Posted by: Patricia Salkin | April 3, 2017

OR Court of Appeals Affirms Land Use Board of Appeals Decision Permitting County to Prohibit Growing of Marijuana

Editor’s Note: This summary was prepared by Shannon Q. Sullivan of Touro Law Center.

In 1998, Oregon voters approved the Oregon Medical Marijuana Act (OMMA), legalizing under state law the production and sale of marijuana for medical purposes. The OMMA was codified in ORS chapter 475B. In 2004, Oregon voters approved Ballot Measure 91, which legalized the production and sale of marijuana for recreational use under state law. Following the passage of Ballot Measure 91, the legislature adopted additional legislation enacting changes to both medical and recreational marijuana statutes. Ballot Measure 91 and the subsequent enactments were also codified in ORS chapter 475B.

The two statutes at issue in this case are ORS 475B.370 and ORS 475B.340. ORS 475B.370 establishes that marijuana is a “crop” as the term is used in various farming and agricultural statutes, including ORS 215.203, which authorizes local governments to adopt exclusive farm use zones and defines “farm use,” in part, as the current employment of land for the primary purpose of obtaining a profit in money by raising, harvesting, and selling crops. ORS 475B.340 authorizes local governments to adopt ordinances that impose “reasonable regulations” on business licenses to produce and process marijuana and sell marijuana wholesale or retail under Oregon’s recreational marijuana scheme. The statute defines the term “reasonable regulations” to include, among other things, reasonable limitations on where a premises for which a license or certificate for recreational marijuana production, processing, wholesale, or retail sale may be located.

Jackson County, Oregon approved two ordinances, Ordinance 2016-3 and Ordinance 2016-4, which are referred to together as “the ordinance.” The two ordinances are identical, except that Ordinance 2016-4 was enacted as an emergency ordinance of temporary duration and has been superseded by the permanent Ordinance 2016-3. The ordinance amended the county’s Land Development Ordinance (“LDO”), which regulates land use within the county, to include various regulations on marijuana-related land use. Among other changes, the ordinance established the types of land on which medical and recreational marijuana production would be allowed and on which types it would be prohibited. Section 2 of the ordinance, states that, as a result of the recent legislative enactments, recreational and medical marijuana production are considered a “farm use.” The Board of Commissioners found the Jackson County LDO did not allow a “farm use” to occur within the rural residential and rural use districts. The ordinance amended the LDO to allow marijuana production on lands zoned exclusive farm use (“EFU”), forest, and general and light industrial. Marijuana production was not authorized on land zoned rural residential, rural use, urban residential, and commercial.

Petitioner Sandra Diesel, a resident of Jackson County, argued against the ordinance before the Jackson County Board of Commissioners. After the Board of Commissioners adopted the ordinance, Petitioner appealed to the Land Use Board of Appeals (“LUBA”), arguing that the ordinance was unlawful because it conflicted with the County’s comprehensive plan. Additionally, Petitioner argued that the ordinance was invalid because it was not a “reasonable regulation” as described and authorized under ORS 475B.340. Specifically, she argued that the County had to demonstrate that it had a “substantial government interest” in adopting the regulation in order for it to be reasonable. LUBA ultimately rejected Petitioner’s arguments and affirmed the County’s adoption of the ordinances.

On appeal, Petitioner presented three arguments: First, that LUBA erred as a matter of law when it concluded that the ordinance did not conflict with the County’s comprehensive plan; Second, that LUBA erred when it concluded that the ordinance was a “reasonable regulation” authorized by ORS 475B.340; and Third, that LUBA made a mistaken interpretation of applicable law when determining what a “reasonable regulation” as applied to the facts existing in Jackson County. (Emphasis in original). The standard of review used by the court states that, on review, the court may reverse or remand a LUBA order only if it is “unlawful in substance or procedure,” “unconstitutional,” or “not supported by substantial evidence in the whole record as to facts found” by LUBA. ORS 197.850(9).

As to Petitioner’s first argument, that the ordinance’s prohibition of marijuana production on rural residential lands directly conflicted with the County’s comprehensive plan, which states that the purpose of rural residential land is to allow small-scale agriculture, the Court of Appeals disagrees, stating that the language cited by the Petitioner from the comprehensive plan is not one of requirement. The quoted paragraph by the Petitioner makes a broad descriptive statement, but does not instruct or require the County to take any particular action. The court states that even if the paragraph cited by the Petitioner were to be read as requiring the County to encourage a variety of types of agriculture in areas where residential development occurs, the County’s decision not to allow marijuana production on rural residential lands – a one particular type of agriculture –would not violate the command, because requiring the county to encourage a variety of type of agriculture is not the same as requiring the county to permit all types of agriculture. (Emphasis is original).

Petitioner’s second argument is that because the County did not make a finding in the ordinance declaring “[the] substantial government interest” the ordinance is supposed to promote, the County failed to sufficiently justify its decision not to authorize marijuana production on lands zoned rural residential, making that restriction invalid. Here, the court found that the Petitioner failed to cite authority that the County’s decision to prohibit marijuana production in some zoning districts, but not others, should be subject to heightened constitutional scrutiny. The County’s zoning decisions are authorized, both generally and specifically, but statutes that the Petitioner does not contend are unconstitutional or otherwise invalid, and thus Petitioner’s argument fails.

The third argument presented by Petitioner, not fully developed before LUBA, is that ordinance, at least as applied to the facts that exist in Jackson County, is unreasonable because, by making the overwhelming majority of grow sites in Jackson County illegal, the County has managed to effective eliminated grow sites in Jackson County. According to Petitioner, there are approximately 650,000 acres of land zoned for EFU, forest uses, and industrial uses. In 2015, of the 650,000 acres, only four properties zoned EFU were either sold or listed for sale. Petitioner contends that just because there is land eligible to grow marijuana does not mean that it is available to grow marijuana. (Emphasis in original). The court found that Petitioner failed to cite sufficient evidence to support her assertion that land is insufficiently available. The only evidence cited by the Petitioner was a letter that she herself had written to the Jackson County Board of Commissioners, stating that there were only four EFU-zoned properties sold or listed during 2015. The court found the Petitioner’s assertion said nothing about whether other land was available for rent or lease under some other agreement, not did it mention the availability of other lands zoned for the production of marijuana.

Diesel v. Jackson County, 284 Or.App. 301 (2017)

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