The Oregon Legislature recently passed Senate Bill 587 (“SB 587” or the “State Bill”), which imposes a new tobacco and nicotine licensure program. The State Bill empowers the “governing body of a local public health authority” to enact an ordinance enforcing enhanced standards regulating tobacco products and inhalant delivery systems for purposes related to public health and safety. “A local public health authority” includes the governing body of a county. (See, ORS 431.03). Though the Operative Date of the Bill is January 1, 2022, local authorities may draft and enact ordinances prior to that date, so long as the effective date is no earlier than January 1, 2022.
On November 2, 2021, the Board of County Commissioners, acting as the Local Public Health Authority for Washington County, enacted Ordinance 878 (the “County Ordinance”). The County Ordinance purports to establish enhanced regulations for tobacco products in Washington County. The County Ordinance, however, uses definitions that diverge from existing statewide definitions, resulting in what many commentors have speculated is a broadly applicable ban on inhalable cannabis products sold at recreational marijuana premises licensed by the Oregon Liquor and Cannabis Commission (OLCC).
The County Ordinance is not well written. On its face, and reading only the language and definitions of the County Ordinance, the concerns of cannabis industry advocates and commentators are understandable. However, when read in context of the State Bill, statewide definitions of “inhalant delivery systems,” and Measure 91’s limitation on local regulation of cannabis businesses, it is unlikely the County Ordinance would withstand judicial scrutiny as a ban on inhalable cannabis.
The State Bill specifically exempts Inhalant Delivery Systems not containing nicotine sold at OLCC licensed retail marijuana premises.
The State Bill imposes a new licensure requirement on retail sale of tobacco products and inhalant delivery systems within the State of Oregon. (See, Section 3, SB 587). However, in the very next section, the State Bill exempts OLCC licensed retailers from the new licensure requirements unless an inhalant delivery system containing nicotine is sold at that retailer (the Limiting Principle). Section 4 expressly provides
Notwithstanding section 3 of this 2021 Act, sections 1 to 14 of this 2021 Act do not apply to a person making a retail sale of an inhalant delivery system at a medical marijuana dispensary registered under ORS 475B.858 (establishes recreational cannabis establishments) or at a premises for which a license has been issued under ORS 475B.105, unless the person makes a retail sale of an inhalant delivery system that contains nicotine.
Thus, the presence or absence of nicotine is the key factor in whether the State Bill’s licensing regime applies to OLCC retailers, and OLCC retailers not currently engaged in the sale of inhalant delivery systems containing nicotine are exempt from the requirements of the State Bill.
The Ordinance inaccurately defines Tobacco Product and Inhalant Delivery System.
The County Ordinance was drafted and enacted pursuant to the authority conferred by the State Bill. Unfortunately, the County Ordinance did not adopt existing statewide definitions, but created a new and confusing definition of “inhalant delivery system.”
ORS 431A.175(1)(a)(A) defines “inhalant delivery system” as:
(i) a device that can be used to deliver nicotine or cannabinoids in the form of a vapor or aerosol to a person inhaling from the device; or
(ii) a component of a device described in this subparagraph or a substance in any form sold for the purpose of being vaporized or aerosolized by a device described in this subparagraph, whether the component or substance is sold separately or is not sold separately.
And goes on to explicitly exclude “tobacco products” from the definition of “Inhalant Delivery System”, stating at ORS 431A.175(1)(a)(B): “’Inhalant Delivery System’ does not include (b) Tobacco Products”.
ORS 431A.175(1)(b) defines “Tobacco Products” as:
(A) Bidis, cigars, cheroots, stogies, periques, granulated, plug cut, crimp cut, ready rubbed and other smoking tobacco, snuff, snuff flour, cavendish, plug and twist tobacco, fine-cut and other chewing tobaccos, shorts, refuse scraps, clippings, cuttings and sweepings of tobacco and other forms of tobacco, prepared in a manner that makes the tobacco suitable for chewing or smoking in a pipe or otherwise, or for both chewing and smoking;
(C) A device that:
(i) Can be used to deliver tobacco products to a person using the device
(ii) Has not been approved by the United States Food and Drug Administration for sale as a tobacco cessation product or for any other therapeutic purpose, if the product is marketed and sold solely for the approved purpose
The existing statewide definitions thus recognize a distinction between tobacco and inhalant delivery systems such that an inhalant delivery system may be a tobacco product, but it is not by definition a tobacco product independent of the substance it is being used to deliver. In other words, an inhalant delivery systems’ status as a tobacco product depends on whether the device is used to deliver tobacco. Cannabis products intended to be administered through an inhalant delivery system are not tobacco products under Oregon state law.
The County Ordinance, however, redefines both “Tobacco Product” and “Inhalant Delivery System” such that all inhalant delivery systems are tobacco products regardless of the presence or absence of tobacco or nicotine. These overly broad definitions of tobacco products in the County Ordinance include any inhalant delivery system, and define any substance administered through an inhalant delivery system as a tobacco product.
The County Ordinance defines “Tobacco Product” at Chapter 2 Definitions 2.20 (F) as:
Tobacco Product. (1) Any product containing, made of, or derived from tobacco or nicotine that is intended for human consumption or is likely to be consumed, whether inhaled, absorbed, or ingested by any other means, including, but not limited to, a cigarette, a cigar, pipe tobacco, chewing tobacco, snuff, or snus; (2) Any inhalant delivery system, and any substances that may be aerosolized or vaporized by such device, whether or not the substance contains tobacco or nicotine; or (3) Any component, part, or accessory of (1) or (2), whether or not any of these contains tobacco or nicotine, including, but not limited to, filters, rolling papers, blunt or hemp wraps, hookahs, and pipes. (emphasis added).
At Chapter 2.20(C) the County Ordinance defines Inhalant Delivery System to mean:
A device that can be used to deliver nicotine or cannabinoids in the form of a vapor or aerosol to an individual inhaling from the device, or a component of such a device or a substance in any form sold for the purpose of being vaporized or aerosolized by such a device, whether the component or substance is sold separately or is not sold separately. Inhalant delivery system includes, but is not limited to, an e-cigarette, e-cigare, e-pipe, vape pen, or e-hookah.
The County Ordinance also imposes a blanket prohibition on “flavored tobacco products” and “flavored synthetic nicotine product” of all kinds, for consumers of all ages, at 2.30 B “Prohibitions”:
No person shall sell, offer for sale, or otherwise distribute any flavored tobacco product or flavored synthetic nicotine product.
While the County Ordinance does not provide a distinct definition for “Flavored Tobacco Product,” Chapter 2.20(B) defines “Flavored Product” as “…(a)ny synthetic nicotine product or tobacco product that contains a taste or smell, other than the taste or smell of tobacco…”. Because “Flavored Product” includes a tobacco product containing a taste or smell other than tobacco, and the County Ordinance definition of “Tobacco Product” includes all inhalant delivery systems regardless of their content, an inhalant delivery system containing a cannabinoid product (i.e. a smell or taste other than tobacco) is a “flavored tobacco product” falling under the scope of the County Ordinance prohibition. Thus, the plain language of the County Ordinance bans inhalable cannabis products.
Despite the plain language of the County Ordinance, it is unlikely that attempts to enforce the County Ordinance as an outright ban on inhalable cannabis products would be successful. Firstly, the State Bill conferring Washington County the authority to enact the County Ordinance grants authority to localities to regulate nicotine, tobacco and inhalant delivery systems as those terms are defined by statute, and as referenced by the State Bill. The State Bill does not confer any authority on localities to redefine existing statutory terms or add an entire category of products to the State Bill. Importantly, the State Bill specifically exempts OLCC retailers that do not sell inhalant delivery systems containing nicotine from the new licensing requirements imposed by the State Bill. Thus, in the unlikely event that Washington County attempted to enforce the Ordinance against inhalable cannabis products using the authority conferred by SB 587 as a basis, the County Ordinance would fail.
The Ordinance creates unreasonable restrictions on Oregon marijuana businesses that have not met the procedural requirements under Oregon Measure 91.
Even if the Washington County Ordinance were considered a valid exercise of the authority conferred by the State Bi
ll, the County Ordinance still fails to meet the basic procedural requirements for local control of marijuana businesses under Measure 91. Measure 91, codified in ORS 475B, allows counties and municipalities to impose time, place and manner restrictions (“TPM restrictions”) on marijuana businesses so long as those regulations meet a standard of “reasonableness.”
Cities and counties may adopt reasonable time, place and manner regulations of the nuisance aspects of establishments that sell marijuana to consumers if the city or county makes specific findings that the establishment would cause adverse effect to occur.
Measure 91, Section 59.
ORS 475B sets out examples of TPM restrictions where we would apply the “reasonableness” standard:
- Reasonable conditions on the manner in which a (licensed) marijuana producer… may produce marijuana;
- Reasonable conditions on the manner in which a (licensed) marijuana processor…may process marijuana;
- Reasonable conditions on the manner in which a (licensed) marijuana wholesaler… may sell marijuana at wholesale;
- Reasonable conditions on the manner in which a (licensed) marijuana retailer… may sell marijuana items;
- Reasonable limitations on the hours during which a (licensed) premises… may operate;
- Reasonable requirements related to the public’s access to a (licensed) premises; and
- Reasonable limitations on where a (licensed) premises… may be located.
While localities have been given flexibility to create regulations tailored to the businesses in their jurisdictions, no TPM restriction has ever gone so far as to completely ban an entire class of products sold by an OLCC licensed retailer. Additionally, in enacting the County Ordinance, Washington County did not reference Measure 91 or ORS 475B, and did not make any findings of specific adverse effects of inhalable cannabis products, which is a threshold requirement for establishing the reasonableness of any TPM restriction. Instead, the County Ordinance makes findings pertaining only to negative implications of tobacco use and the sale of tobacco and nicotine products to individuals under 21 years of age.
Finally, the County Ordinance is unlikely to pass muster as a TPM restriction under Measure 91 because Measure 91 also contains a rule of statutory construction. Section 58 specifically provides that Measure 91 “shall be paramount and superior to and shall fully replace and supersede any and all municipal charter enactments or local ordinances inconsistent with it.” Thus, the County Ordinance does not meet the requirements of a reasonable TPM restriction under Measure 91 or ORS 475B.
The County Ordinance is poorly drafted, and as a result has created confusion and uncertainty. The authority for the County Ordinance comes from SB 587, which specifically exempts OLCC licensed retailers from regulation so long as they do not sell nicotine products. Additionally, the County Ordinance does not make any findings necessary to meet the requirements of Measure 91, if, in fact the intention of the County Ordinance is to create a sweeping ban on inhalable cannabis products. Should Washington County attempt to enforce the County Ordinance against OLCC licensed retailers, it is unlikely the ban would survive. Prior to the effective date of the County Ordinance, Washington County could, and should, repeal or revise the language of the Ordinance so as to properly apply the Limiting Principle as to OLCC licensed retail marijuana premises, consistent with the State Bill.
Source: JD Supra