It's no secret that Oregon is producing more marijuana than it's consuming. By one estimate, Oregon sold slightly more than 10 percent of what it produced in 2017. Mind you, some of that excess will be made into extracts and concentrates, which require large amounts to produce small quantities of useable product.
Still, the issue has escalated to the point that the Oregon Liquor Control Commission announced last week that it's pressing "pause" on processing applications for new licenses. That should at least temporarily quell concerns by some in Deschutes County, worried that our region might soon be overrun by people trying to use exclusive farm use land in the wider county to blanket rural areas with farms producing a product they don't like.
Meanwhile, new rules went into effect last week, adding many medical marijuana growers to the OLCC tracking system. That comes with more fees for medical growers, and, at least in theory, more oversight by the OLCC. The Senate bill that put that new system in place also makes provisions for a new "marijuana market enforcement grant" fund, available for city and county law enforcement to access—all an attempt to solve the oversight problem some local officials have decried locally. We hope that effort quells the concerns of law enforcement officials, who clearly don't want weed in our county—or state—at all.
Halting applications for new licenses is an attempt at market correction, and we don't see that as necessarily a bad thing. Some have said the state should stay out of it and should allow the market to correct itself, law of the jungle style. We don't agree. That's how we got here in the first place—that, and perhaps a lack of foresight by the Oregon legislature in not capping licenses in the first place. By way of contrast, take a look at Washington, which capped the number of licenses issued at the time of legalization.
But here we are.
While some might say the OLCC has had too-heavy a hand in regulating the sale of alcohol in Oregon, one might also look at it another way. They've limited the number of liquor stores allowed in a municipality. They also set the prices. Those policies have meant there's less competition in the marketplace, but they've also meant that businesses already in the game have a viable business. Considering that's how the OLCC has long dealt with alcohol-related businesses, it should come as no surprise that similar treatment may come to cannabis.
What's at stake are the mom-and-pop canna-businesses that are struggling in the current business landscape. There's too much product out there, and that's driven the prices to rock bottom. Add in the threat of consolidation and buyouts from out-of-state investors with deep pockets, and the locally-owned businesses suffer greatly.
Of course, the ultimate solution would be to lift the federal regulations that don't allow interstate commerce for cannabis. Oregon is known for producing good pot, and like its craft beer industry, lifting those restrictions would allow us to export our weed legally. While a pro-recreational marijuana federal policy might still seem like a pie in the sky notion, so too was the entire recreational market just a decade ago.
Right now, out-of-state investors are beginning to cash in on the industry in Oregon – all while local producers are able to only sell their goods in the state. In other industries, getting "bought out" is a startup's dream. With the compounding pressures of heavy regulation and an unfavorable federal cannabis policy, is it any wonder that a pot startup would sell out?
Keeping an eye on consolidation and choosing to support the moms and pops over the Starbucks-style dispensaries with out-of-state money will at least ensure that products produced in Oregon ultimately benefit Oregonians, not out-of-state investors. To quote our own cannabis columnist, Josh Jardine, "Small businesses are what drive our economy, and it would be great if the deck were not so firmly stacked against the cannabis industry so as to allow smaller operators to flourish."
The inconsistencies at the federal level will continue to drive chaos in the market. We tentatively support a halt in license applications in the interest of nurturing and protecting the local businesses that have already set up shop in this industry and hope that they can hold out while the regulatory environment grinds on.
