ORS 475C Cannabis Rules: Possession, Home Grows & Excise Tax

Oregon Revised Statutes Chapter 475C is the single body of law that governs cannabis in Oregon, from how much you can carry to who can grow, process, and sell it. The chapter combined Oregon’s recreational and medical cannabis rules into one framework run by the Oregon Liquor and Cannabis Commission (OLCC). If you buy, grow, carry, or sell cannabis in Oregon, your conduct is measured against this chapter. Several of its limits have shifted since legalization first passed, and a few of its hardest edges are penalties people don’t see coming.

How Much Cannabis You Can Possess

Adults 21 and older can legally possess cannabis in Oregon, but the amount depends on where you are and what form the product takes.

In a public place, the ceiling is two ounces of usable marijuana (dried flower). Possessing more than that in public is unlawful under ORS 475C.337.¹ Oregon’s original legalization measure capped public possession at one ounce; the statute has since been amended upward.

At home, the limits are higher and vary by product form:

Usable marijuana: up to eight ounces
Solid cannabinoid products such as edibles and topicals: up to 16 ounces
Liquid cannabinoid products: up to 72 ounces
Cannabinoid concentrates: up to 16 ounces
Cannabinoid extracts: up to one ounce, and only if purchased from a licensed retailer

These household amounts apply per household, not per person, so adults living together share one cap.² The extract rule is the one that catches people off guard: any extract that didn’t come from a licensed retailer is separately unlawful, regardless of the amount.¹

Growing Cannabis at Home

A household can grow up to four cannabis plants. The cap applies to the household, not to each resident, so a house with three adults still gets four plants total.²

Under ORS 475C.309, homegrown plants, homemade cannabinoid products, and concentrates cannot be visible by normal unaided vision from a public place. A violation is a Class B violation.³ Plants in a front yard or on an open balcony facing the sidewalk are out. Indoor grows and fenced backyard gardens that can’t be seen from the street are fine.

Giving Cannabis to Another Adult

You can hand cannabis to another adult 21 or older as long as no money changes hands. The free-transfer allowance is up to one ounce of usable marijuana, 16 ounces of solid cannabinoid products, 72 ounces of liquid cannabinoid products, or 16 ounces of concentrates per delivery.² Taking payment flips the transfer into unlicensed sale territory.

Penalties for Going Over the Limits

ORS 475C.337 uses a graduated structure that scales with how far past the limit you go. Each tier corresponds to a multiple of the applicable possession cap:

Up to double the limit: Class B violation (comparable to a traffic infraction)
Two to four times the limit: Class B misdemeanor
Excess beyond four times the limit: Class A misdemeanor
Sixteen times the limit or more: Class C felony
Thirty-two times the limit or more: Class B felony

Two standalone felony triggers sit on top of that math. Carrying more than eight pounds of usable marijuana in public is a Class C felony on its own. So is possessing more than a quarter-ounce of extract that wasn’t purchased from a licensed retailer.¹

Other Conduct That Stays Illegal

Legalization did not erase every cannabis offense. A few categories of conduct remain prohibited under Chapter 475C regardless of your age or possession amount.

Public Consumption

Using any cannabis product in a public place is unlawful under ORS 475C.377. That covers smoking, vaping, and eating edibles on sidewalks, in parks, at concerts, and anywhere else the public has access. A violation is a Class B violation.³

Delivery to Anyone Under 21

Giving or selling cannabis to a person under 21 is a Class C felony under ORS 475C.345. One narrow exception exists: a person under 24 who gives no more than one ounce of usable marijuana, for free, to someone at least 16 isn’t subject to the felony classification.³ Outside that scenario, the penalty is heavy.

Crossing State Lines

ORS 475C.229 prohibits importing cannabis into Oregon or exporting it out of the state.³ It doesn’t matter whether the destination state has legalized cannabis. Moving product across any state line also triggers federal trafficking law, which carries its own separate penalties.

Unlicensed Commercial Activity

Producing, processing, or selling cannabis without the right OLCC license is a crime, and sentencing jumps when the offense qualifies as a “commercial marijuana offense” under ORS 475C.353. A felony qualifies as commercial when at least three aggravating factors are present, including delivery for payment, possession of $300 or more in cash, carrying a weapon, or possessing packaging materials like scales and wrapping.³

Commercial License Categories

Chapter 475C creates four primary license types, each restricted to one segment of the supply chain:

Producer under ORS 475C.065 covers planting, cultivating, growing, and harvesting. These are the farms.
Processor under ORS 475C.085 covers converting raw plant material into finished goods such as edibles, oils, topicals, and concentrates.
Wholesaler under ORS 475C.093 covers buying cannabis items from producers or processors and reselling them to retailers.
Retailer under ORS 475C.097 covers direct sales to consumers, with a duty to verify every customer is 21 or older and keep sales within legal purchase limits.

Each license is confined to its defined activity.³ A producer can’t sell to consumers and a retailer can’t grow its own supply without holding the additional license. The OLCC can also designate certain licensees as exclusively medical under ORS 475C.121, which attaches a separate set of requirements tied to the medical program.

All licensed product must pass laboratory testing before it reaches a shelf. Labels must accurately indicate the contents, and ORS 475C.233 lets the OLCC pull any brand it determines is deceptively labeled or contains adulterated ingredients.⁴ Packaging must be child-resistant.

The 17% Excise Tax

Oregon imposes a 17% excise tax on the retail sale price of all recreational cannabis products. The rate applies uniformly to usable marijuana, immature plants, edibles, concentrates, extracts, and topicals.³ Oregon has no general sales tax, so the 17% is the main tax a consumer sees at the register. Local governments may add their own cannabis tax on top.

Local Bans

Cities and counties can prohibit licensed cannabis businesses from operating within their borders. The process runs through the ballot: residents file a petition signed by at least 10% of registered electors, the local governing body puts the question on the next statewide general election ballot, and a simple majority can prohibit all OLCC-licensed operations. A ban takes effect on January 1 following the election.³

Bans aren’t permanent. ORS 475C.457 lets a city or county government repeal its own prohibition ordinance without a new election.³ Anyone planning to open a cannabis business should confirm the current status of the target city or county before signing a lease.

Federal Risks Oregon Law Cannot Fix

Chapter 475C only governs state law. Federal law layers on separate consequences that nothing in 475C can override.

Firearms

Federal law bars any “unlawful user of or addicted to any controlled substance” from possessing firearms or ammunition under 18 U.S.C. § 922(g)(3).⁵ Recreational cannabis remains a Schedule I substance federally, so anyone who uses it is considered a prohibited person who cannot legally buy or possess a gun, no matter what Oregon law says. Checking “no” on the ATF Form 4473 question about controlled substance use while actually using cannabis is a separate federal offense for making a false statement. This is one of the most common traps for Oregon cannabis users who also own firearms.

Taxes for Cannabis Businesses

Section 280E of the Internal Revenue Code has been the harshest federal rule for cannabis operators. It bars any deduction or credit for expenses incurred in a trade or business trafficking in Schedule I or II controlled substances, which has meant cannabis businesses pay federal income tax on gross revenue rather than net profit.⁶

A federal rescheduling on April 23, 2026 moved FDA-approved marijuana products and marijuana products regulated under a qualifying state medical license from Schedule I to Schedule III. Recreational cannabis, unlicensed marijuana, and synthetic cannabis remain Schedule I. State-licensed medical entities must apply for a new DEA registration within 60 days of the order and can keep operating under their state licenses during review. The IRS has indicated that rescheduling removes Section 280E as a barrier for qualifying medical businesses, with a transition rule treating the full taxable year containing the effective date as free from 280E restrictions. The relief is prospective only, with no refunds for prior tax years. Businesses that run both recreational (still Schedule I) and medical (now Schedule III) operations will need to apportion expenses between the two.

Banking

Most major banks still refuse cannabis businesses because handling the revenue creates potential federal money-laundering liability. The SAFER Banking Act, which would create a safe harbor for financial institutions serving state-legal cannabis companies, had not passed Congress as of 2026. Some operators access services through smaller banks and credit unions willing to carry the compliance burden, and ACH payment processing has grown. The lack of reliable banking still raises security risks and complicates paying taxes and employees.

1
Oregon Public Law. Oregon Code 475C.337 – Unlawful Possession by Person 21 Years of Age or Older
2
Oregon State Legislature. Oregon Code 475C.305 – Applicability of Provisions to Homegrown Plants, Homemade Cannabinoid Products and Concentrates, Specified Possession and Delivery
3
Oregon State Legislature. Oregon Code 475C – Cannabis Regulation
4
Oregon Public Law. Oregon Code 475C.233 – Prohibition Against Obfuscating Mark or Label or Using Mark or Label to Deceive
5
Office of the Law Revision Counsel. 18 USC 922 – Unlawful Acts
6
Office of the Law Revision Counsel. 26 USC 280E – Expenditures in Connection With the Illegal Sale of Drugs