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La Pine medical marijuana tax may be illegal

By Scott Hammers | Published: Nov 22, 2015 at 12:03AM

The fate of a medical marijuana tax in La Pine is up in the air, as attorneys representing the Oregon Legislature have determined such taxes are illegal.

At the request of Sen. Floyd Prozanski, D-Eugene, the Legislative Counsel’s office, an arm of the Legislature, looked into the issue.

A three-page letter issued Nov. 13 by Dexter Johnson and Mark Mayer with the office concluded that a law passed by the Legislature earlier this year prohibits local governments from taxing medical marijuana. That’s also the view taken by Randy Huff, owner of Green Knotz, one of two medical dispensaries operating in La Pine. Huff intends to sue the city over the collection of the tax, and said the suit should be filed sometime before the end of the month.

Huff said Friday he wrote to La Pine city councilors and La Pine City Manager Rick Allen earlier this year to argue the tax was illegal, but received no response, leading him to suspect city leadership would prefer the marijuana industry just go away.

“It puts us in a very bad position when the city councilors are acting like this, with regards to cannabis and business in general,” Huff said.

Allen said the city has collected a little more than $5,000 from its 5 percent tax on medical marijuana. The tax was adopted shortly before Oregon voters approved Measure 91 in November 2014, setting the stage for legal recreational use.

La Pine passed a law earlier this year barring its two medical marijuana dispensaries from serving the recreational market. Since Oct. 1, most medical dispensaries in the state have been able to sell marijuana to anyone 21 or older.

Huff said despite being shut out of the recreational market, business has been good.

Allen said it has been difficult for local governments to know where they stand when it comes to regulating marijuana since the passage of Measure 91. City councilors are considering asking voters next November if they want to lift the city’s prohibition on recreational marijuana dispensaries, Allen said, but have not decided if they want to put the issue to a vote.

“The problem with this issue is it’s always evolving and changing,” Allen said. “You pass something based on what you have, and a month later, somebody passes a new rule or law. It’s kind of hard for us to adjust on the fly.”

Allen said he has not read the opinion issued by the Legislative Counsel’s office, but will be reviewing the opinion and the city’s medical marijuana tax with the city attorney next week. City councilors will be weighing in on the matter at their meeting Dec. 9, he said.

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