Plans for a half-acre marijuana farm in the rolling hills of Yamhill County are on hold in a fight that pits Oregon's new legal agricultural crop against a valuable Willamette Valley industry.

Richard Wagner was acquiring the necessary paperwork to start growing about 1,000 pounds of marijuana and then process it on his property when vineyard owners next door intervened. They appealed the tentative approval of Yamhill County planners for the processing plant, saying the odor could affect their grapes.

On Thursday, the Yamhill County Board of Commissioners voted 2-1 to uphold the appeal.

Planning Director Ken Friday said he had attached 15 conditions to the approval of the site design review for Wagner's operation– many of which mirror the hoops wineries must jump through to grow and process grapes on site, such as how outside lights must be angled and proof of water rights prior to opening.

Some were also specific to concerns brought up by neighbors, with the county planners limiting how much marijuana can be processed on site each year and requiring odor mitigations so the funk of pot wouldn't waft into nearby nostrils.

The two commissioners opposed to the farm said they think marijuana processing should be done in areas within the city limits zoned for industrial uses, rather than in rural areas.

"There's a lot of passion on both sides. It's hard sometimes when you have to separate that passion from the facts," said Commissioner Richard Olsen, who as McMinnville mayor voted to allow processing in city limits.

He voted against Wagner, he said, because he's concerned about how much water the processing facility might use and what could happen to the wastewater in an earthquake, he said.

Mary Starrett, the lone commissioner in support of the processing facility, said she doesn't want to apply different standards to marijuana farms and wineries.

"It really is like having to pick and choose what products or what farm crops we're going to thumbs-up or thumbs-down," Starrett said.

The Momtazi family, along with neighbors Harihara and Parvathy Mahesh, filed the appeal of the processing facility. They also asked a Yamhill Circuit Court judge for a temporary restraining order on any work on the farm, which was denied.

They say the smell from the marijuana harvest will ruin the taste of their grapes, which they sell to wine makers. According to their lawsuit, the Momtazis already have lost one customer. They also fear Wagner could grow 8,000 pounds of marijuana a year – a claim that Wagner says is much more than he expects.

The Momtazis have grown grapes for 18 years and own about 580 acres along Muddy Valley Road southwest of McMinnville. They sell their grapes under the name Momtazi Vineyard and produce wine under the label Maysara.

Wagner plans to convert a horse and cow pasture into a half-acre of outdoor marijuana fields. The seven-acre property he bought for $682,000, with financial backing of his parents Steven and Mary Wagner of Southwest Portland, includes a home and barn.

In court filings, Wagner said he hasn't started preparing the farm for growing marijuana yet or asked the Oregon Liquor Control Commission for a license to cultivate and process pot.

Wagner and his parents declined to comment after the meeting, saying they were weighing their options on how to proceed.

The county will issue its final order on June 22. At that point, Wagner could appeal to the state Land Use Board of Appeals.

There, the county commissioners would have to choose whether to defend their decision or not. Friday said that since this issue is uncharted territory, commissioners usually would advocate their position to the state.

There are about six operations similar to Wagner's already permitted in Yamhill County, Friday said. Wagner's is the only one that has been appealed.

Katie Kulla, who grows produce and marijuana in the county, showed up in support of the farm. She was upset by what she saw as a more powerful wine industry halting the progress of small pot startups.

"It's disappointing to see what appears to be a continuation of a historical misunderstanding of marijuana," Kulla said.

-- Molly Harbarger

mharbarger@oregonian.com

503-294-5923

@MollyHarbarger