Oregon Recreational Marijuana Sales Begin October 1

Oregon Recreational MarijuanaAt first, it seemed like a foregone conclusion. When the Oregon legislative session closed on July 6, an incredible amount had happened in the state’s cannabis space, including the passage of a bill allowing early marijuana sales. But then over three weeks passed and Governor Brown still had not signed the very skinny SB 460. She finally did on Tuesday.

On October 1, Oregon medical marijuana dispensaries can begin limited pot sales to adults over 21. These adults can purchase seeds, non-flowering plants and up to a quarter ounce of dried leaves and flowers, per day. Though more restrictive than allowed sales under next year’s full recreational program (for example, this temporary program does not allow for edibles) these offerings are a critical start.

It’s no secret that stiff competition from both regulated and black market competitors has made life tough for medical dispensary operators of late. Though some of our firm’s Oregon cannabis clients have fared well, others have been just hanging on in the hopes of a bump from the early sales program. Because the early sales program does not tax products until January 4, that bump could be substantial.

After January 4, the tax holiday ends. A 25% sales tax will ensue and run through the end of the temporary sales program, which is December 31, 2016. By then, the Oregon Liquor Control Commission (OLCC) will have issued licenses for recreational dispensaries, and those sales will also be underway (taxed between 17% and 20% under House Bill 2041).

So what’s next? SB 460 allows local cities and counties to prohibit the temporary sales, and surely a few of them will. Also, the Oregon Health Authority (OHA), which runs Oregon’s existing Medical Marijuana Dispensary Program, is tasked with adopting rules to implement the temporary sales program. The new law doesn’t give much guidance on those, only providing that the rules must “ensure public health and safety” and “comply with [SB 460].” No word yet from OHA on when the rulemaking process will begin, although it will be soon and dispensaries should stay apprised to give input during that brief process.

In addition to gearing up for temporary sales, medical dispensaries and other recreational program hopefuls should be taking key steps to prepare for Oregon’s new recreational program. Draft rules for that program should surface in under two months.