The Cannabis Issue 2016
WHEN THE MERCURY put out its last weed issue ["The High Life," Feature, April 15, 2015] exactly one year ago, recreational marijuana was not yet legal in Oregon. Measure 91 had passed and everyone was anxiously awaiting July, when adults 21 and older could legally possess weed for personal use. At the time, we knew that the legislature would enact laws to implement Measure 91 in the summer, and that the Oregon Liquor Control Commission (OLCC) would be running the administrative show. Really, that was all we knew.
Measure 91, like most initiatives, was voted for by many people, but actually read by very few. While the initiative was quite specific in how it articulated the recreational program, subsequent legislation brought some big surprises. Some of these were unfortunate, like the ability of cities and counties to opt out of recreational marijuana altogether, and, nearly as controversial, the short-lived residency requirement for owners of pot businesses. Other surprises were welcome, like early sales to recreational customers through existing medical dispensaries. No doubt many Oregonians will always remember where they were on October 1, 2015.
That date in particular was decades in the making. Oregon was the first state to decriminalize weed in small amounts, way back in 1973. We have had a medical marijuana program since 1998, and the Oregon Health Authority (OHA) has run its Medical Marijuana Dispensary Program since 2013. By today's standards, both of those programs were primitively structured and lightly regulated. Like the 1973 law, the basic idea of the registry program was to protect brave souls from criminal liability, with no consideration to markets. That will not be the case going forward. While the new regime takes federal prohibition into account, the balance of rulemaking addresses economic realities here in Oregon.
It is hard to see around corners, although people often ask their lobbyists, legislators, and lawyers to do exactly that. So here is a forecast of how Oregon's programs will ultimately look: In the very big picture, the state will continue to push the medical and recreational programs together. This is already happening piecemeal; it started when the legislature tinkered with the medical program last summer, and continued most recently with last month's Senate Bill 1511, which allows recreational licensees to serve the medical market. The reason a full-on merger has not already happened is probably only political. Inevitably, it will happen.
If you've spent much time around Oregon's pot industry, you know that many people are extraordinarily protective of Oregon's medical marijuana programs, for good reason: The rights of growers and patients were hard won and people acclimatized to the warm gray market. Stepping back, though, it is axiomatic that "medical" marijuana never would have existed as a program if weed had been legal from the start. Today weed is legal in Oregon, yet two different state agencies govern one plant. That seems kind of strange.
Most medical pot operators I work with are moving (and sprinting) into the recreational market. The legislature has created bridges to expedite that process. There has been some painful duplication during this period, though; for example, the requirement for medical processors to pay $4,000 for an OHA license and another $5,000 for an OLCC license. Those costs will ultimately be pushed down to consumers, including patients with OHA cards. To some extent, that could continue even after the programs are fully built out.
Except for administrators, nobody likes administrative bloat. And nobody freaked out when the co-location bill recently passed. In fact, the reaction was quite the opposite. If and when the programs do eventually merge, a key legislative mandate will be safeguarding the ability of individuals with debilitating medical conditions to access weed. We see in the new provision that OHA patients can buy weed tax-free at recreational shops (SB 1511); the creation of nonprofit medical dispensaries that can receive free pot and give it away to impoverished people (SB 1598); and the recently reduced cost of a medical card for vets (HB 4014).
Assuming the programs merge, there is going to be a lot of triage, consolidation, litigation, guesswork, and general ups and downs. To a degree, all of this is already happening in the market. It will happen even faster as national and international investment money streams into the state, and it will accelerate again when federal prohibition ends. The saying "change is the only constant" is perfectly applied in the case of legal marijuana markets.
Sometimes, when the rules are changing so quickly that even lawyers have a hard time keeping up, it's tempting to throw up your hands in total exasperation. As surprising as it may sound, though, Oregon's marijuana programs are shaping up to be the best in the country. My law firm works with cannabis ventures nationwide, and the core principles of Oregon's efforts—low barriers to entry, no cap on licenses, no restrictions on investment, and encouragement of service providers—exist almost nowhere else. In a couple of years, we are going to look back and be very proud of our unified program.
Vince Sliwoski is a lawyer at Harris Moure. Read his Ask a Pot Lawyer column every week in the Portland Mercury.