Two months since Oregon started officially regulating its medical marijuana industry the state is learning how tough a job that will be.
FOX 12 investigators uncovered that even with new laws in place some dispensaries are slipping through the cracks.
A new law that went into effect this March requires all medical marijuana dispensaries to abide by a specific set of rules and regulations in order to get a license. That license is the key to doing business legally, according to the Oregon Health Authority.
"I'm just excited to be operating legally in the state of Oregon," said Oregon's Finest Co-Owner Tyson Hayworth.
Stamped with a gold seal of approval, and encased in a glass frame is the business license of Oregon's Finest. The license sits right in the entry way of the dispensary.
"It feels good to be doing this the right way," said Hayworth.
The tiny piece of paper is an enormous accomplishment for the dispensary, and one that didn't come easy.
"I feel like we are still working day in and day out to keep everything up to date, and testing to make sure we meet the requirements," said Hayworth.
Hundreds of dispensaries have applied for a state-approved license. Some applications are still waiting for approval, others were denied right away, according to the state.
Without a license, the state says dispensaries aren't allowed to be open and operators could face fines or even criminal charges if they don't listen.
"We are going to start looking for these types of places," said Tom Burns with the Oregon Health Authority.
The Oregon Health Authority is in charge of cracking down on dispensaries. But, with limited investigators on the street, the agency says right now they are operating off of tips from the public.
"When I hear that one is operating illegally, I think it's the perfect opportunity to see what they're doing," Burns said.
One of those tips led the OHA's Burns to Nectar in Northwest Portland. He says the tipster claimed the dispensary was still selling pot to patients in March and April, even though Nectar hadn't been issued a license.
The OHA sent a letter in late March saying it planned to deny Nectar's license application because the dispensary was too close to a Montessori school, and its layout did not meet security requirements.
"These people have been operating outside of the law for some time," said Burns.
But, FOX 12 investigators saw Nectar was still open for business back in April. When we confronted employees about selling marijuana to patients but they claimed they were not.
"We are not selling any marijuana. It's as simple as I can put it for you," said one employee to FOX 12's Kaitlyn Bolduc.
Despite what employees told FOX 12, at least 10 people confirmed they bought marijuana from the dispensary. Some even showed it to us.
"We got this oil pen, this other medicine, some jelly, it's gonna be really great," said customer TJ Haines.
A day after FOX 12 visited the dispensary, Nectar closed down after employees spoke to the business' attorney. Nectar's lawyer tells us the dispensary's owners think their license application should be granted and they plan to fight for that outcome.
"People need to understand that it's the law of the land," said Burns.
Burns says his dealings with Nectar just prove what a difficult job the state has trying to regulate an industry that has flourished in ambiguity. But that won't stop him from taking on other dispensaries as the tips keep coming in.
The state says it will continue to monitor activity at Nectar.
Oregon's Department of Justice has now told the dispensary's owners that they could face civil fines of $500 for each day the dispensary operates without a license.
The DOJ's letter also warned for the dispensary to aware that without a registration from the state, they are not exempted from criminal laws related to the possession, delivery, or production of marijuana.
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