Water rights are an important issue for anyone considering a purchase or lease of property for a licensed marijuana grow in Oregon. Not only does the OLCC require proof of a property’s water right or an alternative, but the right to water can be the difference between success and failure as marijuana grower. We recently sat down with Bob Long, CwM-H2O’s Principal Consultant to discuss the OLCC water rights.
What is water right? In Oregon, all water belongs to the public, but may be appropriated for a property owner’s beneficial use. Oregon follows the prior-appropriations doctrine, which follows a doctrine of first in time, first in right. This means that the first property owner to apply for a water right receives a priority over those who apply later. This permit system dates to 1909 and once received the water right will automatically transfer along with the property when it’s sold.
The “golden ticket” as described by Bob Long, a certified water rights appraiser and licensed geologist in Oregon, is the certificated water right. Other evidence of water rights can be through a decree or permit, but having that certificate of water rights is preferable. However, even with the certificate, it’s important to perform due diligence on the past use of the water right. Neighbors unhappy with the prospect of a marijuana business next door could successfully move to cancel the water right if they can show non-use of the water right by the seller or landlord for a period of time.
While trucking in water is always an option if the property does not have a sufficient water right for the proposed marijuana grow operation, it may be worth investigating the possibility of purchasing a water right from an adjacent property. In Oregon, a water right can be transferred, so the smart buyer will consider this possibility.
Performing comprehensive due diligence on a property’s water right is critical before buying or leasing property in Oregon for a marijuana grow. The OLCC requires proof of either a water right or how the applicant plans to water its marijuana crop. With the ever-increasing competition in Oregon’s fledging marijuana industry, reducing overhead on costs such as water is going to crucial.
For more information on Oregon water rights, check out the website of the Oregon agency in charge – Oregon Water Resources Department
If you have any other questions on Oregon’s water rights, you can always reach out to us here at Green Light Law Group.