A6 THE ASTORIAN • SATURDAY, APRIL 3, 2021 Station: Appraisal should be fi nished in April Continued from Page A1 Rezoning, an urban growth boundary, annexation and other legal issues could complicate the process. “That isn’t to say it isn’t going to be the location, but it is a complicated path to get there,” Watts said. Gearhart’s fi re station, constructed in 1958, is con- sidered at risk for fl ooding or collapse during an earth- quake and tsunami. In 2018, after considering nine locations, a fi re station committee recommended three concepts and loca- tions to help guide the deci- sion-making process. More than 50% supported the High Point site, with an elevation between 62 feet and 65 feet, as their No. 1 choice, fol- lowed by 38.4% who pre- ferred the fi re department’s location on Pacifi c Way. The Gearhart Park site was elimi- nated from consideration. A new survey should indicate if there is enough R.J. Marx/The Astorian The fi re station in Gearhart off of Pacifi c Way. support to put a bond vote before the public in Novem- ber, Sweet said . The two-story High Point station would cover a 11,000- to 13,000-square-foot space. According to draft plans, the ground fl oor would include fi ve bays, lockers, turnout washes, emergency medical service area, com- pressors and bathroom. The fi re department side would include the chief’s and other offi ces, workroom, kitchen and training area. Cubicles for police and storage are also indicated in the draft plans. The second fl oor, above the bays, includes a small living area, potential dorms for an intern program, and a full men’s and women’s shower system. Site preparation adds just under $3.1 million to the cost to make sure the building is up to standards, with piers or columns to mitigate lique- faction concerns, Sweet said. The cost would be sim- ilar or less to costs for geo- technical work at any of the locations, according to the report. Construction costs, deliv- ered by ACC Construction in Tigard, are estimated at about $3.9 million. Earth- work, exterior improve- ments and utilities come to $1.9 million. Building costs are estimated at $5.2 million. Other direct construction costs bring the total building cost to $8.6 million. Furnishings and equip- ment, architect and engineer design fees are estimated at $1.6 million. While the sales price for the High Point property is “not solid,” land acquisition is estimated about $3 mil- lion, Sweet said. The fi nal purchase contract has yet to be signed. A full appraisal of the property has been ordered and should be fi n- ished in April. The bond’s levy rate is estimated at $1.02 per $1,000 of assessed value, Sweet said. A $300,000 home would see an increase of $306 per year; a $1 mil- lion home would pay an additional $1,200 for the bond. Marijuana: ‘It’s an onerous tax burden’ Continued from Page A1 BY THE NUMBERS Another proposal authored by Rep. Lily Morgan, R-Grants Pass, would create an inter- nal wholesale tax on any marijuana transported across county lines. The temptation to back- fi ll shrinking local budgets with cannabis dollars is wor- risome, according to industry boosters. “If you look at it holisti- cally,” cannabis economist Beau Whitney said, “I think the Oregon market is under duress.” $1,109,959,000 Tax fi ght The new tax fi ght is largely in response to Measure 110, the voter-approved initia- tive from last year that reallo- cates a large share of pot rev- enue away from schools, state troopers and local govern- ments in order to fund drug treatment services. In the next two-year bud- get cycle, which begins in July , cities and counties will have only $18 million in mar- ijuana money to split amongst themselves, an almost 72% drop compared with the $63.7 million they expected under the old funding formula, according to the League of Oregon Cities. City h alls eager to bump up their cannabis tax include Gresham, Hillsboro, Bea- verton, Tualatin, Sherwood, St. Helens, Happy Valley, Eugene and Bend, staff for the league said in testimony to a revenue committee hear- ing of the Legislature in early March . League of Oregon Cit- ies lobbyist Mark Gharst told lawmakers the COVID-19 pandemic prompted a decline in lodging and gas taxes, park and development fees — and the worst crunch for city bud- gets may be yet to come, if property tax revenues fall due to commercial vacancies. “I don’t think that the vot- ers were saying that they wanted local governments to cut services in order to fund that recovery,” Gharst said. “We can have our cake and eat it, too.” Marijuana insiders see it diff erently. They say cannabis retailers can’t just pass the tax increase on to users, many of whom could dial up their old dealer from the years before legalization. Whitney, the economist, estimates that most consum- ers will pay a premium of just 10% to 15% to acquire their marijuana legally. Go above that, and they might just get their products on the black market. “Consumers are very price conscious,” agreed Casey Houlihan, the executive direc- tor of the Oregon Retailers of Cannabis Association. He calls the proposed 10% tax a “disaster” in the making, say- ing the lure of the illicit mar- ket could lead governments to collect less in the future than they do now. “One only needs to look around on Instagram to see cheap ounces or pounds being sold,” Houlihan said. the dollar amount of marijuana sales in Oregon in 2020 17,981 the number of Oregon jobs in the cannabis industry 687 the number of cannabis jobs added in 2020 7.66 MILLION the number of ‘wet pounds’ of cannabis harvested in Oregon in 2020 $112,000 the mean monthly sales fi gure for recreational dispensaries in February 2020 $168,500 the mean monthly sales per retailer in July 2020 as Oregonians adjusted to life in quarantine 1,182 the number of licensed cannabis growers in Oregon at the end of 2020 100 the number of pending cannabis production licenses the Oregon Liquor Control Commission expects to approve in early 2021, given a historical 78.8% approval rate 11% the percent increase in square footage of cannabis under pro- duction, if those licensees are approved Stata data confi rms that customers haven’t noticed much diff erence at the cash register so far. Despite the billion-dollar consumer market in 2020, the average retail price for con- sumers has remained at or below $5.50 per gram nearly every month since July 2018, the Oregon Liquor Control Commission said in its Feb. 1 supply-and-demand report. The price of wholesale fl ower, the smokeable part of the cannabis plant, hit $1,499 per pound in December 2020, levels not seen since late 2017. That’s good news for growers, who for years have complained that Oregon’s cannabis market is oversup- plied. Demand is now devour- ing 65% of annual supply, up from just 50% two years ago, per the report. That happened because purchasing outpaces crops; overall production leapt 78%, while the amount of cannabis sold rose 150%. The sea of upward arrows likely explains the new push to raise marijuana taxes, though the Oregon Liquor Control Commission predicts there’s no way the market can sustain the 38% annual growth rate seen during the outbreak. “If not for COVID, growth in demand in 2020 would have almost certainly been fl atter,” the commission con- cluded in its report to law- makers. “If consumers return to the patterns of consumption they exhibited pre-COVID, demand will almost certainly decline or fl atten in 2021.” Whitney also predicts the growth rate will slow, though he thinks the odds of sustain- ing a billion-dollar industry in the years ahead are fairly high, given that the market would have expanded by at least 10% during a normal year. The economist wants to dispel the notion that the bump in sales can be traced to slackers or out-of-work millennials from the service industry. Instead, his money is on the white-collar types earning more than $50,000 while logging onto work in their pajamas . “Once people got used to ‘working from stoned,’” he said , “they just kept doing it.” Plenty of problems Regardless of how the tax increase proposal shakes out, the Oregon recreational mari- juana industry is facing a pas- sel of other hurdles. Lundin, the trade group director, said several dispen- saries burned to the ground in Medford and Talent during the 2020 wildfi res. Other farmers also lost crops. And as Willamette Week recently reported, more than 100 dis- pensaries in Portland have been robbed or burglarized since March 2020, likely because pot shops largely deal in cash. Those charged in the crime spree are predomi- nantly teenagers. “Historically, (the police) have not demonstrated the willingness we would like to see at taking these types of crimes seriously,” Houlihan said. Another longtime thorn in the side of legal cannabis business owners is the section of the federal tax code, known as 280e, that essentially pro- hibits pot enterprises from deducting any expenses from their gross earnings. “It’s an onerous tax bur- den,” said Jeff Yapp, the CEO of Golden Leaf Holdings. “You can’t deduct any of your business operating expenses that every other business enjoys.” Listed on the Canadian Stock Exchange but based in Portland, the vertical integra- tion of Golden Leaf stretches from a grow facility near Bald Peak to a string of Chal- ice Farms dispensaries in Portland. Flower and pre-roll sales make up more than 50% of their sales, but Yapp said the company saw edibles — food products that contain canna- bis — fl ying off the shelves during the pandemic, as new- bies sought an unimposing way to get high. Yapp said he believes the lack of nightlife and travel in 2020 triggered the booming sales, and sees potential in the three-quar- ters of the populace who may sooner smoke weed than try pharmaceutical products. “You look at the scale of opportunity in plant-based medicine — that’s 75% of the marketplace — who all suff er the same issues: ‘I can’t sleep, I’m in pain, I’ve got anxi- ety,’” he said. “As they con- tinue to be open to the alterna- tives, I think that’s a massive opportunity.” Oregon’s best hope for reforming the federal tax code — or achieving the larger goal of removing marijuana from the same classifi cation as her- oin — may lie with U.S. Rep. Earl Blumenauer. The Democrat from Port- land helped shepherd passage of the MORE Act — the Mar- ijuana Opportunity Reinvest- ment and Expungement Act of 2019 — through the House in December, which would have decriminalized mari- juana at the federal level, but the bill stopped in its tracks when it hit the Senate, which then was controlled by the GOP. That proposal, as well as the SAFE Banking Act, could be reinvigorated under the Biden administration, though Blumenauer admits the new president has sent some mixed signals so far. Other observers note that any reduction in IRS revenue likely would need to be paired with a federal can- nabis tax to pass muster. “There’s a lot of compe- tition just to get this on the fl oor of the House, but I think we’re in the strongest position that we’ve ever been in,” Blu- menauer said. “It’s basically Congress that needs to do its job and I think Congress can and will do it.” The Oregon Capital Bureau is a collaboration between EO Media Group and Pamplin Media Group. County reports two new virus cases The Astorian Clatsop County on Thursday reported two new coronavirus cases. The cases involve a man in his 30s living in the northern part of the county. A female under 10 also tested positive for the virus. Both were recovering at home. The county has recorded 840 cases since the start of the pandemic. According to the county, 19 were hospitalized and seven have died. Motels: Republicans split on the legislation Continued from Page A1 State Rep. Pam Marsh, D-Ashland, said some proj- ects have proceeded, but others have stalled despite community support. “The need to pur- sue zoning changes often stands in the way of great projects,” Marsh, the bill’s sponsor, said. “That is a problem when we are expe- riencing a crisis in home- lessness and low-income housing. “It will allow us to repur- pose hotels and motels that have served tourists and will become facilities that will house the most vulner- able among us. As a build- ing intended to take care of people, it should not mat- ter whose head rests on that pillow.” Marsh represents a dis- trict that lost 2,500 homes from the Almeda fi re, which swept north from Ashland through Talent and Phoe- nix. It was one of the Labor Day wildfi res across Ore- gon. Many of the displaced residents were low-income families who were left with few aff ordable alternatives for housing. in other areas. The board rejected the latter amount , but reversed itself and approved it in November . Drazan acknowledged the pressing need for pro- viding shelter for people who have lost their homes for whatever reason. But she objected to the prospec- tive purchase of the Red Fox Motel in Estacada as a shelter, saying it was better suited long-term for tour- ism. Clackamas County commissioners voted 3-2 in January to suspend fur- ther consideration of the purchase. Drazan also said law- makers were creating an exception to Oregon’s land use laws, instead of easing restrictions to allow con- struction of more housing. “Instead of fi xing our land use system and the things that are broken, we are giving a pass, we are doing a carve-out,” she said. “We are creating a back way because it’s not working.” Republicans split on the bill, eight voting for it and 12 against it; the other three were excused. All Demo- crats present voted for it. HOUSING IS DEFINED AS ‘AFFORDABLE’ IF QUALIFYING RESIDENTS EARN LESS THAN 60% OF THE AREA MEDIAN INCOME. The bill applies to build- ings within urban growth boundaries, and outside areas zoned for heavy industrial use. They must have access to transporta- tion, and be outside fl ood plains or other designated hazard areas. Local governments can still apply other restric- tions, such as building codes, occupancy lim- its and reasonable site and design standards. Housing is defi ned as “aff ordable” if qualify- ing residents earn less than 60% of the area median income. “Some of these facil- ities will remain shel- ters or transitional hous- ing. But in other cases, the long-term use most needed by a community will be low-income hous- ing,” Marsh said. “Hotels and motels that may not fi t the bill for today’s trav- elers are the perfect place to provide people in crisis with stability and the sup- port they need in order to move toward permanent housing.” House Republican Leader Christine Drazan, of Canby, spoke against the bill. As a member of the Legislature’s Emergency Board, she voted in Octo- ber for $30 million for Project Turnkey in wild- fi re-aff ected areas and $35 million for Project Turnkey Rep. Jack Zika, R-Red- mond, said the bill would ease the way for the pro- posed purchase of a hotel for housing in his district. The bill, slightly more than a page long, was read aloud by a clerk because minority Republicans have declined to waive the con- stitutional requirement for bills to be read in their entirety prior to a fi nal vote. Dozens of bills await action on the House agenda. But this bill jumped to the top of the agenda because a substitute version had been proposed by Rep. Lily Morgan, R-Grants Pass, who then decided against advancing it. Marsh said a private investor has purchased three hotels or motels within Medford for con- version to housing. Though House Bill 3261 would not apply to these projects, she said, “it validates this model.” “At a time when our community has lost 2,500 homes to wildfi re, it may be the actions of this pri- vate entity that actually save our bacon,” Marsh added. “It is doing the one signifi cant, tangible eff ort to create new housing very quickly in a community that has been devastated.” The Oregon Capi- tal Bureau is a collabo- ration between EO Media Group and Pamplin Media Group. facebook.com/dailyastorian WANTED Alder and Maple Saw Logs & Standing Timber Northwest Hardwoods • Longview, WA Contact: John Anderson • 360-269-2500