OREGON

TOO MUCH OF “A GOOD THING”?

Much of Oregon is either temperate rain forest or high desert. Good growing country. The fields covered in wild flowers in the 1930s and 40s, now have a cultivated cannabis flower. Oregon was the first state in the union to decriminalize cannabis possession. Governor Tom McCall signed the legislation in 1973.

Over the years Oregon’s marijuana laws have had a complicated on and off and mutated history. Public use of cannabis has been consistently illegal, as has driving under the use of intoxicants. Except for medical marijuana regulations, intentionally growing any cannabis plant was a felony until July 1, 2015.

November 1998, the Medical Marijuana Act was established by ballot measure. It allowed medical card holders to possess up to 1.5 pounds of marijuana at a time. Cardholders or caretakers or official growers for cardholders were permitted to cultivate up to 18 immature plants and 6 mature ones at a time. A grower could grow plants for up to four cardholders.

In 2014, measure 91 was passed that legalized non-medical cultivation and uses and state taxation beginning July 1, 2015. Governor Kate Brown signed a bill permitting recreational sales in dispensaries starting October 1, 2015. Later this was refined to allow retail sales of both medical and recreational cannabis. The Oregon Liquor Control Commission was designated to regulate the cannabis business and after January 1, 2017, retail businesses needed to obtain a license. Recreational users may buy up to one ounce. Federal lands and tribal lands are under federal law and possession or use of cannabis is forbidden.

By early 2017, there were 260 licensed retailers and taxed at 20% of the sale, the state earned 78 million in tax revenues. Currently, there are over 545 active retailers. Like Colorado, cities and counties can ban recreational retail establishments.

The retail stores are attractively designed with appealing displays of carefully tested cannabis, as well as hand blown glass pipes and bongs. A serious interest in the botany and chemistry of cannabis has been marked. Sale of edibles can contain 16 ounces of infused product. Beverage form can contain 72 ounces.

Oregon has not placed a cap on the number of licenses issued for cultivation in this optimal growing ecosystem. Approximately 1,000 cultivation licenses have already been issued and about the same number are currently in the process of being issued. The result has been an impressive surplus, even a glut. Cannabis prices have fallen by 50% since 2015.

Oregon supplied enough recreational cannabis last year to provide every adult resident with over 5 ounces of legal cannabis. California supplied 1.4 ounces of cannabis for every adult resident this year. Because the federal government considers cannabis a controlled substance under the Controlled Substance Act, interstate sales, which would otherwise be the logical solution, are prohibited. So competition is fierce and many competitors are trying to establish vertical business models with cultivation, production and retail stores under one company, like the Nevada business model.

Since competition has stiffened, some growers are being forced out. Because of federal laws, declaring bankruptcy is not an option. As growers are forced to try to recoup some of their losses, the underground market can kick into effect moving marijuana across state lines, contravening the federal ones. In 2017, Oregon postal agents seized 2,644 pounds of marijuana in outbound parcels. Illegal production of hash oil resulted in six lab explosions. None of this includes the miles of open freeways in the West. This is the primary reason US Attorney for Oregon, Billy Williams, issued a memorandum in May citing interstate infractions and encouragement of criminal enterprise challenging federal law. The situation is unresolved.

Other legal cultivators have realized that replacing full-THC cannabis with non-psychoactive CBD rich industrial hemp plants offers a new opportunity. Industrial hemp has a more favorably ambiguous federal status. Hemp derived CBD oils, edibles, and topical ointments are shipped out of home states and sold freely in groceries and health stores. It is a grey area and some nervousness remains. But, the medicinal benefits of CBD products are receiving more recognition daily from establishment sources and the market appears slated for growth.

Urban areas of Oregon have recently undergone an almost startling surge of population growth, partially due to the vaunted liberal leanings. The “good things” arising from these attitudes have included a serious, well cultivated cannabis market. Can there be too much of a “good thing”? Will this innovative state will iron out the wrinkles of its new surplus and renew a thriving market?

A marketing and publishing professional and the Director of Publicity at GB Sciences, Liz Bianco monitors media activity and co-writes the “State of the States” on cannabis in America.


 

A consultant and co-author with Meredith Patterson of “Pillars of Brain Health” at BrainstormMindFitness.com, Pete Goodwin does research and co-writes the State of the States blog.


 

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