski/Capital Press

Casey Kulla and his wife, Katie, inspect marijuana plants growing at their farm near McMinnville, Ore. As Oregon’s marijuana industry has grown, it’s raised questions about the “right to farm” and other land use issues.

Buy this photo
Marijuana plants grow in a high tunnel at a farm near McMinnville, Ore. Since Oregon voters legalized the psychoactive crop in 2014, 685 marijuana producers have been licensed to grow the crop and more than 800 have applications pending.

Mateusz Perkowski/Capital Press

Marijuana plants grow in a high tunnel at a farm near McMinnville, Ore. Since Oregon voters legalized the psychoactive crop in 2014, 685 marijuana producers have been licensed to grow the crop and more than 800 have applications pending.


Upon starting a marijuana operation on their farm near McMinnville, Ore., last year, Casey and Katie Kulla encountered no objections from neighbors.

The Kullas attribute the lack of controversy to their 10-year history of growing organic vegetables without running into conflicts with surrounding conventional farmers.

“We’re not perceived as outsiders, which I think is a big problem right now,” said Katie Kulla.

Elsewhere in Oregon, fledgling marijuana operations have met with alarm in rural communities, even prompting lawsuits in state and federal courts.

For example, a couple in Clackamas County have accused marijuana-growing neighbors of violating the federal Racketeer Influenced and Corrupt Organizations Act.

The Kullas believe they’ve avoided such reactions because nearby farmers trust their marijuana operation won’t bring loud music or raucous visitors, which are common grievances.

“Nothing for our neighbors has changed,” said Casey Kulla.

Nearly three years since Oregon voters legalized recreational marijuana, 685 producers have been licensed by the state to grow the crop and more than 800 have applications pending. Whether this development is positive or negative depends on a person’s perspective: Where some see the potential for economic rejuvenation, others see a disruption to the pastoral landscape.

“People can now make a living on 10 to 20 acres of marginal land,” said Katie Kulla.

“It brings farming activity to an area that probably hasn’t seen any except for a horse or two,” her husband added.

The novelty of marijuana production in such areas has drawn complaints that are occasionally contradictory.

While some fear declining real estate values, others lament once-affordable properties that now sell for high prices due to their suitability for marijuana cultivation.


Land use questions


Regardless of these conflicting arguments, it’s become clear the land use issues have grown more pronounced since the legalization of recreational marijuana.

As the marijuana industry emerges from the shadows, larger operations are expected to spring up on traditional farmland. At the same time, legal questions have arisen about regulating marijuana differently from other crops in farm zones.

Traditionally, the vast majority of medical marijuana wasn’t produced on properties zoned for “exclusive farm use,” with growers often preferring rural residential zones, said Peter Gendron, president of the Oregon Sungrown Growers Guild, which represents outdoor cannabis producers.

Under the Oregon Liquor Control Commission’s rules, recreational marijuana operations can have nearly an acre of crop canopy, which many properties in rural residential zones can’t accommodate.

Recreational marijuana operations must generally also have access to water rights, which are more prevalent in exclusive farm use zones, Gendron said. “That forces those onto farmland.”

As more marijuana is produced on a bigger, outdoor scale, prices for the crop will fall and cultivating it indoors will likely stop being affordable, he said.

Cooling, lighting and ventilation are too expensive to support commercial marijuana production in the long term, so indoor operations will likely focus on breeding and research, Gendron said.

“It’s primarily cost-driven,” he said.

Meanwhile, regulations aimed at curtailing black market marijuana sales are expected to steer medical marijuana growers into the recreational system.

Under House Bill 2198, which lawmakers approved this year, minimally regulated medical marijuana operations will be limited to 12 plants. Anybody growing more than that amount must follow OLCC’s strict “seed-to-sale” tracking system. In return, they will be allowed to sell up to 20 pounds through recreational marijuana channels.

“They wanted an outlet for surplus product where they could get some money,” said Tom Burns, a marijuana consultant who formerly worked for OLCC.

In the current market, a pound of marijuana fetches roughly $800-$1,200 per pound for the grower, said Gendron. An experienced outdoor grower can produce a pound for $200-$400, but an inexperienced grower may not generate any profit at all.

Actual prices and costs will depend on the desirability and yield of the marijuana cultivar, he said.

Oregon’s new rules will probably cause medical marijuana production to “shrink and stabilize” over time, said Rep. Carl Wilson, R-Grants Pass, vice chairman of the Oregon Legislature’s Joint Committee on Marijuana Regulation.

Stopping the diversion of marijuana into the black market — where it’s often smuggled into other states — is necessary to prevent federal intervention, as the crop remains illegal at the federal level, he said.

“I think they will make good on their pledge to shake things up if that doesn’t stop,” Wilson said.

With Oregon growing five times more marijuana than can realistically be consumed in the state, though, producers are faced with a looming oversupply, Wilson said, citing committee testimony from marijuana industry participants.

“This green rush is going to hit a bump one of these days,” he said.

Given this uncertainty, some wonder whether overzealous marijuana production will inflict long-term harm to farmland.

Certain marijuana operations are covering the ground with gravel, or even paving portions of it, to better grow the plants in containers and greenhouses, said Gordon Lyford, an agricultural engineer and certified water rights examiner in Southern Oregon, a hotbed of cannabis production.

“They don’t even use the natural soil,” he said. “These guys are just destroying the soils.”

While such practices are a common source of criticism, it’s worth noting they’re not limited to cannabis. Ornamental plants are frequently grown in containers on gravel, which is allowed outright in exclusive farm use zones.

“We don’t prevent somebody from putting in a greenhouse to grow nursery crops on EFU,” said Sunny Jones, cannabis policy coordinator for the Oregon Department of Agriculture.


Right to farm?


Unlike other crops grown in such farm zones, though, it’s unclear to what extent Oregon’s “right to farm” law protects marijuana production.

The statute, passed in 1993, prohibits local governments from enacting nuisance and trespass ordinances that restrict common farming practices, such as those that stir up dust or emit unpleasant livestock smells.

Under Oregon’s marijuana laws, though, local governments can impose “reasonable” regulations on the “time, place and manner” of cannabis production. County commissions can opt out of any marijuana production altogether, as long as 55 percent or more of the county voted against legalization. Those counties where fewer than 55 percent of the people voted against legalization can also opt out, but the matter must be put to an election.

In response, some counties have opted to allow production but are requiring setbacks between marijuana plots and neighboring properties, among other rules.

Since the laws are so new and untested in court, it’s uncertain at which point these limits become unreasonable and impinge on the marijuana producers’ “right to farm.”

“That’s the $100,000 question. There’s been no precedent set,” said Corinne Celko, an attorney with the Emerge Law Group. “Cities and counties are in some instances pushing the envelope but nobody has been pushing back in a formal, legal way, saying, ‘They’ve gone too far.’”

Marijuana’s distinctive odor is cited by critics to justify restrictions, for example, but the smell of a dairy or livestock farm could not serve as a basis for such regulations.

The tension between the “time, place and manner” law and the “right to farm” law may eventually be resolved in court, unless lawmakers first clarify how the two statutes interact.

If the matter does end up before a judge, the more-recent “time, place and manner” law would probably be assumed to be a valid modification of the “right to farm” law specific to cannabis, said Tim Bernasek, an agricultural attorney with the Dunn Carney law firm.

“There’s a presumption the legislature knows what it’s doing,” Bernasek said.

No recreational marijuana grower has yet filed a lawsuit against county “time, place and manner” restrictions, but that doesn’t mean they’re at peace with the rules.


Deschutes debate


The situation is particularly inflamed in Deschutes County, which is unique in subjecting marijuana applicants to a full land use process that includes neighbor notification and public hearings if a proposal encounters opposition.

Marijuana growers in the county can produce the maximum canopy of nearly an acre only on properties larger than 60 acres.

Plots must be a minimum of 100 feet from neighboring property lines, 300 feet from neighboring dwellings and 1,000 feet from schools, childcare facilities and youth centers.

Greenhouses in Deschutes County are prohibited from using lights at night, whether they contain cannabis or other crops.

Andrew Anderson, a marijuana grower and board member of the Deschutes County Farm Bureau, can only utilize 20,000 square feet of his 31,000 square feet of greenhouses because his property is less than 60 acres.

Even so, Anderson considers himself luckier than other prospective marijuana growers in the county, who were unable to win approval under the land use process despite sizable investments.

“It’s really frustrating to have that happen to people who are following all the rules,” he said. “Our goal is just to have reasonable rules.”

Anderson believes Deschutes County is nominally allowing marijuana production to get state cash from marijuana taxes while effectively regulating it out of existence.

“It’s skirting the system to bring in tax revenues without granting licenses,” he said.

Nick Lelack, the county’s community development director, disagrees that the rules are intended to discourage marijuana production.

Rather, they’re crafted to meet the distinct needs of Deschutes County, where vegetation is too sparse to provide an effective buffer around marijuana plots compared to more verdant parts of the state, Lelack said.

“We tried to thread the needle between allowing this emerging industry to be successful here and mitigating a lot of issues rural residents raised,” he said.

It’s better to empower counties with local control over marijuana production — or opt out of marijuana businesses altogether, as many in Oregon have — rather than force the crop onto communities, said Rob Bovett, legal counsel for the Association of Oregon Counties.

Otherwise, community opposition to marijuana could invite federal intervention and spur more lawsuits among neighbors, Bovett said.

“We’re really licensing people to commit federal crimes,” he said. “It is a unique policy space unlike anything else.”

Unless marijuana is legalized at the federal level, it can’t be treated just like any other crop under the “right to farm” statute, he said.

“It is different, legally and otherwise. Pretending otherwise is not going to work,” Bovett said.





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