The Business of Legal Marijuana in Oregon. What Now?

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According to the November 6, 2014 edition of TIME magazine, almost $200 million was spent on TV ads targeting ballot initiatives across the U.S. These ads were designed to “inform the electorate” on the 158 state ballot measures in the November 2014 election. In Oregon, supporters of Measure 91 spent several million on TV ads, while opponents spent substantially less. A national post-election analysis of TV ad spending and ballot initiative outcomes revealed that those groups who won the television ad blitz battle, also won the war at the ballot box.

We’ll soon see how Oregon voter’s recent passage of Measure 91 impacts behavior. A post-election review of “Now What?” regarding Oregon’s Measure 91 is filled with misunderstanding, misinformation, uncertainty, knowns and unknowns. A quote from former U.S. Secretary of Defense Donald Rumsfeld uttered on February 12, 2002 (regarding the war in Iraq), succinctly characterizes the current state of Oregon’s Measure 91:

“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.”

Known Knowns

• Measure 91 passed with statewide voter approval totals of 56 percent. In Deschutes County, the voter totals were 51.5 percent for and 48.5 percent against.

• The public consumption of cannabis products is not allowed under Measure 91 (meaning that you cannot smoke cannabis products legally in public just like alcohol).

• Measure 91 directs the Oregon Liquor Control Commission (OLCC) to create and enforce the regulatory framework encompassing the activities of marijuana retailers, cultivators, processors, wholesalers and testing labs. The OLCC has until January 1, 2016 to roll out the regulatory environment. Effective January 4, 2016, the OLCC will begin accepting business license applications for marijuana product retailers, producers and wholesalers. Sometime within the first quarter of 2016, cannabis businesses can be duly licensed and operational, under the ongoing oversight of the OLCC.

• The elements of Measure 91 that legalize the use of cannabis don’t take effect until July 1, 2015. Until then, Oregon’s current criminal statutes remain in effect (possession of less than one ounce of cannabis is still a misdemeanor punishable by a monetary fine up to $650).

• Oregon’s current medical marijuana laws remain unchanged – until Measure 91 goes into effect.

• Homemade cannabis extracts (also known as shatter, wax etc. – typically produced with solvents) are illegal under Measure 91: You cannot produce, process, keep, or store homemade marijuana extracts where the use of solvents are required.

• Adults (21 and older), may possess these amounts of cannabis, effective July 15, 2015: 1 ounce of cannabis extracts (that is not homemade with the use of a solvent), 72 ounces of liquid forms of cannabis infused products (typically beverages), 8 ounces (half pound) of cannabis flowers, 1 ounce in public; 16 ounces of a variety of solid cannabis products.

• Oregon adults over age 21 may choose to grow up to 4 marijuana plants for their personal use — although the plants may not be visible from a public space.

• The production of hemp seed and industrial hemp becomes legal under measure 91.

• The limits on cultivation of 4 cannabis plants is a per household limitation. For example, if a household includes say, three individuals over the age of 21 (either related or unrelated), the cultivation limits dictate only 4 plants per household.

Known Unknowns

• Many Oregon jurisdictions have passed moratoriums for licensing medical marijuana dispensaries within their jurisdictions. Most of the moratoriums have a sundown date of May 2015. What these cities will do is a known unknown.

• Dozens of Oregon cities have passed some form of marijuana sales tax that will go into effect when the legal production, distribution, sales and use of cannabis products begin. Measure 91 contains language that prohibits any entity other than the State of Oregon from imposing a tax on state regulated cannabis products. Will these sales tax ordinances be deemed legal? Another known unknown.

• Should Oregon jurisdictions who have/will ban either medical marijuana dispensaries and/or cannabis dispensaries who will sell products for recreational use (or both) – enjoy the benefits of tax revenue collected by the State under Measure 91? Yet another known unknown.

Unknown Unknowns

• Will more employers in Oregon begin to institute random drug testing? Will those employers who currently test employees/applicants for cannabis use implement exemptions for those who test positive for the same?

• What will be the number of applicants/employees who may be disqualified/dismissed due to employer administered drug tests, where there are positive results for the use of cannabis products? Will the current Oregon employer right to test employees and applicants be amended, as it relates to marijuana use?

• Will there be a rise in the number of users of cannabis products in Oregon?

• Is the Oregon Liquor Control Commission prepared for this expansion of their regulatory responsibility?

• Will the current rules and fees for obtaining and renewing a State of Oregon medical marijuana user card be revised?

• Will there be a limit on the size of legal marijuana production facilities in the State of Oregon? Will Oregon farmers turn from hay to hemp and hemp seed production?

• How many new businesses will the regulated marijuana industry in Oregon employ?

• How will DUII arrests and convictions be affected?

• What will be the impacts on those under age 21?

• Will the price of legal marijuana in Oregon be competitive with that of the black market?

• How much will the cost to the criminal justice and mental health systems in Oregon be impacted?

• Will the drug cartels be negatively impacted when Measure 91 goes into effect in Oregon?

• What will the cost to the State of Oregon be when this all shakes out?

• How will law enforcement resources be reallocated?

• Will the actual tax revenues generated by this change cover the costs?

There’s one thing we actually know at this time: Rumsfeld was right! Measure 91 contains known knowns, known unknowns, and unknown unknowns.

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Bill Dahl is a freelance writer, management consultant and award-winning photographer. He lives in Redmond with his best friend (wife), their rescued Greyhound Jasper, and Bill's Black Lab, Reggie - who accompanies Bill everywhere.

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