Oregon Marijuana: The Uneven Course

imagesOn Friday, Reason magazine published a well-researched article titled “Oregon Charts an Uneven Course Toward Legal Marijuana Sales.” Anyone who cares about the Oregon cannabis market would do well to read it. The article breakout offers that “overregulation of the industry keeps cannabis business owners in limbo.” This thesis is somewhat predictable, as Reason has a libertarian bent as the self-proclaimed circular “of free minds and free markets.” Still, the article makes its points in a fair-minded manner and it echoes our longstanding observation that although Oregon is as good as it gets for a pot market, it is paradoxically overregulated.

The Reason article features a few different cannabis entrepreneurs, including the owner of a state-shuttered cannabis café, to drive home the point that cannabis in Oregon is not yet “normalized” from a rule-making standpoint (whatever that could mean, given federal prohibition). Reason critiques many changes the Oregon legislature made in implementing Measure 91, the initiative that legalized recreational marijuana in the state. The article casts blame on Oregon for imposing “incredibly onerous” cannabis testing guidelines, which it argues have caused a supply chain bottleneck.

Though we agree that the Oregon state rules on testing are tough, we see a few things going on here. First, it has been apparent for months that too few laboratories had applied to test marijuana in Oregon, regardless of the testing strictures. There simply seem to be fewer people out there with the wherewithal to test cannabis than to grow it. Second, Oregon had a pretty bad scare with tainted cannabis products as recently as last year. In reaction, the state adopted strong public health and safety regulations. (On this point, it is worth noting that though the federal government expects states to regulate their cannabis programs comprehensively, it offers virtually no guidance on these issues.) Finally, it is clear that Oregon has tried to thread the needle between maintaining high standards and moving the program forward, mostly through temporary rulemaking. Reasonable minds can disagree on the success of each administrative tactic.

As cannabis lawyers who deal with the state almost daily on cannabis issues, we echo observations in the Reason article that Oregon wants its pot programs to work, that its hiccups are mostly growing pains, and that the Oregon Liquor Control Commission (OLCC) in particular has done yeoman’s work with an eye toward long-term success for cannabis in the state. As for the Oregon Health Authority, that agency seems to be on its way out, and we have suggested the state would do well to relieve it of its duty in the next legislative session. With respect to cannabis program entrepreneurs, we continuously remind our clients that they need to pull their weight, too. That includes getting OLCC applications in as soon as possible, so as not to be left out in the cold come 2017.

The cannabis testing bottleneck in Oregon has already begun to clear, and it is possible that Oregon, like Colorado, will allow for public marijuana consumption as soon as the next legislative session. In the meantime, we may see other market challenges, like a possible shortage of licensed OLCC processors, or something entirely unforeseeable. Absent any affirmative federal interference, however, the state and its entrepreneurs will continue to work together as we move through these issues.

One lesson to take from all of this is that implementation of a state cannabis program is never a smooth ride. States tend to operate in a reactionary manner with respect to marijuana, beginning on Day 1, when their legislatures are tasked with implementing programs by their forward-thinking residents. That process has been bumpy in Washington, Colorado and Oregon, and it will be no different in California and each of the brand new cannabis states. The course is “uneven,” but it’s the only course we’ve got.