An Oregon economist and businessman says the local cannabis industry will campaign to educate voters on a referendum that has the potential to drive millions of dollars out of Marion County. The referendum, which will be placed on the November ballot by Marion County, will ask residents to approve or deny recreational cannabis businesses in the county’s unincorporated areas.
“To start with,” says Beau Whitney, VP of Regulatory and Governmental Affairs for Golden Leaf Holdings, an Oregon cannabis oil and solutions provider, “the immediate cost to Marion County for not allowing recreational businesses is about $110 – $111 million.”
Whitney and numerous distributors, growers and businesses are planning to form a political action committee (PAC) that will present economic and scientific arguments to voters.
To reach the impressive $100 million-plus figure Whitney combines statistics from several sources. First, he uses Oregon Medical Marijuana Program data which indicates there are about 1,930 grow sites in Marion County. One of many financial benefits of allowing these growers to do recreational business, according to Whitney, is the money each would have to spend to “convert” their operations with infrastructure upgrades with things like increased security, data processing.
“If you very conservatively assume that each will need to spend $10 thousand to convert,” he says, “that’s $19 million coming into the county.” One grower tells Salem Weekly that $10 thousand is a very moderate number, and that expenses to convert will be far higher.
After that Whitney, who teacher of both undergraduate and graduate level economics courses, as well being a leader in cannabis economics, uses an economic impact multiplier, a term for the way money paid to one person is increased when they spend it, of four, on that $19 million. “I purposely use a conservative number of times four” he says. The result is $77 million in financial benefits to the county.
Other revenue Whitney considers includes the wages and benefits his company intended to pay 100 employees ($4.5 million/year) at a Marion County location it bought and the $4.0 million it planned to invest in infrastructure for that project.
One business that was affected by the commissioners vote was Club Pitbull, one of the oldest medicinal cannabis dispensary in both Salem and Oregon. Owner Chris Oss says the county is already losing income as a result.
The commissioners allowed Club Pitbull to sell recreational now, but say if the vote goes against recreational in the county, they must stop on January 1. Oss had believed the county would ‘grandfather’ his business in so he could weather any vote outcome.
“The commissioners didn’t even consider grandfathering in Club Pitbull and one other dispensary [Herbal Remedies on Lancaster],” says owner Oss. “It’s real disheartening they didn’t even discuss it.”
Pitbull has provided exemplary service to the community since it opened in 2010, Oss says. “We’ve never had a complaint, we’ve gone above and beyond what was required in every requirement… I even had a sheriff show up and say the local community was lucky we were here.”
Even with its future is on hold, Club Pitbull employs 9 people and provides Oregon governments with $14,000 – $20,000 in sales tax every month. The county receives 3% of the tax directly and a portion of the rest is redistributed to it.
Because he is uncertain about his future, Oss has pursued a move into Salem, just a stone’s throw away from his dispensary on State Street east of Lancaster. The City of Salem has been more welcoming, he says, adding, “The city has worked with us very well to resolve any issues.” His father and uncle have taken out loans on their houses to support a move.
Not knowing whether or not he’ll have to relocate from county to city means Oss’s “life is on hold, all my life savings are on hold.”
Marion County has told him he can’t even apply ahead for a recreational permit with the OLCC in case of a favorable vote. This would prepare him if the memorandum was approved. “I understand they don’t have to, and they’ve been awesome in other ways,” Oss says, “but if the vote passed and we had already applied, we’d be ready to work in recreational on January 1.” As it is, even if the referendum passes, Club Pitbull will have to wait until January 1 to apply, and then wait perhaps five months for approval. This will severely impact business.
Oss says he plans to help get the word out before the November election about the economic benefits to Marion County to allow recreational businesses. “I’ve talked to about 75 owners,” he says. “It’s really ridiculous how some of us are treated like second class citizens when we are bringing millions of dollars into the state.”
Like Club Pitbull, Whitney was caught off guard by the commissioners’ decision. His company had just invested about $3.2 million in a 97-acre Marion County property for a recreational grow and production facility. The vote came “almost simultaneous to our spending that,” he says. “Had we known about this ordinance, we wouldn’t have closed this deal; it came out of left field. They essentially just cut the legs out from under our business plan.”
Prior to the commissioners’ decision, Whitney presented each individually with figures on how a recreational ban would harm economic activity in the county. He relates that in a private meeting with Commissioner Sam Brentano, Brentano “indicated that he didn’t care; he didn’t like the cannabis industry and it wasn’t something he’d change his mind on.”
“While I know the commissioners support business and economic development,” Whitney says. “I don’t think they appreciate the potential for jobs and economic development.”
Like Club Pitbull, Whitney has considered moving out of the county. “We invested $3.2 million into a property that’s essentially lost,” he says. He knows other cannabis businesses who might also relocate to a more welcoming business climate, “and that’s a shame. I’ve lived in Marion County and I want the best for it.”
The county will produce verbiage for the November referendum in upcoming months. A work session is scheduled for July 12, says Jolene Kelley, Marion County Public Information Officer, to discuss the ballot title and get started. She points out that, as with all Marion County meetings, this meeting will be announced to media outlets, through CCTV broadcast, and on the county’s website.
Once the referendum is done, Whitney says, “we will go to work. We can’t form the PAC until the referendum is completed.” Margo Lucas, owner of Cowgirl Cannabis and West Salem Cannabis Dispensary, plans to join the effort. She says industry members are gathering now to make sure they get the word out to voters.
“I believe Marion County is wasting taxpayers’ money on this measure,” she says, “I believe the people of Salem and Marion County will approve both medical and recreational in our area. The City of Salem is working very well with us; Marion County should be, too.”
“It is really an industry-wide issue and campaign,” Whitney says. “We want as many participants as possible.”