Connecticut Governor Unveils Adult-Use Legalization Proposal in Budget Request

Connecticut Governor Unveils Adult-Use Legalization Proposal in Budget Request
After Steven Meland and Jeremy Breton, co-owners of Hotbox Farms, opened the doors to their 2019 clinic in Ontario, Oregon, lines formed, as they did at other clinics in the city.

It was 5 a.m. when he heard someone knocking on his window in the darkness outside.

Dan Cummings, community development director for Ontario, Oregon, a city of about 11,000 in the eastern part of the state, spent several mornings in his office in the days before the skirmish.

Previously, in November 2018, Ontario voters overturned a municipal ban on the sale of cannabis, and 56.8% of the 3,383 voters who cast ballots supported a local measure that would have imposed a 3% tax on retail sales of adult-use cannabis.

Four years earlier, when the citizens of Oregon passed Bill 91 in the 2014 general election to legalize the cultivation and use of adult-use cannabis throughout the state, the residents of Malheur County, Oregon, voted 68.3 percent against it. Under state law, counties and cities that rejected the measure by at least 60 percent had the option of banning cannabis legalization in their communities. That’s what Ontario’s city council did by voting to ban retail cannabis in 2015.

But when a citizen-led petition gathered enough signatures to put a new cannabis sales measure on the 2018 Ontario ballot, Cummings said he began drafting municipal development codes in advance in case voters overturned the ban. One of the laws he wanted to introduce was a licensing and permitting program for pharmacies, as well as 1,000-foot buffer zones between other retailers and between retailers and schools, city parks and residential neighborhoods. In addition, prospective owners of pharmacies had to demonstrate that they were property that met these buffer zone parameters before they were licensed by the city.

“We had prepared everything ahead of time, so we weren’t standing there with our pants on our ankles like in a lot of other cities,” Cummings said, “I went in at 4:30, which I did, trying to get all the codes and everything written down and ready, and around 5 o’clock I heard someone outside knocking on the window. I looked outside and there was somebody sitting on my bench. And at first I wondered what they were doing. And then it hit me like a brick: “Oh, I know what they’re doing. They’re settling. And of course that’s exactly what they were doing.”

Although the 2018 measure does not take effect until January 1, 2019, experienced clinic owners and potential clinic owners rushed to Cummings’ office in a mad rush in the week following the general election to claim one of Oregon’s most promising locations. Ontario is on the state border with Idaho and thus can take advantage of the most densely populated area of the Gem State, where Boise residents are no more than 80 miles away.

In the absence of medical or adult legalization in their state, Idaho residents have easy access to Ontario through Federal District 84. Southeastern Oregon and southwestern Idaho, in an area known as the “Treasure Valley,” are home to 700,000 people connected to Ontario via major highways, and their populations are expected to grow.

While local and state law enforcement had their say, the opportunities for business were enormous.

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Photo by Danny Ramirez | burntriverfarms.com

When Burnt River Farms co-owners Shawn McKay and Guss Young opened their dispensary in Ontario in 2019, they became a vertically integrated company in eastern Oregon.

Shawn McKay was one of the clinic entrepreneurs who considered taking over commercial land in Ontario after the 2018 referendum. He and his partner Gus Young, co-owner of Burnt River Farms, were already farming in Huntington, Oregon, about 30 kilometers northwest of Ontario. When it came to waiting in line outside Cummings’ office to open his first clinic, there were no guarantees, McKay said.

“He was definitely a stranger,” he said. “You just had to persevere and find a place. And we were lucky enough to find a place, and we were able to secure it. And we kind of went through the clearance process and we were familiar with him. So we kind of followed that evolution”.

The “highest county” in Oregon.

After the pressure hit, three clinics in Ontario opened in 2019, including Vidology in July, Burnt River Farms in August and Hot Spot Farms in October. According to the Oregon Liquor Control Commission (OLCC), the three stores sold more than $5 million worth of cannabis monthly through January 2020.

Five more dispensaries were established in 2020, including Top Crop and Zion Cannabis, which opened in May, Treasure Valley Cannabis Company, which opened in October, and The Bud House and Cannabis & Glass Installation Store, which opened later in the year. Cummings said six more clinics will be approved by 2021 and a total of 20 more could be added before the city is completely out of business, with appropriate buffer zones scattered throughout the city’s five square miles.

While cannabis sales in Oregon reached $1.1 billion in 2020 according to the OLCC, Oregon County ended the 2020 year with an impressive $91,713,684 in sales, all of which came from dispensaries in Ontario. As the first county in the state with cannabis sales of approximately $3,000 per capita, Malheur claimed the unofficial title of “Oregon’s Heist County,” ahead of three-time defending champion Baker County, which borders to the north.

According to Ontario Chief Financial Officer Kari Ott, in fiscal year 2020-2021, which ends June 30, the city is expected to receive about $3 million in cannabis tax revenue, which will add nearly $10 million to the annual general fund budget.

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Photo: D.J. Davis: hotboxfarms.com

Hotbox Farms is one of the first three dispensaries to open in 2019 in Ontario, Oregon. By January 2020, the three retailers were collectively selling more than $5 million per month.

Stephen Meland, co-owner of Hotbox Farms along with Jeremy Breton, said he hopes to advocate for the upper district to attract even more customers to the Ontario dispensary location.

“There’s definitely a great opportunity for cannabis tourism,” Meland said. “And I think the Oregon Liquor Control Commission has helped us promote Ontario as a destination for cannabis tourism. It’s a place where people can come and have legal access to cannabis. Obviously, we’re not recommending that they bring the cannabis back to their state or take it out of Oregon altogether, but it’s certainly a place where a very large number of buyers come.

Meanwhile, Multnomah County, which includes Oregon’s most populous city, Portland, has remained the state’s largest cannabis county with total cannabis sales of $313.4 million in 2020, or about $385 per person.

While Meland and Breton opened their Hotbox Farms dispensary in Ontario in 2019, they opened their first dispensary four years ago in Huntington (Baker County), a nearby town of about 400 people where city council members voted to legalize the sale of cannabis after the state passed Bill 91. Huntington, about 30 minutes from Ontario on I-84, was the closest community for Idahoans to buy cannabis at retail.

But once the clinics opened in Ontario, they became a closer destination for travelers in the Treasure Valley region. While cannabis sales in Ontario rose to $91.7 million in 2020, cannabis sales in Baker County fell from $30.2 million in 2019 to $7.9 million in 2020, a decline of about 74%, according to the OLCC. Given its location, that was to be expected, Meland said.

“I would say Huntington is a great place to learn about the industry and get a foothold,” he said. “Once we were able to operate both Huntington and the store in Ontario, we definitely saw an immediate increase in sales [in Ontario]. There was no need for Ontario to reduce or increase sales.

Ontario ban lifted

Meland and Breton, childhood friends, moved to Ontario in 2015 to start their medical culture and sell products in clinics throughout Oregon. They stopped growing medicine when the opportunity arose to open their dispensary, Hotbox Farms, in Ontario.

But opening another clinic was not necessarily the biggest obstacle they had to overcome. Getting a cannabis initiative approved in 2018 was a task in itself, Melande said. What started as an effort to gather signatures for a citizen petition turned into an organized survey of the public and political advisers for a structured campaign after Meland and Breton shrugged it off together.

In Misfortune County, a historically conservative stronghold – 69.4 percent of voters voted for Donald Trump in 2020 – Ontario citizens had previously voted for an anti-drug law after the state received a total of 91 votes in 2014, leaving council members wondering what motivated the new measure in the 2018 election, Meland said.

“The general feeling in town was that they didn’t want cannabis, and they had already voted not to have it,” he said. “So that was definitely a big obstacle to trying to start a conversation.” It would have been much easier to put it on the [2018] ballot, which would have been easy if the City Council had voted to put it on the ballot and let the people decide. But they weren’t interested either, because they felt people were already talking about it.

But while the initiative gained traction on the 2018 ballot by campaigning and collecting petition signatures, city officials formed an ad hoc committee on marijuana to ensure that their laws and regulations remain intact. Meland said they asked him to be on this committee because of his experience and expertise in managing cannabis businesses, and that committee members then appointed him and voted to chair the committee at their first meeting.

As part of his responsibility to the community, Mr. Meland said he wanted to make sure he would help create a fair and equitable system. Although Hotbox Farms received several dispensary licenses during the allocation process, it was not the first company to receive them, nor the first dispensary to establish itself in the city.

“A lot of that is due to the fact that the system we created was very fair,” he said. “There was no guarantee who would get the clinics.”

On the same day that Ontario voters voted to lift cannabis prohibition, they also elected a mayor – in a race that saw four candidates enter the opt-out program. Riley Hill took office with 40.1 percent of the vote. When the election results came in, the two results created a paradox, Meland said.

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Photo by Danny Ramirez | burntriverfarms.com

Like other clinics in town, Burnt River Farms offers more than just smoke flowers and pre-rolls. They also sell vapes, concentrates, edible foods, tinctures, herbal teas, etc.

Perhaps the common prejudice among Ontario residents was that they would see a group of children lining up to buy a smoked flower for a clinic, Meland said. But when they walked past his Hotbox Farms store in Huntington 30 minutes later, they saw seniors, former school teachers or businessmen buying non-smoking products like Topicals, Meland said.

“It started to bring down these walls for the community,” he said. “So even people who were normally supportive of the new mayor, who’s also been in town for a long time, maybe also said, ‘Well, you know, Riley [Hill], we like you. And we like most of your politics. But we also like hemp cream.”

Competitive market

After voters gave the go-ahead for cannabis clinics for adults in Ontario, it didn’t take long for this line to form in front of Cummings’ office of community development before the application process began. To make the process fair, the city eventually implemented a first-come, first-served system.

But as the door closed and people stood outside at 5 a.m., Cummings heard knocking on the window. Anticipating the rush to market – even before the law took effect – Cummings said he had devised a temporary enforcement period to maintain order outside his office.

“So I went out and I drew numbers to check on people because the first time we had people harassing other people,” Cummings said, “I went out and I drew footprints on the sidewalk and I divided them and I said, ‘Stay in that circle. Don’t touch anybody else or you’ll lose your place’.” This led to them all acting like they were in line”.

At the height of the 1960s, Cummings says he was a cowboy who liked to drink whiskey. Cannabis was never his thing. He moved to Ontario in 1974 and owned a surveying engineering firm until 2015, when he retired. When municipal officials heard of his retirement, they talked him into taking on the position of director of community development, he said. A few years later, he found himself at the center of Oregon’s largest cannabis retail business.

“I’d like to know,” Cummings said, smiling.

He said Ontario has always been an agricultural community, but it has always had a large shopping center on the Idaho border, where the sales tax is 6%. The sales tax in Oregon is zero.

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Photo by Danny Ramirez | burntriverfarms.com

Burnt River Farms offers a self-produce service in Ontario, Oregon, where it attracts customers from a nearby truck stop.

But it’s not just Idahoans’ commercial traffic that benefits from Ontario’s retail market, which now includes cannabis. There are two rest stops on I-84 in Ontario, the Pilot Visitor Centre and Love’s Travel Stop. McKay said this will attract even more customers to his Burnt River Farms clinic.

“We’re near a truck stop,” he says. “So we serve customers from all over the United States on a daily basis. I mean, being close to the border definitely has an impact, but we’re still in a very populated area. So, yeah, we want to serve everybody, no matter where they’re from.

There are now eight dispensaries in Ontario, with more to come, and owners need to sell their business in a competitive cannabis environment. At Burnt River Farms, McKay says, he and co-owner Young sell their store as a local business, producing many products in a farm-to-table environment. In addition, Burnt River Farms offers the only personal drive-through service in town, McKay says.

“Our customers order online, they go to the checkout and pay for their order, and they’re in and out in about two minutes, and it’s a pretty contactless service,” McKay said. “They can stay in their car. They can put their kids in their car. It’s just a good situation for everybody. And that’s what we’ve been doing since about April of last year.”

Meanwhile, Meland said his Hotbox Farms operation is also vertically integrated, with two grow facilities in Oregon, a processing facility and two wholesale licenses that he and co-owner Breton use in Ontario and Portland to act as buyers and sellers of warehouses for other dispensaries.

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Photo: D.J. Davis: hotboxfarms.com

Hotbox Farms co-owners Stephen Meland (left) and Jeremy Breton (right) share a moment on stage with Snoop Dogg during a free impromptu concert at the grand opening.

In addition to their home in Ontario, Meland and Breton are marketing their dispensary as a meeting place for VIPs and celebrity appearances. For the grand opening in October 2019, they asked Snoop Dogg to perform an impromptu concert that Meland said drew more than 10,000 people. They had only about 48 hours after the OLCC notified them that their permit would be granted, and they got it, meaning that Meland and Breton did not actually apply to municipal authorities to bring Snoop Dogg to the free concert.

“The city was a little overwhelmed,” Meland said. “We talked to the city manager before it happened and he certainly expressed his disappointment, as did the city police chief. We let them know that the cat was a little out of the bag and we apologized for the lack of communication, but the show would go on. Again, they were very upset”.

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Photo: D.J. Davis: hotboxfarms.com

The official opening of Hotbox Farms with Snoop Dogg drew thousands of fans, unbeknownst to the community.

Ontario Police Chief Steven Romero, who had joined the council four months earlier, said his first meetings with Meland were not what he had hoped.

“Snoop Dogg’s concert surprised me, but fortunately it went well,” said conductor Romero. “I don’t hold grudges. I also don’t think [Meland] does, or thinks he doesn’t. But I haven’t had much contact with him since.

Meland said there were no significant incidents, such as fights or injuries, and that he and Breton had settled everything in a subsequent conversation with City Manager Adam Brown, when they agreed to pay the community about $10,000 for overtime costs for police, firefighters and other city officials.

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Photo: D.J. Davis: hotboxfarms.com

Hotbox Farms brought TikTok’s star Doggface and his longboard to town to see flowers.

“The city has agreed to work with us the next time we want to host an event,” Mr. Meland said. “The next important step is that Hotbox is not done hosting events. This is undoubtedly why we are known and loved. For a community of our size, it’s really nice to have people like [Snoop Dogg] at shows in Ontario. ”

Hotbox Farms continued to host events with celebrities such as Jim Belushi, Cypress Hill’s B-Real and Doggface, the viral sensation TikTok from his lengthy skateboarding music video featuring Fleetwood Mac’s “Dreams.”

Local law enforcement

When the citizens of Oregon passed Bill 91 in 2014, it gave the state the authority to impose a 17 percent tax on adult-use cannabis sales, which would then be distributed to local municipalities based on the number of residents and the number of clinics. In Ontario, municipal authorities plan to use most of this money for enforcement.

But Measure 91 does not take into account the broader community, which in this case would include Idaho and other parts of eastern Oregon, meaning that cannabis sales in Ontario technically subsidize big cities in western Oregon. While state taxes on cannabis sales in Ontario totaled about $15.6 million in 2020, the city only received $65,869 back from the state through the apportionment formula, Ott said.

Chief Romero said the money has had little impact on the city’s need to expand its police department, which currently has a budget of 24 full-time officers with four auxiliary officers.

Ontario has so far funded two officers through a local cannabis tax. So Romero hopes his police department will realize some of the $3 million in tax revenue the city anticipates for the 2020-21 fiscal year to expand his agency some more, he said. But that source of revenue is still open for discussion between Ontario’s elected officials and the city’s budget committee.

“I am asking for more full-time staff at this time because this department has been underfunded and understructured for some time,” Chief Romero said. “Given the workload it produces and responds to, it is severely understaffed.”

Regarding his department’s relationships with clinic owners, Chief Romero said his staff takes a “hands-off” approach to being present at every point in the city where cannabis outlets are located.

“They didn’t want to be stigmatized because it would hurt their business that the police were visible in their neighborhood,” he said. “So I can tell you this: I did not actively approach the owners, and they did not respond. It’s not a confrontational relationship, I can guarantee you that. But we don’t really have a lot of communication when the event is not taking place on their premises.”

In his previous position as chief, Romero was commander of the Hawthorne Police Department in southwest Los Angeles. He has also held other positions, including deputy director of the Los Angeles Police Department’s Interagency Interdiction Crime Task Force (IMPACT), one of the largest transnational drug enforcement agencies in the country.

But when it comes to coordination between Ontario and Idaho law enforcement regarding cannabis dispensaries that serve out-of-state customers, Chief Romero stated that there are no such dispensaries.

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Photo: D.J. Davis: hotboxfarms.com

Hotbox Farms Budtenders serve customers from far and wide.

“There is no cooperation with Idaho because it is a legal activity here, and we are not in a position to set up marijuana traps as such,” he said. “Law enforcement in Idaho takes a different view. They are still very tough, and it is still very illegal in their state. But for what is considered legal in Oregon, there is no reason for law enforcement in Oregon to cooperate with law enforcement in other states.

Both Chief Romero and Cummings said that if they had to gamble, probably 90% of cannabis sales in Ontario would come from Idaho buyers.

Meland said his team at Hotbox Farms treats every customer equally, regardless of place of origin, because it is legal in Ontario to purchase cannabis products from their dispensary. What is illegal, however, is for customers from Idaho to bring cannabis to their homes in the Gem State.

“We don’t recommend that our clients insist on this issue or try to go against another state’s laws,” Meland said. “But we certainly enjoy living and working in Oregon, where we can participate in this industry.”

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