With Recreational Weed a Week Away, The City’s Having a Really Hard Time Licensing Shops

• Nick Patton

For a town hell-bent on regulating marijuana shops, the City of Portland is having an exceedingly hard time regulating marijuana shops.

Last week, City Council delayed new regulations on pot businesses after outcry from medical dispensaries that their existence could be imperiled.

Now they’ve had to push back the rules again. The problem? The fix council members envisioned—suggested by members of the medical marijuana industry—didn’t actually solve anything.

As we report in this week’s Mercury, proposed rules that dictated all cannabis shops—be they medical or recreational—have to be at least 1,000 feet apart would vastly limit the amount of new pot shops that could move into the city.

But the rules drawn up by the city’s Office of Neighborhood Involvement (ONI) didn’t decrease the likelihood that medical dispensaries might be put out of business under Portland’s expensive licensing scheme. They still would have allowed an aspiring pot shop owner to find a storefront across the street from a medical dispensary that has been in business for years. If the new business beat the years-old dispensary to getting a city license, it could have effectively killed the medical outfit, since the stores would be less than 1,000-feet apart.

“There is a possibility that we would say ‘no’ to an existing dispensary,” ONI staffer Theresa Marchetti told council this morning, after furious dispensary workers raised that possibility.

That sent city council scrambling for solutions.

The workaround Portland has in mind, proposed by Commissioner Nick Fish, could increase the density of pot businesses in the city while protecting existing dispensaries. The proposal: In instances where a new pot business imperils a dispensary, a dispensary could be given an exception to the 1,000-foot rule if it can prove it’s licensed with the state.

“It helps us give the exception to the good actors,” Fish said.

The city wants to “allow existing businesses to continue, even if they’re operating within 1,000 feet of another business,” said Mayor Charlie Hales. “That’s the goal here. Not to put people out of business.”

But big questions remain, such as how many exceptions the city’s okay with. If dozens of aspiring recreational pot businesses beat out neighboring dispensaries in applying for city licenses, the resulting “saturation” of pot shops could make city leaders squeamish.

It’s also unclear how the policy would treat medical dispensaries that intend to switch over to recreational sales—a move many are planning.

Lastly, the “exception” city council’s mulling might force ONI to further rejigger its proposed fee for the marijuana licensing program. The office initially planned to charge recreational shops $3,750 to apply for and receive a license. It jacked that up to $5,150 last week, when it became clear new regulations would limit the number of marijuana businesses the city could hold. Medical dispensaries would have to pay $2,975 to apply for and receive a license under the current plan.

Regardless of what City Council arrives at, there will be pushback. At today’s council hearing, frustrated employees of a SE Sandy dispensary, Collective Awakenings, chided council for enacting regulations they say are redundant.

“This will create overregulation and city bureaucracy of an industry that’s already facing overregulation,” Collective Awakenings employee Alex Pavich told council, calling the regulations “poorly thought out” and “last minute.”

That last bit is certainly true. Right now the city’s looking at passing new marijuana regulations just one day before marijuana dispensaries are allowed to sell up to a quarter-ounce of pot to anyone over 21.