Border weed: How the hometown of tater tots became a cannabis capital

Ontario, Ore., has nine dispensaries for 11,000 residents. But most of their customers are coming from Idaho.

4/18/2021 7:01:00 PM

Ontario, Ore., is just one of dozens of border communities around the country that have been transformed into marijuana boom towns thanks to the country’s patchwork quilt of cannabis laws

Ontario, Ore., has nine dispensaries for 11,000 residents. But most of their customers are coming from Idaho.

By04/18/2021 07:00 AM EDTLink CopiedONTARIO, Ore. — When Brandon St. Germain got in line to apply for a marijuana dispensary license inthis town of 11,000 people along the Idaho border in November 2018,he brought armed guards.“We're talking ex-military veterans,” St. Germain said. “They're standing there with M-16s. They’ve got bulletproof vests on; they’ve got pistols on their hip.”

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Hehad his reasons for the extraordinary security precautions: No one quite knew how many pot shops could ultimately be permitted, making his spot worth millions of dollars in potential sales.That’s because this small agricultural town — best known for Ore-lda’s creation of the tater tot in the 1950s

—is justa 50-minute drive from Boise, Idaho. It sits at the edge of the Treasure Valley, where more than 700,000 people — 40 percent of Idaho’s population — reside.Marijuana remains illegal in Idaho. In fact, it is one of only two states left in the nation that bans all forms of cannabis, including hemp and CBD products. But drive across the border into Oregon, and Idahoans can purchase every conceivable type of cannabis product, from THC infused artisan grape taffy to 1.5 gram pre-rolled joints.

In the year and a half since Ontario began allowing weed sales, nine dispensaries have opened. It’s estimated that the city will generate $120 to $130 million in annual sales when the cannabis industry is fully up and running — that’s more than 10 percent of Oregon’s sales in 2020.

A young man rides his bicycle through a neighborhood in Ontario, Ore. Ontario is a small agricultural town of about 11,000 people. It is the largest town in Malheur County, one of the most rural and conservative counties in the state of Oregon. | Natalie Fertig/POLITICO

“We're talking millions of dollars in revenue to stand in this spot in line,” said St. Germain, who, like many other applicants, camped out overnight to file his paperwork.It paid off. Once the city opened up the licensing process, the company St. Germain worked for — Spokane, Wash.-based chain Cannabis & Glass — got a license. And St. Germain himself got a new job out of the experience: Jeremy Archie, co-owner of Treasure Valley Cannabis Company, poached him while they stood in line together.

Ontario City Manager Adam Brown estimates that Idahoans make 1,600 “unique trips” across the border each day to shop in the town’s dispensaries and tax-free big box stores like Home Depot — that’s a total of 11,200 trips each week, with the highest traffic

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on weekends.Ontario is just one of dozens of border communities around the country that have been transformed into marijuana boom towns thanks to the country’s patchwork quilt of cannabis laws. Eighteen states now embrace full legalization, and all of them but California and Alaska share a border with at least one state where cannabis is illegal. Spokane, Wash., Sauget, Ill., Trinidad, Colo., and Great Barrington, Mass., are just a few towns where marijuana entrepreneurs have found fertile ground in these border regions between

legal and non-legal states.Big traffic, small townGet off Interstate 84 and head easton a weekend, and you will immediately get tied up in a snarl of cars bearing into a large shopping center with a Home Depot, a Walmart, a smattering of fast food restaurants — and four cannabis dispensaries. Most license plates are from Idaho, and many locals avoid the area on the weekend.

“Our nice quiet town has become complete chaos,” said Rachel Quaid, 39, a lifelong Ontario resident who dislikes the huge increase in traffic that cannabis legalization has brought to her town. “[Idaho] needs to legalize it. That way people will stay in their state.”

Ontario is the only city in Malheur County that allows weed sales. The county of about 32,000 residents had $92 million in cannabis sales in 2020,according to Portland Business Journal. By contrast, 48,000-resident Lincoln County, a popular tourist area for legal weed, generated about $21 million. Ontario’s nine dispensaries sold an eye-popping $2,857 of cannabis per county resident in 2020. In Multnomah County — the state’s most populous county, which encompasses much of Portland, a

marijuana powerhouse — the cannabis industry sold only $378 per resident last year.Clockwise from top: A pipe shop in the old town of Ontario, Ore., displays flags with marijuana leaves, automatic rifles and the anarchist symbol. Hotbox Farms dispensary sits on the edge of a sprawling shopping complex just off Interstate-84. Cannabis & Glass’ green facade and giant marijuana leaf are visible from the highway. | Natalie Fertig/POLITICO

That’s led to a significant financial windfall for the city. In 2020, Ontario took in $1.5 million in tax revenue from weed, and is expecting close to $3 million in 2021 — about 9 percent of the city’s $35 million annual budget. And a lot of that additional tax revenue is coming from Idahoans.

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People are willing to travel far for legal cannabis, even if illicit products are available in their hometown. Michelle drives four hours from southeastern Idaho every few months to visit Hotbox in Ontario. She said it’s worth the trip for the peace of mind.

“The problem is, you don't know what you're getting [in the illicit market],” said 46-year-old Michelle — who asked that her last name be left out because she planned to take products back across the border into Idaho. There’s less risk in consuming the Oregon products, she added, because you know “it didn't get transported in a gas tank.”

On a recent Friday night, 11 of the 15 cars in the Treasure Valley Cannabis Company parking lot were from Idaho. At 2 p.m. on Saturday, the Hotbox parking lot had 20 cars, 17 with Idaho plates.Strained state budgets fuel legalization waveThe fear of losing out on tax revenues to neighboring states is motivating legislatures around the country to consider cannabis legalization.

In the last five months, Arizona, South Dakota, Montana, Virginia, New Mexico, New York and New Jersey have all legalized marijuana. Those new laws have created more than 20 regions potentially rich with border-crossing cannabis business.Pennsylvanians will likely soon be popping into Camden, N.J., to partake in the Garden State’s newest crop, as will shoppers from Maryland and Delaware — all depositing tax dollars into New Jersey’s coffers.

On the other endof the state, the race is now on to see how Hoboken and Manhattan compete — at least for a little while — on cannabis-driven PATH traffic as they stand up their marijuana industries.An Idaho resident browses strains of cannabis flower at Hotbox Farms. On a recent Saturday, the vast majority of cars in Hotbox’s parking lot were from Idaho. | Natalie Fertig/POLITICO

“Colorado to our north [and] Arizona to the west has already done it,” New Mexico Senate President Pro Tempore Mimi Stewart said of legalization in January, just three months before her own state followed through with passing legalization. “If we don't do it pretty soon, then Texas will do it too, and we will have less revenue.”

When Virginia greenlit marijuana earlier this month, it reignited the debate inNorth Carolina, where lawmakers introduced a long-shot legalization bill last week. “I fully expect that our citizens in border counties will cross over to Virginia to purchase marijuana for medical and recreational purposes, and that means lost tax revenues,” said North Carolina state Sen. Jay Chaudhuri (D), the lead sponsor of the bill. “Virginia farmers will have a leg up on North Carolina farmers.”

Lawmakers are not the only ones with an eye on border markets. Cannabis companies also see big opportunities.Jushi Holdings, which has operations in seven states, has opened two shops in southern Illinois, just across from St. Louis, Mo. Erich Mauff, the company’s co-president, points out that even when two bordering states both have legal cannabis, differences in regulation — a lower tax rate or a higher potency limit for edibles, for example — can still

lure shoppersinto going the extra mile.“Where you have a dissymmetry of regulatory policy, be it [medical] versus adult use or be it [the sales] tax rate, one [state] will benefit more than the other,” said Mauff. “I don't think it's uncommon in business, period, to have this type of location.”

Destination OntarioWhile the marijuana boom madeOntario flush with cash, the town initially rebuffed the drug when Oregon legalized it in 2015. In fact, until 2016, Malheur and nearby Baker County had no legal dispensaries. Every town in the conservative county — which former President Donald Trump won with 70 percent of the vote in 2020, and made

national headlines in 2016 when— had opted out of the business.A 2016 initiative to allow sales failed in Ontario, but Huntington — Read more: POLITICO »

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This paints a pretty idealistic & rosy portrait of “historic Ontario.” I grew up in Ontario, and while I no longer call it home, it has been a shit hole for well over a decade now. I don’t think weed made it any worse. . 'Therein lies the piece of God I always knew I was a prophet, but I couldn't find a decent job' -Jay-Z : 'Drug Dealers Anonymous'

FYI the wildlife refuge takeover was in a different county 150 miles from Ontario. All laws were written for the user but not for those that will suffer the consequences of being an unwilling participant. ignores the violence in Portland. had a double mind when i wanted to invest but i thank God 🙏 i have invested with the right account manager kellybrian_ i got my money back with profit just as he said, i want everyone to start investing with kellybrian_ he's the best trader.