On May 30th the OLCC issued a news release announcing a pause in the acceptance of new marijuana license applications. Steve Marks, Executive Director of the OLCC, stated “In order to ensure that the OLCC is fulfilling its regulatory duties and providing timely responses to businesses in the industry, we must focus on the current participants in the system and preserve for the Oregon Legislature its consideration of the necessity for further statutory controls on marijuana licensing in 2019”. For now, beginning June 15th, 2018, the OLCC will set aside any new marijuana license applications until it processes all outstanding applications and renewals in the que.
Many members of the Oregon Cannabis Community are welcoming this news while others are skeptical and believe that it is too little too late. Hopefully, the change will allow some breathing room for current OLCC licensees now suffering from freefalling wholesale market prices and an oversaturation of retail stores in some areas. Even with this pause, some say it won’t be enough. With 557 active retail licenses already issued and another 179 in the cue, in addition to 1008 active producer licenses issued with 950 more in the cue, the market appears to be headed for eventual disaster for many early Oregon licensees. Many cannabis licensees have invested their life savings in these businesses and the closing of many of them will mean a financial hit for Oregon. Jobs and retirement saving will be gone for many of these folks across the state.
Due to changes in Oregon law meant to quell black market activity and support small growers, up to 2000 OMMP smaller medical producers will also be able to sell on a limited basis into the OLCC system. Anthony Taylor of The Oregon Cannabis Commission believes the announcement is “long overdue, and will help the medical growers find a foothold in the industry”. Many believe that the focus of late has been too much on large out of state entities getting preferable legislation, and not enough on the Oregon businesses that have taken all the risk and pioneered the industry for the state’s coffers, only to risk going broke themselves. These Oregon licensees must be helped so that the industry is sound within Oregon for the coming national and international marketplace.
In addition, the much talked about overproduction of Oregon cannabis is a real problem, not only for licensees struggling to survive but also for elected officials across the state. Many cities and counties are concerned about the number of licenses as well as the concentration of licenses in some areas. The City of Eugene held a public hearing May 29th to consider placing a 1000 ft buffer between new retail marijuana stores. Many others are discussing similar ordinances.
The Oregon US Attorney, Billy Williams has warned the state about overproduction and has suggested repeatedly that the state of Oregon place a Moratorium on licensing. An unlimited number of licenses has already proven to be a serious problem within the state. These licenses should have been given out in a more measured and incremental pace, but we can’t go back in time to undo the damage caused by this saturation. We can only look forward to the 2019 Legislative session. Many are suggesting that the original language from Measure 91, and the original HB 3400 legislation regarding placing retail stores in areas with a public demand based on area and population, much like liquor stores, be reinstated into legislation. This would help tremendously with saturation at the retail level. Also, State Senator Floyd Prozanski is suggesting that interstate cannabis sales begin to take place. If legislation such as this were able to be passed, the oversupply problem could be dealt with in short order through legal channels. It may be an uphill climb, but would also help solidify Oregon’s position in the broader future marketplace. Adam Smith, of the newly organized Craft Cannabis Alliance, believes “the OLCC is doing it’s best with a limited set of tools and that the recent announcement from OLCC will not be a permanent cure for the oversupply problem”. His group is supporting Prozanski’s idea of opening the state borders to cannabis commerce.
One thing for sure is that there will be many people with differing viewpoints, all trying to solve the problem in the next Legislative session. Oregon as a state needs to harness the amazing opportunities that cannabis has brought. Supporting the industry on the ground within the state now will serve the purpose of solidifying a strong market for Oregon’s future success.
Margo Lucas is the owner of West Salem Cannabis and Cowgirl Cannabis. A believer in good communication and education, Lucas has advocated for the industry at city, county and state levels.