We recently mentioned that the Oregon Health Authority would soon offer guidance on seed-to-sale tracking requirements for medical cannabis. Last week, the Oregon Health Authority (OHA) did exactly that, with its Medical Marijuana Information Bulletin 2017-07. The Bulletin comes pursuant to Senate Bill 1057, the most significant pot bill of the recent Oregon legislative session. In our recap of that bill, we ended with our oft-repeated observation that “the OHA regime will soon recede to strictly limited, patient-caregiver relationships. The money there is gone.” So, this is a public service post for anyone out there growing marijuana in the OHA system with the goal of helping patients and not getting rich.
As a reminder, the goal with SB 1057 and tracking medical marijuana in Oregon is to limit diversion and black market activity. To accomplish this, SB 1057 gave the following parameters for tracking:
- Required marijuana produced and transferred within OHA’s Oregon Medical Marijuana Program (OMMP) system to be tracked by the OLCC tracking system. (The OLCC oversees non-medical, adult use marijuana.)
- Specified funding for the tracking system to be paid from the Oregon Marijuana Account prior to any other distribution.
- Required OHA to impose an additional fee on marijuana grow sites, processing sites, and dispensaries to pay costs incurred by the tracking system.
- Specified timelines for tracking system phase in.
As provided in last week’s OHA Bulletin, December 1, 2017, has been chosen as Oregon’s tracking system phase in date. On or before that date, OMMP registrants will be required to track the production, processing and transfer of all marijuana items in the OLCC’s Cannabis Tracking System (CTS), and pay an associated fee of $480. The alternative is to apply for an OLCC license prior to January 1, 2018, or to indicate that the registrant falls under an exemption. The exemption is narrow: it occurs only where a registrant is a patient growing for him- or herself, with a ceiling of 12 mature plants and 24 immature plants.
Did we mention it would be impossible to make any money in the OHA system going forward? It is. Going forward, the only marijuana sold at retail to medical cardholders will be at OLCC licensed dispensaries, tracked in CTS. In that sense, the December 1 deadline should come as a surprise to no one: SB 1057 has been on the books since May, and OHA licensed dispensaries had become vanishingly rare before that. If any OHA licensed dispensaries still exist after December, they will likely be vestigial to sparsely populated eastern Oregon counties, where bans on adult use sales continue.
Even with all of this context, we still get occasional clients coming to our office looking “to invest in an Oregon medical marijuana grow.” If the individual has been pitched on that, we tell them to run. As a business proposition, the medical marijuana program in Oregon had a good run from 2013 to 2016, but those days have passed. The recent OHA Bulletin regarding December 1 and CTS confirms it.