Burns Notice

The two discussed how to ensure that Oregon's emerging plans to sell recreational marijuana succeed. To do that, the state has to squash the black market in pot and steer purchases through vendors with the Oregon Liquor Control Commission's stamp of approval.

OLCC chairman Patridge and Johnson, who led the successful Measure 91 campaign to legalize weed last fall, discussed a plan to give the commission control of nearly all legal weed sales in the state—including those under the state's existing medical marijuana system.

The problem is, voters were told Measure 91 would leave the state's medical marijuana sales alone. The ideas Patridge and Johnson discussed would go far beyond the scope of the ballot measure voters approved in November.

Last week, a top official at the agency lost his job when he leaked a memo describing this plan to a lawyer representing the medical marijuana industry. The firing of Tom Burns made news all over Oregon, but the meaning of the secrets he revealed are only now becoming clear.

"When Measure 91 passed, one of the things its proponents were most proud of is, it left medical marijuana alone," says Matt Goldberg, a Lake Oswego lawyer advising pot businesses. But the plan that was leaked, he says, would mean "a total overhaul."

Before his firing, Burns was the adviser hired to help the OLCC craft rules that would govern how pot would be sold from retail outlets. He'd been hired in December with headlines calling him Oregon's "pot czar."

On March 23, OLCC executive director Steve Marks sent Burns an undated memo written by Measure 91's backers. In the memo, eventually intended for lawmakers, the backers say they support the OLCC's takeover of medical marijuana sales, now run by the Oregon Health Authority. 

Burns was supposed to have added his own comments to the memo. Instead, he sent a copy to Amy Margolis, a Portland lawyer advocating for some of the state's biggest marijuana growers. Margolis in turn circulated the memo, blowing up the talks.

OLCC spokesman Tom Towslee says Burns lied to agency officials about leaking the memo. On March 26, Marks fired Burns from his $101,952-a-year job. Burns has not responded to requests from WW for comment.

That much has already been reported by the Oregon news media. 

But the memo in itself wasn't confidential; had someone asked for it under the state's public records law (as WW and other media outlets eventually did), the agency would have been compelled to release it.

Instead, the memo embarrassed the OLCC by showing the agency was taking sides in the highly competitive and lucrative pot-growing industry. 

The agency has been accused of doing the same thing in its regulation of wine and beer distribution in the state ("Booze Wars," WW, Jan. 11, 2012).

The difference here is that the emerging marijuana industry stands to make a handful of people very rich very quickly—and the commission's efforts could be seen as unfairly tipping the scales.

"The stakes are high," says Rep. Ann Lininger (D-Lake Oswego), co-chairwoman of the House-Senate committee on marijuana. "There are rural farmers whose livelihoods are at stake, and there's a lot of money at stake."

It's been apparent for months that the OLCC had singled out medical marijuana growers as the biggest threat to legal sales of recreational pot. That's because medical growers in Southern Oregon are widely believed to be feeding the black market for marijuana. The more dope they supply, the lower the black market's costs, keeping illegal dealers' prices competitive with state-licensed stores'.

The commission wants to choke off supply to the black market, and the proposal Patridge discussed would have forced more growers to deal with his agency as it tries to corral the supply of weed.

In public, the OLCC has been holding town hall meetings across the state, with Patridge taking a highly visible role as moderator, asking citizens if they want more regulation of medical weed (which voters approved in 1998).

But Patridge's secret talks showed the OLCC was already talking about how to take over the medical marijuana system and put larger growers under its thumb.

Patridge says he and Measure 91's backers were still beginning talks when Burns leaked the memo. "It was a good framework to kick off a discussion," he says. "They were out talking to their people and trying to get everybody on board."

Marks says he and Patridge were looking for a way to stem the flow of weed from medical growers to the black market.

"It's not about a takeover," Marks says. "It's about diminishing the black market. We're very clear that our job is to implement Measure 91. If there's a consensus to do more, we're happy to provide that service."

Johnson says he never agreed to a deal when he met with Patridge.

"I wasn't formally considering any concessions or policy decisions, and nobody made any policy decisions," Johnson says. "I was mostly just listening to what he had to say."

With the leak of the plans, Marks says the OLCC is now floating ideas for increased agency regulation of medical pot to legislators. The agency must still figure out how to bring as many growers and sellers of dope into the state-run system as possible—whether by creating incentives or threatening sanctions.

Observers say the fact that Patridge and Johnson were even talking about an endgame strategy means medical weed won't stay a separate system for long.

“This is a radical revision to medical marijuana,” says Goldberg. “It basically gives up the ghost.” 

WWeek 2015