Oregon Marijuana: Time To Get Serious About Bad Actors

Though Oregon has finally established a regulated licensing system for its medical marijuana dispensaries, too many dispensaries are still operating without a license to do so. If Oregon allows this dual (legal/illegal) system to keep operating, it risks both federal government intervention (i.e. raids and arrests) and a system that economically discriminates against those who seek to operate within the law.

In the by now infamous Cole Memo, the federal government has made clear that “if state enforcement efforts are not sufficiently robust … the federal government may seek to challenge the regulatory structure itself in addition to continuing to bring individual enforcement actions, including criminal prosecutions, focused on those harms.”  The longer Oregon allows its legalized regime to be ignored, the more likely the federal government will act against it.

The failure of so many to abide by the Oregon’s regulatory laws also generates unlicensed competition, patient safety issues, and potential black market activity. If Oregon wants its dispensary program to succeed, the State’s law and regulatory enforcement must undertake a more serious effort to shut down non-compliant actors.

Passed in 1998, Oregon’s Medical Marijuana Act (OMMA) is similar to Washington and California’s medical marijuana laws. OMMA allows patients with qualifying illnesses to possess and consume a certain amount of marijuana without the threat of arrest or prosecution. The statute, however, failed to provide mechanisms for creating a transparent and lawful chain of distribution regarding marijuana production and retail sales to patients.

Essentially, medical marijuana “outlets” and medicine distribution existed (and still exist) in a legal gray area, which put MMJ entrepreneurs and patients at risk of prosecution. Nonetheless, under the original OMMA, more than 200 medical marijuana facilities set up shop in Oregon without any State oversight, regulation, or standards, which in turn created a well-entrenched gray marketplace for medical marijuana.

To address the problems inherent in the original OMMA, Oregon enacted House Bill 3460 in 2013. HB 3460 strictly focuses on regulating and licensing the State’s medical marijuana dispensaries. It has set up a marijuana system for Oregon that requires dispensaries to follow a succinct set of laws and guidelines to obtain a license from the State, which includes undergoing background checks, meeting quality standards, and developing comprehensive security and safety systems for employees and patients.

Despite the passage of HB 3460, however, many dispensaries in Oregon continue to operate in a pre-regulation world with no license, no police enforcement, and no State oversight. These businesses plainly exist in direct violation of State regulatory law (this includes delivery services which are now barred pursuant to House Bill 3460). If Oregon hopes to make significant progress towards a safe, uniform dispensary system under HB 3460, its only option is to seek out and shut down those that operate outside the law.

Without an even playing field of licensed State dispensaries, HB 3460 will not be successful in its efforts to provide patients with safe access to medical marijuana. It also increases the risk of federal government intervention and arrests, which is the last thing we want to see, especially with legalization of adult use on the horizon.