The History of Marijuana in Oregon

Oregon has a history with marijuana that dates back to 1973, when it became the first state to decriminalize small amounts of marijuana. Marijuana consumers found in possession of cannabis faced only a fine, but those in possession of large amounts faced criminal charges. As of 2014 though, Oregon voters ended their state’s prohibition of marijuana to legalize adult use and possession of marijuana while also regulating and taxing the sales of limited amounts of marijuana to individuals 21 and older.

Oregon has always been a leader in marijuana reform since it first decriminalized small amounts of the drug. After that step, the state only continued to move forward because in 1998 Oregon legalized medical marijuana along with a few other states including Washington, Arizona, and Nevada. Now, patients in Oregon with qualifying conditions can grow or have marijuana grown for them in order to treat their pain. Both medical and recreational marijuana are now legal in the state, but the laws are always evolving because state lawmakers continue to address issues that affect Oregon’s marijuana industry.

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Investment fund to take $250 million shot at pot despite legal gray area

A private equity fund co-chaired by a former BlackRock executive plans to raise $250 million to invest in marijuana businesses in places such as Los Angeles, Las Vegas and midtown Manhattan.

MedMen Opportunity Fund II, which looks for companies that cultivate, manufacture and sell pot, is setting up operations in the nation’s most popular tourist destinations. The effort is timely because New York recently added chronic pain as a qualifying condition for medical marijuana, California’s recreational market opens in 2018, and Nevada legalized adult weed use in July. Canada plans to legalize the plant nationally by July.

Reaching MedMen’s quarter-billion-dollar goal would mark one of the biggest investments yet in the nascent marijuana sector, which is still shunned by financial institutions skittish about a product that’s illegal under federal law. The industry is barred from most traditional banking services and faces political uncertainty from the Trump administration, where Attorney General Jeff Sessions is an ardent foe of state-sanctioned pot.

But the same issues that might deter others – the legal gray area and lack of widespread understanding of how the industry works – make legal cannabis a savvy investment, according to the people behind Los Angeles-based MedMen, who raised $60 million last year for the group’s first pot fund. The assets are cheaper because of the risk, and fewer investors are willing to get into the space.

“They were looking at markets where there was a lot of disruption and where there’s not a lot of transparency,” said Ruth Epstein, a former Goldman Sachs Group Inc. investment banker in San Francisco who bought into MedMen’s latest fund.

MedMen’s Wall Street bona fides comes from its co-chairman, Chris Leavy, who served as chief investment officer of fundamental equities at BlackRock, the world’s largest money manager. Before that, he was chief investment officer of equities at OppenheimerFunds. The presence of Leavy, 46, who took one of the biggest stakes in MedMen’s first round, is a big deal for investors who might otherwise be hesitant about a pot fund, Epstein said.

“That was the thing that really pushed me to pull the trigger,” she said.

The $6 billion legal cannabis market is expected to reach $50 billion by 2026, according to Cowen & Co. Recreational use has been legalized in eight states, including Maine and California, and the District of Columbia. Medical use is allowed in an additional 21, including New York.

“I never thought we’d find an emerging market right here in the U.S., but here we are,” Leavy said.

The firm is courting wealthy individuals like Epstein as well as family offices. The minimum buy-in for the firm’s second fund was $1 million, a level that rose to $3 million on Thursday, the company said.

MedMen began as a dispensary and consulting company for the weed business in 2010. That gig turned into a management company in 2013, which spawned the idea to create a private equity fund. The firm has grown to nearly 300 employees, up from 15 at the beginning of 2016.

The manpower is key to finding the few locations where the pot industry is allowed. Cannabis-related businesses, particularly stores, must be situated a certain distance from community centers such as schools and religious institutions. That makes snagging retail locations in high-traffic areas difficult but potentially more profitable.

MedMen has bought or leased real estate in high-traffic locations, including midtown Manhattan, on the border of Beverly Hills in Los Angeles and just off the Las Vegas Strip.

“If we can be in Los Angeles, Manhattan and Las Vegas, from a brand perspective we’re defensible all the way around,” said Chief Executive Officer Adam Bierman, 36, who co-founded the company. “What we didn’t realize is no one else was going to be able to do it – or at least be able to do it at this point in time.”

In total, MedMen’s management group and two funds own or operate 11 businesses: eight dispensaries, two growing facilities and one manufacturing plant. Another growing and manufacturing facility in Reno, Nevada, is expected to begin operations this year. The company is closing deals in Santa Monica and Venice, California, among others. It spent $26 million to acquire a company that had one of two licenses for a dispensary in Manhattan.

On a recent Saturday, Leavy and Bierman spoke with a group of about 20 potential investors at the Four Seasons hotel near Beverly Hills. The company has held three such events this year. The two entrepreneurs sought to quell fears about the regulatory ambiguity that they say makes the opportunity so great. The group then took a tour of MedMen’s dispensary in West Hollywood and a growing facility 30 minutes away.

“Let’s say these guys were energy guys, they’d know everything in the world about oil and gas. But none of the people here that might be marijuana investors know anything about marijuana,” Bierman said. “So much of it is the same – it’s like fundamentals of investing. But so much is different. Fundamentals of investing don’t include something that’s federally illegal.”

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Sandoval hasn’t consulted with Laxalt on gubernatorial run, wants Heller to support bipartisan deal on payments to health insurers

Gov. Brian Sandoval says he still hasn’t spoken or consulted with fellow Republican and incipient gubernatorial candidate Adam Laxalt about the office, despite the conservative attorney general’s pending “special announcement” this week.

The governor, who is constitutionally prohibited from running for a third term, said on Monday he had no plans to attend any of Laxalt’s 19 planned events throughout the first week of November and hasn’t spoken with the attorney general outside of commissions that they both serve on, such as the Board of Examiners.

“He hasn’t talked to me, he hasn’t asked to meet with me,” Sandoval said in an interview with The Nevada Independent outside a ribbon-cutting event at General Design & Construction. “If he, again it’s no big secret if he’s announcing to run for governor, he hasn’t consulted with me in any way.”

Sandoval said Laxalt hasn’t asked for his endorsement, but said he’d be happy to discuss the job with anyone interested in running for the job. He said he would meet with Democratic candidate and Clark County commissioner Chris Giunchigliani to discuss the duties of the job.

“She had asked to sit down with me and ask me about the job, and I’m willing to do that with any of them, with any of the candidates,” he said.

Sandoval also expressed some disappointment that Laxalt’s office declined to weigh in on the contentious topic of recreational marijuana consumption lounges last week.

State tax officials had asked Laxalt’s office for guidance on the somewhat grey area of whether or not state marijuana law — which prohibits public consumption of the drug — allows for “consumption lounges” if local governments approve them. Attorneys with the state’s Legislative Counsel Bureau concluded in a September opinion that nothing in state law prohibits local governments from allowing establishment of a lounge or special event where marijuana is used in the open.

Sandoval, who said he was opposed to the concept of marijuana lounges and was happy a bill allowing them died during the 2017 legislative session, said he was concerned the lack of a guidance would create an uneven enforcement of public marijuana consumption across different jurisdictions.

“The problem is, now you’re going to have a piecemeal approach to it, so Reno may do it one way, Henderson may do it another way, Las Vegas may do it another way, and you need to have consistency if you’re going to have it at all,” he said. “I had hoped for a more in-depth discussion and we didn’t get it, and so, that’s why we ask for opinions, to get one. It wasn’t helpful.”

Sandoval also said he hasn’t personally talked to Republican Sen. Dean Heller about his support for a proposed bipartisan solution from Tennessee Sen. Lamar Alexander and Washington Sen. Patty Murray to continue payments made to insurance companies to help provide coverage to low-income people.

Heller has not publicly said whether or not he’d support the measure, which has been co-sponsored by 12 Republicans and 12 Democrats in the Senate but is opposed by President Trump. Sandoval was sharply critical of the decision to end the so called cost-sharing reduction payments earlier this month, calling it “devastating” for the state.

Asked if he’d recommend Heller support the Alexander-Murray bill, Sandoval was clear.

“Of course I would,” he said. “That’s really important, but that’s his decision and he’s got to make a decision based on how he sees it.”

The Republican governor also said that the state had enough money to get through December after Congress failed to reauthorize funding for a federal health insurance program for low-income children that covers more than 27,000 Nevada kids. Though the state would face a $63 million budget shortfall this fiscal year if federal funding isn’t renewed, Sandoval said it was too early to consider a special legislative session to fill that funding gap.

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