The last few months have been a bit of a whirlwind for cannabis producers in Josephine County, Oregon. Back in September, a coalition of producers stopped a county ordinance targeting farms in rural residential zones that would have drastically increased setback requirements, required the OLCC licensee itself to own the real property, and prohibited any farm from using private roads, easements, or owner-maintained public right-of-ways.
Celebration proved premature, as the county adopted a new ordinance on December 6, 2017 that is arguably worse. The ordinance targets all properties zoned rural residential with more than 12 mature plants and drastically curtails commercial cannabis production. For example, on rural residential lots:
- Cannabis production is banned on all lots or parcels of five acres or less.
- Cannabis production on lots larger than five acres is limited to an eighth of the size that would otherwise be allowed under OLCC rules.
- 100 foot setback are on all sides are required for all structures and grow canopies.
- The OLCC licensee must itself own the real property.
Farms hoping to avoid these requirements must have been fully licensed by the OLCC before March 6, 2018 in order to apply for a variance from these regulations.
As expected, earlier this year a group of growers filed suit against the county before Oregon’s Land Use Board of Appeals (“LUBA”). Although LUBA petitions are not easily available, LUBA issued an order on February 5, 2018 that stayed (froze) implementation of the ordinance pending further proceedings, and gives us an insight into the claims raised by the petitioners.
The petitioners were tasked with establishing 1) “a colorable claim of error in the land use decision or limited land use decision under review;” and 2) “that the petitioner[s] will suffer irreparable injury if the stay is not granted.” The petitioner met both thresholds, so let’s see how they did it.
A Colorable Claim of Error
In Thurston Hills Neigh. Assoc. v. City of Springfield, 19 Or LUBA 591 (1990), LUBA stated that the standard to establish a colorable claim of error is “not a demanding standard”. The petitioners do not need to establish they will win on the merits. Rather, they need only show “that the errors alleged are sufficient to result in reversal or remand of the decision if found to be correct.” In fact, in Thurston Hills, LUBA simply looked to whether the petitioner’s claims were “devoid of any legal merit.” In the present case, LUBA found that the petitioners claims have legal merit. Specifically, the petitioners argue:
- The ordinance violates ORS 215.130(5) because it does not allow farms operating at the time the ordinance was adopted to continue operating. ORS 215.130(5) essentially prohibits a county from adopting an ordinance that retroactively bans existing lawful uses.
- The county failed to give mandatory notices to the owners of any properties that would be limited or prohibited from any previously allowed uses.
- Local jurisdictions are only allowed to place “reasonable regulations” on commercial cannabis production, and this ordinance does not qualify. Note that this same argument was advanced against a similar ordinance in Jackson County but that LUBA and the Oregon Court of Appeals determined that Jackson County’s ordinance qualified as a reasonable regulation.
Because the “irreparable injury” requires an injury that cannot be compensated adequately in money damages, the petitioners focused primarily on the existing strains and customer goodwill that would disappear if the county succeeds in banning their farms. LUBA easily sided with petitioners on this point, but the question got a bit trickier because the petitioners needed to also show that the county’s conduct was “probably rather than merely threatened or feared” and that “the resulting injury must be probably rather than merely threatened or feared.”
The county argued that these negative effects on petitioners were overblown because the ordinance provided an opportunity for non-compliant properties to obtain a non-conforming use application. The petitioners cleverly noted that the OLCC will likely refuse any license renewals while a licensee is undertaking the non-conforming use process, so even participating in the process itself puts the farms at risk. The court was convinced and issued a stay.
Next Steps and Predictions
The petitioners and the county will advance their arguments at a hearing today, so we will soon find out whether this ordinance qualifies as a “reasonable regulation.” Similar arguments against Jackson County were shot down, but perhaps these petitioners have identified some nuances that will win the day. In this case, with the retroactivity and notice problems identified by the petitioner we feel comfortable putting our money on the growers.