How to Solve Land Use and Zoning for a Cannabis Business

The process of obtaining a Land Use Compatibility Statement (LUCS) in Oregon

By Trevor Kupfer | Last updated on May 20, 2022

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If you’re looking to create a cannabis enterprise in Oregon, the real estate approval process is crucial. The Oregon Liquor Control Commission (OLCC) regulates and taxes the state recreational marijuana industry, and will not issue an operating license without the proper land use and zoning.

“The most important thing is making sure that the land you’re using or the land you want to get is suitable,” says Andrew C. DeWeese, an attorney with Green Light Law Group in Portland. “There’s a process that you have to go through with the local jurisdiction to get what’s called a Land Use Compatibility Statement, or a LUCS for short. That is a piece of paper endorsed by the local jurisdiction and then given to the OLCC to prove that under the relevant local laws, rules and regulations, this particular tract of land that you’re using is appropriate for a marijuana license.”

Unlike filling out a license application, DeWeese says the local government land use process can be very tricky and it is advisable to seek out an attorney experienced in cannabis law for assistance.

Zoning Districts and Use Permits

“The first kind of threshold consideration when you’re looking at getting a marijuana license is, ‘Will the land I have in mind work? Or is there land available in the county where I want to be or the city where I want to be that is going to work for this?’” DeWeese says. “In Huntington, for example, they are very close to Idaho border. The town is probably less than 1,000 people, but they have the marijuana dispensary that probably has the highest gross sales of any in Oregon. Well, in Huntington, you can count on probably one or two hands the number of pieces of property that are properly zoned for a marijuana operation. It’s very important to understand where you can operate your business and what you can and can’t do.”

Marijuana is defined as a crop under Oregon law, and the Right to Farm Act says that if your land is zoned for farm or forest use, the local jurisdiction can’t make it impermissible to grow marijuana there. “So if you’re down in Jackson County or Josephine County and you’ve got farmland and you want to do a marijuana license there, the process for getting that Land Use Compatibility Statement is relatively straightforward,” DeWeese says. “But there are some counties that simply don’t allow any recreational marijuana businesses. If you’re in a jurisdiction that does, it will have specific local ordinances establishing time, place and manner restrictions on where these businesses can locate and what they can do. And a lot of times, you’ll have to go through an approval process just to get the Land Use Compatibility Statement.”

The last thing any business wants is to purchase land for a recreational marijuana operation, only to find out that the municipalities, for whatever reason, will not approve the land use. Without land-use approval, an Oregon marijuana license cannot be obtained. There are still several local jurisdictions in Oregon that expressly forbid all recreational marijuana businesses. The OLCC has provided the full list of these jurisdictions. 

Establishing a recreational marijuana business in Oregon is complicated. Getting the appropriate license and zoning are just the beginning of many issues that must be addressed before you get to the point of cannabis products. 

For more information on this area of law, see our overview of cannabis law and land use/zoning.

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