City mulls change to business licenses

The city of Ashland is proposing to change its business license regulations to avoid conflicts between state and federal laws that are at odds over the legality of medical marijuana dispensaries.

Ashland City Council will consider the change during a meeting that starts at 7 p.m. on Tuesday in the Ashland Civic Center Council Chambers, 1175 E. Main St.

While medical marijuana dispensaries are illegal under federal law, the Oregon Legislature passed a bill in 2013 that makes such dispensaries legal under state law if they comply with certain conditions.

Ashland's municipal code currently states that the city will not issue a business license to any business engaged in an "unlawful activity," according to city staff memo to councilors.

"This proposed code amendment removes the 'unlawful activity' provision from the business license code, thus relieving city staff of the potentially awkward responsibility for possibly shutting down a business that is explicitly legal and regulated under state law," the memo said.

The code change would not protect medical marijuana dispensaries from possible federal prosecution, the memo noted.

In 2012, the city received a business license application from a medical marijuana dispensary that had opened on Hersey Street.

The city declined to issue a business license because of the "unlawful activity" provision of the Municipal Code. The dispensary then moved to another city without that provision, according to city staff.

Also in 2012, the Earth Dragon Edibles Restaurant & Lounge was denied a business license because it sold food prepared with cannabis-infused oil to medical marijuana card-holders.

The city later issued a business license when the restaurant promised to stop providing marijuana-infused food and instead asked patrons to bring their own marijuana and discretely add it to their food.

Oregon law was unclear about whether the bring-your-own-marijuana restaurant model was legal. Federal law barred the concept, but was only partially enforced, city officials said at the time.

The business closed in less than a year from a lack of customers and insufficient revenue, according to a founder.

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, according to city staff.

Oregon has its own requirements for medical marijuana dispensaries, including that they:

  • be located at least 1,000 feet from any public or private school or another licensed dispensary;
  • be located in an area zoned for commercial, industrial, mixed-use or agricultural use;
  • be registered as a business with the secretary of state's office;
  • install a minimum security system, including a video surveillance system, an alarm system and a safe.

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

With the current code's "unlawful activity" provision, staff would have to have an encyclopedic knowledge of all state and federal laws in order to apply the code fairly, according to city staff.

For a complete list of Tuesday night meeting agenda items and for details on each item, see

Staff reporter Vickie Aldous can be reached at 541-479-8199 or Follow her on Twitter at @VickieAldous.

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