Oregon Cannabis Regulations Make for Cautious Market Roll Out

May 27, 2014 | Kris Hermes

Marguerite Arnold, Main Street

Oregon's road to cannabis legalization is as distinct as Colorado's as it is from that of Washington state.

One thing is clear, however: no matter where Oregon's eventual policy will lead eventually, the issue of cannabis legalization is currently generating a great deal of debate state-wide and drawing drawing, from at least some quarters, unfavorable comparisons to the grandfather of legalization, California.

Oregon like Washington is proceeding along a path to cannabis legalization that many have compared to the model of liquor licensing and acceptance, if not local prohibition. More than 70 cities in Oregon right now have voted to temporarily ban dispensaries in the aftermath of state legalization that extends to 2015.

"This is a situation we've seen in California over the past ten years, whereby the more sensible and compassionate municipalities regulated the distribution of medical marijuana by adopting local ordinances," said Kris Hermes, media liaison for Americans for Safe Access, the nation's largest medical marijuana patient advocacy group. "Oregon appears to be following in California's footsteps, not yet learning from its mistakes."

Oregon will have both dry counties and municipalities decided by local vote. Portland, Salem and Eugene are setting the pace on implementation of regulations and local business laws.

Per Hermes, this may assuage local concerns for everyone except the people the law is supposed to help the most – legitimate, legal, medical marijuana users. "For many Oregon patients, this will undoubtedly mean longer distances to travel to legally obtain medical marijuana...potentially putting themselves in harm's way and complicating the job of law enforcement," she said.

The first operating legal medical marijuana dispensaries were only allocated in late March of this year. The Oregon Health Authority, the state agency with oversight of the same, charges a $4,000 application fee with a non-refundable $500 application cost.

About 250 dispensary permits are anticipated to be authorized across the state for the near future.

Oregon is not alone in following a basic pattern set out by Colorado's lead in terms of aggressively setting a regulatory structure that reflects the needs of legislatures and the business community.

Chris Walsh, Editor of CannaBusiness Media, one of the pre-eminent marijuana business and analysis websites nationally, says this kind of situation is good for the burgeoning industry but is often not a win-win situation.

"Patients certainly aren't happy with these types of laws," Walsh said. "But limiting home grows is beneficial for the industry from a business perspective, as it funnels more patients toward licensed - and often heavily regulated - dispensaries."

Oregon's strict zoning law is not the only area of the vertical that is seeing new and much stricter regulation. There are many parts of the state's oversight of cannabis which are still largely uncontrolled, a reality that is changing fast. In this respect, the entire market is essentially in flux, from packaging to testing.

Oregon is not a completely unregulated market in terms of product. The biggest problems the state seems to currently be wrestling with stem from assignation of liability of the products themselves. It is unclear at this time how legislation in other states, notably Minnesota, which has banned smoked marijuana and will clearly be a market leader for this kind of regulatory model, will affect state-wide plans in Oregon on this front.

It is not that Oregon has not attempted to set up a regulated consumer market before. The problem appears to lie in the fact that there are few truly qualified labs in-state, a situation which creates huge liability for dispensaries. As a result, dispensaries face all the risk if not state prosecution if they accept testing results that are not accurate.

It was also Oregon not Minnesota, which led the nation in the discussion of packaging if not content of "edibles." Earlier this year, the state legislature tried to ban the sales of most sweet edibles only to reverse said decision less than a week later after receiving hundreds of outraged emails from patients across the state. It should be noted that savory edibles were an area not quite so controversial. Products like "infused" savory goods have so far received a pass from tighter regulation nationwide, particularly when it comes to packaging and Oregon has been no exception.

Given the bottleneck on dispensary approvals, if not local temporary bans, the issue of patient cultivation is clearly in the fore in Oregon although Hermes believes that this may follow a trend seen in other states.

"Patient cultivation is already prohibited in many of the recent state medical marijuana laws adopted in the last few years, so the trend is to force patients to obtain cannabis from a licensed storefront dispensary," he said.

Hermes also noted that in states that rely exclusively on dispensaries, medical marijuana is typically more expensive and more difficult to obtain due to proximity and a supply that can't meet the demand.

Per Hermes, it's too soon to tell how Oregon will implement its medical marijuana law and on all fronts, but it's encouraging to her at least that that the state legislature seems to recognize the need for patients to safely and legally obtain their medicine. "Regarding grows and community gardens, Oregon is fairly progressive compared to other states, allowing for patients to cultivate 24 plants."



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