Matt Miller’s family has farmed pot in Oregon since well before it became legal.
But since the market flooded after recreational use was approved by state voters in 2014, prices have plummeted, putting strain on the operation he runs with his wife, Rhea.
Oregon’s lush climate and weed-tolerant culture have long resulted in large and potent harvests. Seeking to fold black market growers into its budding legal industry, the state has distributed licenses liberally, leaving Oregon saddled with an enormous surplus of legal cannabis — more than its small population of 4 million would ever be able to smoke.
Now, Oregon lawmakers are hoping to tackle the problem, with two bills signed into law in the past week; one aimed at curbing excess production and the other seeking to establish new markets to funnel excess weed into.
Senate Bill 218 gives the Oregon Liquor Control Commission more power over issuing new licenses based on an assessment of supply and demand conditions. SB 582 aims to lay the groundwork to eventually divert the state’s oversaturated marijuana market by giving the governor the green light to enter into agreements with other states for cannabis imports and exports.
It is illegal to transport cannabis to other states, and so the export legislation hinges on action in Washington, D.C., in the form of a change in federal law or guidance issued by the U.S. Department of Justice allowing or tolerating interstate transfers.
The Trump administration has been unfriendly to legal weed. Last year, then-Atty. Gen Jeff Sessions rescinded an Obama-era federal policy called the Cole memorandum, which allowed states to legalize pot without the threat of a federal crackdown. Sessions’ replacement, William Barr, confirmed to U.S. senators in January that he would not push for this crackdown (which never materialized under Sessions). But his hands-off approach to legal weed does not by any means signal that the administration would allow trade between states.
Adam J. Smith, founder and director of the Craft Cannabis Alliance based in Oregon — which helped push for the export bill — is optimistic that a change at the federal level is around the corner, particularly if a Democrat defeated Trump in 2020.
It just doesn’t make sense, he said, that states legalizing weed are forced to create their own self-contained industry.
“You have people using water in the desert in Nevada to grow mediocre cannabis, or in Florida, where they have to dehumidify giant spaces, consuming twice the energy,” Smith said. “Oregon wouldn’t have an oversupply problem if we could access legal markets like these.”West Hollywood’s original marijuana dispensaries fear city will leave them behind »
Recreational marijuana is legal in 11 states; medical marijuana is legal in 33.
Smith and other advocates are exploring the idea of pushing a similar bill — giving officials authority to enter into marijuana trade agreements with other states — through the Legislature in California. The end goal is to move cannabis between states by 2021.
Unlike other states that have legalized recreational marijuana, including California, Washington and Colorado, Oregon did not implement tight restrictions on the number of cannabis licenses. (Some of these states also have gluts of marijuana. However, a smaller proportion of the supply is legal and on the books, and their populations are larger so the supply-to-demand dynamic isn’t as stark as Oregon’s.)
Oregon recognized that for generations cannabis culture has been part of its fabric, and decided to allow the black market growers into the legal market, according to Andrew Livingston, director of economics and research at Vicente Sederberg, a Denver-based law firm that provides legal and policy services to cannabis businesses.
“They put out advertisements, they did a whole ‘go legal’ campaign to attract Oregon cannabis growers to the legal market, and it worked. People jumped on board,” Livingston said. “They wanted to make it as easy as possible to make those businesses become legal and licensed.”
The result was about 2,100 grower licensees as of January, and enough weed that it would take an estimated 6.5 years to sell it all within Oregon without any more production, according to a 2019 Oregon Liquor Control Commission report.
If that were the case, much of the supply would actually go stale, since it has a shelf life of maybe four to eight months if sealed and kept out of the light, Livingston said. As a result, many producers are turning their supplies of weed into extracted oil, which lasts a bit longer — over a year.
The median price of weed in Oregon fell steadily over two years, from over $10 per gram in October of 2016 to less than $5 in December 2018.
Because the market was flooded, the Millers grew in only half of their 40,000 square feet of permitted space last year, and at the same time, the price of the flower has dropped precipitously.
“Those two things really hit us fast and hard. It was pretty scary and intimidating,” Matt Miller said.Legal weed can raise the roof on home prices »
Giving the commission more leeway to stanch the flow of new licenses is a practical move on the state’s part, Livingston said. But the law is likely to have limited impact since the state already placed a moratorium on processing new licenses a year ago.
A January audit by the Oregon secretary of state’s office found Oregon’s regulatory systems were weak, and lacking in adequate inspections.
Oregon and California historically have been the two leading producers of marijuana in the nation — and growers in both states illegally export large quantities (though it’s difficult to quantify exactly how much), said Hezekiah Allen, a cannabis lobbyist and former head of the California Growers Assn.
California, like Oregon, struggles with an oversupply of cannabis. Though Oregon became the first state to decriminalize marijuana possession in 1973, the state did not create a medical marijuana program until 1998, two years after California.
Vessel Logistics, a San Francisco-based cannabis distribution company, said in a report that the cannabis industry in California has over-relied on the black market and out-of-state sales, causing producers to overestimate the state’s actual demand, according to the Sacramento Bee.Black market cannabis shops thrive in L.A. even as city cracks down »
In California, patchwork of rules governs individual jurisdictions. About 75% of municipalities don’t allow retail sales — and those probably have illegal operators who have been selling for years. California’s Bureau of Cannabis Control has sent about 3,500 cease-and-desist orders to illegal retailers since January 2018.
California’s surplus is worsened by the fact that the state has limited licensed retail stores — people aren’t buying cannabis from licensed retailers, Allen said.
“We don’t have enough places to sell the stuff, so that’s a big problem,” Allen said. “Folks everywhere in the country are consuming cannabis, and very few states produce significant amounts.”
He pointed out Oregon’s legislation would not be helpful for trade with nearby states that also have an oversupply. California has too much; so does Washington, another early legalizer.
“It’s awesome Oregon is trying to do something, but the real solution really will come at the federal level,” Allen said.
This article originally appeared on latimes.com
FDA AND DEA BLAME EACH OTHER FOR KEEPING MARIJUANA ILLEGAL
Written By: Michael Ashworth
With all the health benefits of marijuana, it is common to wonder how it has ever been illegal. In fact, both the FDA and the DEA blame each other for keeping the prohibition of marijuana going and not legalizing it sooner.
Celebrity doctor Mehemet Oz, Dr. Oz for short, TV host from the popular daytime program of his namesake, was interviewed recently and asked for his professional opinion on marijuana and has been quoted as saying, “marijuana is one of the most underused tools in America.” He has had conversations with individuals from both enforcement agencies, saying they feel the same way. So, why has it not been legalized sooner, or why is not fully legal on a federal level?
Apparently, both agencies feel it should be used more widely, but it is hard to study it because of the way it is regulated. The DEA says that it should be legal but that the US government needs to get fully on board while the FDA, who regulates it, says it should be used but until the DEA says it should be allowed, they cannot prescribe it everywhere, like a catch-22 stalemate between both agencies.
“It’s a lot safer than alcohol. It’s safer than narcotics. It ought to be used more widely and we can’t even study it that easily because of the way it’s regulated,” Dr. Oz said. “You know what, I called the DEA—they said, ‘we don’t want this to be illegal. Your government ought to change that. But we got to enforce the law.’ I call the FDA that regulates the drugs, they say, ‘we think it ought to be used, but until the DEA says it’s allowed, we can’t let people prescribe it everywhere.”
Federal marijuana reform outside of Congress falls largely within the jurisdictions of both these agencies. The DEA itself denies several rescheduling attempts, saying the FDA has determined medical cannabis has no proven medical value and poses potential risks.
Dr. Oz has made public comments about the therapeutic effects of cannabis and previously asserted it could serve as an effective tool to combat the opioid epidemic. He said, “I’m hoping the federal government at some point—someone’s going to say, ‘come on, this is a farce, open it up for the entire country.’ That way, the right people can begin to prescribe it.” Influential voices such as this, help to point out what federal red tape can really look and sound like and it makes sense for the cannabis industry to use them, so that federal reform decisions can be made with staying power.
Cannabis Dispensary Law 2014
In August 2019, the State Supreme Court ruled that San Diego County failed to sufficiently analyze potential impacts of its 2014 Marijuana Dispensary Law. The ruling was unanimous and is expected to limit the discretion of local governments across California.
The court ruling decided that local governments must consider foreseeable impacts to the environment when establishing a new cannabis dispensary business. Zoning laws change and local governments must properly analyze potential impacts of these changes by conducting an environmental analysis.
San Diego county had originally declared that the 2014 Marijuana Dispensary Law didn’t require any environmental analysis. Now, it needs to study whether allowing cannabis dispensaries might result in construction of new buildings or change city wide traffic patterns, the court says.
A Los Angeles attorney, Jamie Thomas Hall, filed a suit against San Diego, saying they must make more rigorous environmental reviews when planning to add marijuana dispensaries to their city.
With this ruling, two-thirds of California cities that don’t allow marijuana businesses are forced to get in the game. It also limits cities abilities to streamline the state’s environmental laws, like housing reforms that manipulate zoning laws to build more houses.
“I think cities have been pushing the envelope of what is possible,” Hall said by phone.
Housing reforms in San Diego County, for example, involve density bonus programs that are pushed to the limit, allowing developers to build more housing than zoning permits. And, another law passed in March, grants developers the pass to build large housing projects in transit areas without any parking spaces.
San Diego County has carried out these reforms without conducting rigorous environmental reviews of potential impacts to the environment, both direct and indirect. Even if the impact is legible, the city must now look at it. It’s a 41-page ruling, which overturns a 4th District Court of Appeal in 2016 which favored the city.
“It’s a precedent-setting ruling” said Murtaza Baxamusa of the San Diego Building and Construction Trades, an influential labor union.
The impact on the city’s 23 marijuana dispensaries, remains unclear. The League of California Cities filed documents in the case, defending San Diego’s position, and agreed that its present dispensaries may not be effected.
Jessica McElfresh, a local marijuana attorney, sees little impact on existing businesses. “With the ruling, we are not expecting day-to-day existence to change for current licenses” she said. Although, future marijuana dispensaries are likely to be effected, McElfresh added.
Written By Michael Ashworth, Contributor
Attorney General Nominee Vows to Respect State Marijuana Laws
Barr stated in confirmation hearing Tuesday that he would not use federal resources to target state-legal cannabis businesses, urged Congress to end legal conflict
WASHINGTON, D.C. – During Senate confirmation hearings on Tuesday, attorney general nominee William Barr stated that he would respect state cannabis laws and legal businesses when it comes to enforcing federal marijuana statutes. In response to questioning from Sen. Cory Booker (D-NJ) and Sen. Kamala Harris (D-CA), Barr stated that if confirmed, his “approach to this would be not to upset settled expectations and the reliant interests that have arisen as a result of the Cole memorandum.” Upon further questioning, he stated that he “is not going to go after companies that have relied on the Cole memorandum.”
The Cole memo, issued in 2014, directed federal prosecutors not to use resources to target businesses or individuals that were in compliance with state cannabis laws and met a set of public safety criteria. That guidance, which gave many businesses and state governments the confidence to move forward with implementing regulated cannabis markets, was rescinded in January 2018 by then-Attorney General Jeff Sessions.
“Mr. Barr is correct in acknowledging that many Americans rely on the legal cannabis industry and the successful state marijuana programs operating throughout the country today,” said Aaron Smith, executive director of the National Cannabis Industry Association. “His pledge not to use Department of Justice resources to undermine state laws provides assurance to over one hundred thousand cannabis industry employees, thousands of legal businesses, and the many state and local governments reliant upon marijuana tax revenue.”
During the hearing, Barr stated that he supports federal marijuana prohibition even though he would continue the policy of non-enforcement, but was critical of the disparity between state and federal law, calling on Congress to pass legislation that would address this issue.
“State marijuana laws are successfully replacing criminal markets with responsible small businesses and it is long past time for Congress to enact legislation that respects those laws,” continued Smith. “We will continue to work with lawmakers to make sure it is a priority during this session.”
Several comprehensive cannabis policy reform bills that would allow states to determine their own laws without federal interference are expected to be considered this year, including the STATES Act and the Marijuana Justice Act, as well as a number of other bills related to issues such as allowing banks to more easily work with cannabis businesses and reforming the tax code to treat the cannabis industry fairly.