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How to Open a Marijuana Dispensary in Oregon

Created by FindLaw's team of legal writers and editors.

Last Updated: 8/20/2019

If you are over 21 years old and are interested in starting a marijuana dispensary or other type of CBD business, you need to be aware of regulation and compliance issues, and you need a solid business plan to avoid the common pitfalls of new businesses. This is especially true in Oregon, where the early legalization of marijuana — 1998 for medical use and 2014 for recreational use — means you face the competition of veteran cannabis companies. Staying ahead of trends and compliance issues can give your new business a helpful edge.

Cannabis Business Laws You Need to Know

The table below outlines the laws and rules you need to follow in Oregon, and where to learn more about getting your new business off the ground:

Important Laws to Know

Restrictions on Growing Marijuana

Who Can I Sell to?

  • Customers must be over 21 years old
  • A state-issued ID or passport is required
  • A medical ID is required for medical marijuana sales

What Can I Sell?

There are OLCC limits to how much you can sell to one customer in a 24-hour span:

  • One ounce of marijuana
  • Five grams of cannabinoid extract or concentrate – often used for vape pens or e-cigarettes
  • 16 ounces of solid forms of cannabinoid – usually a gummi, candy, or chocolate
  • 72 fluid ounces of liquid cannabinoid – such as body oil, consumable oil, or infused drinks
  • Four immature plants
  • 10 marijuana seeds

Note: Synthetic cannabinoids are “new psychoactive substances” (NPS) created by spraying lab-created chemicals on shredded plants. Many versions of NPS are illegal to create or sell.

Licenses and Permits

  • Depending on your role in the industry, you will need to secure a variety of licenses and pay a license fee
  • Retail documentation and signs are required in stores
  • You can apply online for licenses and permits after creating an online account
  • You can also apply for a Hemp Certificate (required to bring hemp flowers, concentrate, or extracts to licensed processors) or a Certificate for Research

Taxes

  • 17% tax on all products sold
  • Price and total tax must be clearly listed on the receipt
  • The Oregon Department of Revenue collects some marijuana taxes

What Should I Charge?

This is a very competitive marketplace. You may want to check local pricing for products and carefully consider your business plan, funding, and loans when choosing pricing per item.

Cost to Open a Dispensary

Tribal Lands

Federal law recognizes that tribes have their own sets of laws on their land. Growing or selling cannabis or starting a business is regulated by the tribal governments.

State Parks

Products cannot be sold or possessed on protected federal park land.

State Lines

Taking marijuana across state lines without a proper business license is a federal offense.

Location of Your Business

Zoning Laws

  • Your business can only be in a properly zoned area approved by a Land Use Compatibility Statement (LUCS).
  • Other Local laws may apply to your business depending on where you decide to have a store.

Advertising

Laws are constantly changing – at this time, there are no regulations on who you can and cannot advertise to.

Packaging and Labels

  • The OLCC does not have regulations on packaging or labels currently, but they are pledging to enforce child-resistant packaging laws in the future.
  • Retail stores must have English and Spanish signs banning minors from entering and banning on-site consumption, provide poison and pregnancy warnings, and have at least one Educate Before You Recreate poster.

Liability for DUIIs

Retailers of cannabis are not held liable when a customer buys marijuana and is later arrested or charged with driving under the influence of intoxicants (DUII). Driving while impaired by drugs is still illegal.

Effect on Full-Time Jobs

If you currently work for a cannabis-related business, you may need to consider conflict of interest or non-compete regulations in your employee contract.

Criminal Records

  • You cannot have charges related to Schedule I or Schedule II controlled substances within the past two years
  • No more than one criminal charge of this kind in Oregon

Oregon Governments and Organizations to Know

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

What to Expect in the Process

The application process is outlined in the OLCC Division 25 Section 845-025-1030. You can expect to:

  1. Submit your business forms to the Commission
  2. Request other parties to submit their forms, including:
    • Owners
    • Financial investors
    • Lenders
    • Anyone with more than 10% interest in the company
    • Partners
    • Other legal entities
    • Investors
    • Directors
    • Stockholders
    • Officers
    • Corporate partners
  3. Pay application fees to the Commission
  4. Submit names, fingerprints, information, and $35 for background checks for all owners, partners, and financial investors
  5. Submit requested details and business plan (listed out in the marijuana business plan below with more information)
  6. Wait for application and background checks to be reviewed
  7. Wait for approval of the application and background checks

Once approved, you can begin creating your new cannabis business.

Marijuana Business Application Denial Process

If the Commission denies your application, you can request to be reconsidered and have a hearing about your application. You will have the chance to address any concerns about the denied application. Any changes to the application or people involved must be sent in through a new form. You will likely need to pay the fees again.

Creating Your Marijuana Business Plan

When you start the application process for your startup business, the state requires specific details, including:

  • Personal information: a clear background check and forms focused on your experience and goals
  • Company info: company name, address of where the business functions, and mailing address
  • Building or location info: proposed floor plan for buildings, proof of right to occupy the premises, a Land Use Compatibility Statement (LUCS), plan for building security, employee qualifications, proposed training, product transport, etc.
  • Current Secretary of State phone number
  • Funding information for all third parties or legal entities
  • A business operating plan – professional guilds or resources can help
  • Documents for the specific licenses you need (see table above)
  • $250 non-refundable application fee

Unsure where to start? Oregon.gov provides a checklist to help new businesses get on their feet and a detailed, step-by-step business guide for marijuana businesses.

Marijuana Industry Jobs

Many jobs are available in the cannabis industry:

  • Producer– grows and harvests marijuana plants
  • Lab owner or lab tech – tests plants and products for compliance with OHA rules
  • Processor – transforms raw marijuana plants into other usable forms
  • Wholesaler – buys products in bulk and sells to licensed stores
  • Retailer – sells recreational products directly to the customer
  • Dispensary owner – sells medical marijuana to licensed patients
  • Transporter – drives plants to processors or products to stores

Related Resources

Learn About Marijuana Business Compliance

Do You Need an Attorney When Starting a Cannabis Business?

Some businesses can get off the ground without an attorney’s help, but cannabis businesses are rarely among them. Due to the highly regulated industry and large financial investments required, you may want to seek legal advice on the type of business structure to choose and how to protect your best interests.

It can be useful to have your attorney picked out before a problem occurs. They can review your business plan to help you avoid costly mistakes. You can also find an Oregon attorney to handle the business startup and marijuana licensing for you -- saving you time and money as you launch your business.