CannabisNews420.com – Cannabis/Marijuana Industry News
The Oregon legislature has been grappling with cannabis for five consecutive years. Talking with those in Salem trenches, one senses some fatigue. At this point, over a month into the 2019 session, a preponderance of legislators appear vaguely inclined to “let it ride” and drop the big ideas when it comes to cannabis. This means we are unlikely to see a full-scale merger of the medical and recreational cannabis programs in 2019 (too bad), and that most of the legislation will be maintenance oriented and reactive.
How did we get here? When Oregon representatives first met in 2015 to codify Measure 91, there was tremendous buzz. The Joint Committee on Marijuana Regulation was convened, and for three consecutive sessions (two long ones and a shorty) Oregon passed bill after bill (after bill) to stage and shepherd its cannabis programs. Following the 2017 session, however, the Joint Committee was dissolved, on the inclination that Salem would start treating cannabis more like a standard policy issue. The 2018 short session therefore saw comparatively limited action, consisting principally of a non-emergency gut-and-stuff marijuana bill, and an omnibus hemp bill to build out that program.
Today, we are aware of just two marijuana lobbyists in Salem, down from 25 or so in 2015, and a dozen or more just two years ago. Some of the trade groups have gone quiet or faded away entirely. Fortunately, legislators like Floyd Prozanski, Ken Helm and Julie Fahey remain with their extensive experience on cannabis policy, and Governor Kate Brown is still here to sign all the bills (she has never vetoed a cannabis bill). All in all, though, there is less energy and probably less expertise for this stuff than before.
Still, industry watchers should still expect a few noteworthy developments in the coming months, after committee work is done. Some of these laws will arise out of necessity (such as to accommodate the 2018 Farm Bill). Some may be out of near necessity (such as addressing oversupply in the OLCC system). And anything else would be either housekeeping or progressive new laws, like a social consumption framework, or protecting employees for off-work consumption.
Today, there is are 22 or so early-session bills on any number of cannabis issues, kicking around committee. It’s probably not worth getting too granular or even excited about the bills before crossover day, which is the date at which bills die if they haven’t moved out of their respective committees of origin to the floor (or to another procedural or joint committee). Legislation that crosses over and passes into law will likely look different—perhaps drastically so—than currently drafted. Crossover day happens in a couple of weeks.
Given the foregoing, this blog post is not going to examine the draft bills in detail (if you’re interested in doing that yourself, they are available here). Instead, I’m going to outline a few topics getting some discussion, and a few others with a shot at clearing committee and becoming actual laws.
Hemp. There’s almost nothing filed on hemp right now. The sole, skinny bill is HB 2740, a placeholder establishing an Oregon Industrial Hemp Commission and not much more. Rest assured, though: there will be more. Oregon must shape its hemp program for certification to the federal Department of Agriculture as per the 2018 Farm Bill, which will take some preparation by the legislature to ensure that Congressional guidelines for hemp economy states are met. Drafting is happening as we speak, and we expect a fuller hemp bill to pass this session.
Limits on Marijuana Production. There is too much marijuana in Oregon, inside and outside of the state-sanctioned systems. This was the finding of the Oregon State Police Report, the HIDTA Report, the recent Secretary of State Audit, the recent OLCC Report to the Legislature and probably anyone who has spent a little time on the back roads of Jackson or Josephine County.
In a recent blog post, I mentioned that Governor Brown recently weighed in on this vexing issue, requesting a pre-session filing of Senate Bill 218, which would allow the OLCC to refuse to issue marijuana production licenses “based on market demand and other relevant factors.” This would give legislative backing to the slow-walk OLCC already has commenced on license curtailment. Will the Governor’s skeletal proposal stick as written? It seems unlikely. The big consideration here is how (and not “if”) the legislature will protect those who have already invested resources into an application. OLCC may also push back on the Governor’s approach, and request that the legislature take care of any moratorium itself, rather than delegate this problematic task. All in all, though, the smart money says a cap on production is coming. The theory is that processors, wholesalers and retailers are already self-sorting in the free market, but production needs guardrails. Cut off the head of the snake.
Social Consumption. Every year, we see social consumption bills. Every year they fail. Typically, these bills are overbroad in that they seek to legalize cannabis cafes and indoor smoking lounges, which would require an exemption to the Oregon Clean Indoor Air Act (that law is slowly phasing out a few grandfathered cigar bars and smoke shops). Do Oregonians want to return to the days where employees and others sit in rooms filled with haze and smoke? Although there are compelling arguments to be made in support of populations who live in Section 8 housing, tourists, etc. (some of which were made in yesterday morning’s hearing), we don’t see it happening. This means the two bills on tap, SB 639 and HB 2233, probably need excision of the lounge licensing concept if they are to advance. Permits for temporary (outdoor) events, on the other hand, might have legs as long as alcohol isn’t present. The public tours for cannabis businesses contained in both bills could definitely work. All in all, chances are probably 50-50 that some version of one of these bills passes.
Local Grow Tax. You can find this concept enshrined in HB 2382, which would allow for county taxation on both recreational and medical production, based on canopy size. This bill is a natural extension of the Southern Oregon Marijuana Initiative, a logic model produced by the estimable Rob Bovett at the Association of Oregon Counties. It is probably dead as written: industry will step on this hard. This means that additional tax revenues to counties would need need to come through reallocation, which means that the Joint Committee on Ways and Means must be convinced to move $30 million or so from the General Fund to various localities. Not happening.
Interstate Compact. Kudos to Adam Smith and the Craft Cannabis Alliance for pushing the exchange idea so hard for so long. But are we going to see licensed marijuana export anytime soon? Probably not. The legislature could start down the path, though, by adopting suggestions and language from this issue’s work group, which seems to have traction. If we get legislation, it will likely be a gut and stuff of Prozanski’s pre-session filed SB 582. There are two big questions here. The first is the scope of whom is allowed to export and import, with possible consensus consolidating around “almost everyone”– licensed producers, processors, wholesalers and retailers. Another big question is: what will the “trigger” look like, allowing these sales to commence. For example, will sales be allowed if and when Congress re- or deschedules? Or when we get another federal tolerance memo? Technically, Governor Brown could enter into an interstate compact at any time, but if sales commenced before the federal door opened significantly, Billy Williams has pledged to shut it down. This means that any bill we get on export will be to tee things up and nothing more
Off-Work Use. This should have happened already. Let’s hope Oregon gets it right in 2019, so that cannabis consumers are treated like alcohol consumers, and patients have access to medicine without fear of job loss. The hope is that HB 2655 crosses over and the legislature looks at reasonable carve-outs for safety and employers reliant on federal grants. It needs to get done.
We will keep you posted with insights and developments on the current session as things move ahead. Until then, if you’re interested in learning how we got here, below is an archive of “round up” posts on the Oregon marijuana legislation going back to 2015.
- Oregon’s New Marijuana Laws: The Last Word on the 2015 Legislative Session
- Oregon Opens Its Cannabis Industry to Non-Residents (2016)
- Oregon Marijuana: The Banking Bill (2016)
- Oregon Cannabis: The Merger of Recreational and Medical Has Begun (2016)
- Oregon Marijuana: Many More Changes with the Christmas Tree Bill (2016)
- Oregon’s 2017 Cannabis Laws: The Definitive List
- Oregon’s New 2018 Cannabis Laws