State ex rel Elitextrx, LLC v. Siegel

Court of Appeals of Oregon·Decided February 22, 2024·No. A179527·Published

Opinion

No. 114 February 22, 2024 91

IN THE COURT OF APPEALS OF THE STATE OF OREGON

STATE ex rel ELITEXTRX, LLC, an Oregon limited liability company, Plaintiff-Appellant,

v.

Scot SIEGEL,

Planning Director of Multnomah County, and MULTNOMAH COUNTY,

Defendants-Respondents.

Multnomah County Circuit Court 22CV15736; A179527

Stephen K. Bushong, Judge. Argued and submitted October 23, 2023. Kevin J. Jacoby argued the cause for appellant. Also on the brief were Brittany Adikes and Green Light Law Group.

Katherine Thomas argued the cause for respondents. Also on the brief were Jenny M. Madkour.

Before Ortega, Presiding Judge, and Powers, Judge, and Hellman, Judge.

POWERS, J. Affirmed.

92 State ex rel Elitextrx, LLC v. Siegel

POWERS, J. This is an appeal from a circuit court’s dismissal of a mandamus action brought by plaintiff Elitextrx, LLC against the planning director for Multnomah County and Multnomah County (collectively, the county). The circuit court dismissed the action, agreeing with the county’s position that, under ORS 475C.053, it was not yet required to issue the Land Use Compatibility Statement (LUCS) that plaintiff requested in connection with obtaining a license to relocate its marijuana production facility. Construing ORS 475C.053(2), we conclude that whether a land use is “outright permitted” or “conditional ,” as those terms are used in the statute, depends on whether the proposed use requires discretionary local permit approval “within the given zoning designation where the land is located.” Here, the county zoning designation requires such discretionary approval and, thus, the county was not required to issue the LUCS before plaintiff obtained that discretionary approval. Accordingly, we affirm.

We start with a brief overview of the governing statutes and county ordinances. To obtain a marijuana production license from the Oregon Liquor and Cannabis Commission (OLCC), ORS 475C.065, an applicant must request a LUCS from the city or county that authorizes the land use, ORS 475C.053.1 See also, e.g., OAR 845-025-1090 1 ORS 475C.053 was amended in 2023 after the circuit court’s decision in this case. Or Laws 2023, ch 519, § 10. Because that amendment did not change any operative text in the statute, we cite to the current version. ORS 475C.053 provides, in full:

“(1) Prior to receiving a license under ORS 475C.065, 475C.085, 475C.093, 475C.097 or 475C.548, an applicant shall request a land use compatibility statement from the city or county that authorizes the land use. The land use compatibility statement must demonstrate that the requested license is for a land use that is allowable as a permitted or conditional use within the given zoning designation where the land is located. The Oregon Liquor and Cannabis Commission may not issue a license if the land use compatibility statement shows that the proposed land use is prohibited in the applicable zone.

“(2) Except as provided in subsection (3) of this section, a city or county that receives a request for a land use compatibility statement under this section must act on that request within 21 days of:

“(a) Receipt of the request, if the land use is allowable as an outright permitted use; or “(b) Final local permit approval, if the land use is allowable as a conditional use.

Cite as 331 Or App 107 (2024) 93

(2)(a) (providing that OLCC “[m]ust receive a land use compatibility statement from the city or county that authorizes land use in the city or county in which the applicant’s proposed premises is located prior to acting on an application * * *”); OAR 845-025-1180(2)(b) (similarly requiring a LUCS for an application for a change of location “for the new proposed location from the city or county that authorizes land use for that location”). The LUCS “must demonstrate that the requested license is for a land use that is allowable as a permitted or conditional use within the given zoning designation where the land is located.” ORS 475C.053(1). OLCC cannot issue a license if the LUCS “shows that the proposed land use is prohibited in the applicable zone.” Id. The city or county is required to act on a request for a LUCS within 21 days of either “[r]eceipt of the request, if the land use is allowable as an outright permitted use,” or “[f]inal local permit approval, if the land use is allowable as a conditional use.” ORS 475C.053(2). It is that timing difference—within 21 days of the receipt of the request or after the final local permit approval—that forms the underlying dispute.

In this case, the property at issue is in an exclusive farm use (EFU) zone in the jurisdiction of Multnomah County. Chapter 39 of the Multnomah County Code (MCC) is the Zoning Code of Multnomah County. MCC 39.1000. In that chapter, a “permitted use” is defined as “[a] use permitted in a base zone without the need for special administrative review and approval, upon satisfaction of the standards and requirements of this Chapter.” MCC 39.2000 (defining “Permitted Use”). The MCC further provides that “Farm use, as defined in ORS 215.203” is an “allowed use” in an EFU zone “subject to all applicable supplementary regulations contained in MCC Chapter 39.” MCC 39.4220(A). Under state law, marijuana is “[a] crop for the purposes of ‘farm use’ as defined in ORS 215.230” and “[a] crop for

“(3) A city or county that receives a request for a land use compatibility statement under this section is not required to act on that request during the period that the commission discontinues licensing those premises pursuant to ORS 475C.950(4)(b).

“(4) A city or county action concerning a land use compatibility statement under this section is not a land use decision for purposes of ORS chapter 195, 196, 197, 197A, 215 or 227.”

94 State ex rel Elitextrx, LLC v. Siegel

purposes of a ‘farm’ and ‘farming practice,’ both as defined in ORS 30.930.” ORS 475C.489(1)(a), (b).

Under ORS 475C.449(2), a city or county can adopt “reasonable regulations” on the operation of marijuana businesses, including marijuana production.2 Under that authority, the county has adopted regulations as part of its zoning code that apply to marijuana businesses. That section, MCC 39.8500 is included in the zoning code under Part 8.D., which is titled “Special Permits and Applications.” MCC 39.8500(D) provides, in part:

“A proposal for establishing, altering, expanding or replacing a Marijuana Business will be reviewed as specified in Table A below and is subject to the specified criteria therein as well as the criteria set forth in paragraph E of this section. * * * Where no review process for a particular Marijuana Business in a particular base zone is specified in Table A, the Marijuana Business may not operate in that base zone.”

Where the proposed use is for outdoor marijuana production in an EFU zone, the proposal must comply with MCC 39.4220(A) (allowing “farm use”, subject to all applicable supplemental regulations in MCC chapter 39), and MCC 39.8500(E), which includes additional requirements related to siting relative to schools; setbacks for buildings and structures ; limitations and required equipment related to noise, light, and barriers; and limiting a lot of record to only one of each of the listed types of marijuana businesses.

With that legal background in mind, we briefly relate the undisputed factual and procedural history of this case. Plaintiff, who owns and operates a licensed recreational marijuana production facility in Portland, planned to relocate its facility to property located within the planning jurisdiction of Multnomah County on property zoned EFU. In September 2021, plaintiff submitted an application to the county for a LUCS, as required by ORS 475C.053.

2 As relevant to marijuana production, “reasonable regulations” include, “[r]

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