Ashland loosens rules on business licenses

The city of Ashland will change its business-license rules to avoid getting caught between state laws that allow medical-marijuana dispensaries and federal laws that ban marijuana.

The Ashland City Council voted unanimously Tuesday night to change the municipal code, which states the city will not grant a business license to a business engaged in an "unlawful activity."

The change removes the "unlawful activity" language from the code.

City staff members said Ashland's business-license system is meant to generate revenue for the city and serve as a registry for those conducting business in town — not to be a means of determine the legality of various business ventures.

With the change, the city will not be forced to deny a business license to a medical marijuana dispensary that is legal under state law, but illegal under federal law.

Councilor Greg Lemhouse said the change is an issue of aligning city law with new state laws.

He noted Ashland could be sued if it did not allow dispensaries that are authorized by the state.

The number of dispensaries that could actually open in Ashland is restricted by a number of state regulations — including that they be at least 1,000 feet from a school or another dispensary and be sited on land zoned for agricultural, industrial, commercial or mixed-use operations.

Councilor Rich Rosenthal said only a tiny handful of dispensaries could open in Ashland under those rules.

By a 5-1 vote, councilors also decided to ask the Ashland Planning Commission to research and make recommendations on other restrictions that the city could put in place. Councilor Carol Voisin voted alone against the move.

Local restrictions could include banning dispensaries from Ashland's downtown business zone or blocking them from mixed-use business zones that also allow homes, for example.

"It's a matter of preserving the character of the downtown," said City Administrator Dave Kanner.

The council will need to review and approve any recommendations created by the Planning Commission.

Lemhouse said the city has a duty to abide by state laws while also protecting the community.

Ashland needs to make sure the medical marijuana dispensary system is not being abused, and also balance the needs of patients to have access to marijuana they are allowed to use, he said.

Councilor Dennis Slattery said the city also should consider protecting the investment of people who launch dispensary businesses.

Uncertainty remains about whether an existing medical marijuana dispensary would be forced to close if a new school opened nearby, City Attorney David Lohman said.

Questions remain about whether kindergartens and day care centers count as schools, he said.

While marijuana remains illegal under federal law, the U.S. Department of Justice has taken the position that it will not interfere with marijuana businesses that comply with state laws — as long as they comply with certain criteria.

Those criteria include that a business's activities not result in the distribution of marijuana to minors, serve as a cover for trafficking other illegal drugs, or generate revenue for criminal enterprises.

Lohman said federal raids continue, bringing uncertainty to medical marijuana dispensaries.

The federal government will raid dispensaries operating within 1,000 feet of where minors congregate — and sites where youths congregate are not clearly defined legally, Lohman said.

Sites could include libraries, for example, he said.

"For people who are thinking about establishing dispensaries, it's a real issue," Lohman said.

Staff reporter Vickie Aldous can be reached at 541-479-8199 or Follow her at

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