My columns with the fewest number of “likes” are ones that deal with cannabis policy. However, the least sexy topics—like the wonkery surrounding the bills that pertain to how we produce, sell, and consume cannabis in Oregon—are of far greater importance than my hot take on the new OG Purple Ghost Rider Cookie Kush. (“It tasted of pot, and I felt high.”)
With that in mind, let’s talk about two bills in the current Oregon legislature: Senate Bill 1057, which just became law, and House Bill 2198, which is under consideration as of this writing and will most likely pass. These bills could mean some big changes, good and bad. HB 2198’s primary function, for example, would be to change the official name of the Oregon Liquor Control Commission to the Oregon Liquor and Cannabis Commission.
SB 1057 specifies, among other things, that an Oregon Medical Marijuana Program (OMMP) cardholder can have six medical cannabis plants as permitted by OMMP rules, in addition to the four additional plants allowed under Measure 91, the 2014 ballot measure that legalized cannabis in the state. This is progress, because some medical patients use FECO (full extract cannabis oil) daily, and growing what’s needed to produce a year’s supply is more than most can harvest from six plants.
SB 1057 also allots certain OLCC-licensed growers to tack on an additional 10 percent of their existing canopy square footage to produce cannabis for medical use, as long as they donate 75 percent of the crop for free. I know recreational growers who would love to grow for medical patients, and this will allow them to do so at no cost to the patient. So far, so good.
But then there’s an amendment that allows select medical growers, if they meet certain requirements as laid out in House Bill 2198, to transfer up to 20 pounds of their crop to a recreational wholesaler or processor. Does that sound fair? It’s not.
Recreational growers pay staggering number of fees to produce and sell cannabis solely within the recreational adult-use marketplace. That’s where the majority of sales occur in Oregon, and all taxes are collected from those consumers, as OMMP cardholders are exempt from the recreational sales tax (17 to 20 percent, depending on location).
As of October 2015, there were 48,699 registered OMMP growers. If only 25 percent of that number transferred those 20 pounds to the recreational market, that’s more than 240,000 pounds of cannabis entering a marketplace that last year sold approximately 44,000 pounds of flower. More crop was used for edibles, extracts, and topicals, of course, but this is still a significant and potentially disruptive amount of product that could enter the marketplace from medical growers—who are exempt from the rules, fees, and permits required of recreational growers. These medical growers aren’t even required to register as a business.
I’ve talked to some who think this provision may be a reaction by the legislature to the Cole memorandum, the Obama-era document that left room for states to undertake a recreational cannabis program if they follow several basic rules, one being that cannabis can’t leave the state in which it was produced. Now that Attorney General Jeff Sessions is making noise about cracking down on state recreational programs, any actions taken by Oregon to demonstrate efforts to curb product leaving our borders may take the heat off. And allowing the surplus to be sold in this manner could be viewed as proactive by some.
However, it may well have the exact opposite effect. I spoke with Meghan Walstatter of Northeast Sandy’s Pure Green dispensary, which she owns with her husband, Matt. “Medical grows have lower overhead than recreational grows,” she said, “and they will be allowed to ignore many of the expensive regulations that OLCC licensees must follow, bringing their costs down even further. This will allow them to sell their product at a lower price than OLCC licensees who have played by the rules.
“Dispensaries would then sell this product at a lower price, reducing the taxes seen by the state and the local governments who have opted in to the local tax program,” Walstatter continued. “Because medical growers are subject to substantially less scrutiny than OLCC licensees, and because the market will be flooded with inexpensive, medically grown product, it creates conditions ripe for diversion into the illegal market. This is a major concern for the state, and we will be exacerbating any existing issues in this area.”
Even if all this cheap weed does cut down illegal out-of-state sales, at what cost? Decimating the efforts of fee-paying recreational growers to save our adult-use program is not a good plan. Let’s hope the cure doesn’t kill the patient.