OREGON CANNABIS – May 2, 2018 — It is time to allow the licensed transfer of cannabis between legal U.S. states. If Congress won’t move to protect such transfers immediately, then the states, in cooperation with their local U.S. attorneys, should move to allow them to happen anyway.

The legal cannabis industries on the west coast are in various stages of crisis. Crushing oversupply in some states and shortages in others are driving more product and more consumers into the illicit market. In California, where licensing of growers is taking longer than expected, retailers see rising prices and worry whether they’ll have product on their shelves this summer. Meanwhile, in Oregon and Washington, oversupply has left hundreds of licensed producers on the brink of insolvency.

Allowing the market to efficiently allocate resources among legal states would quickly and significantly reduce the size of the illicit market on the west coast and nationally by eliminating diversion, incentivizing licensure among illicit producers, and keeping consumers priced into the regulated market.

It will also save hundreds of small companies, thousands of jobs, and hundreds of millions in investment capital.

Over the past three weeks, President Trump announced his support for legislation protecting legal cannabis industries. Senate Minority Leader Chuck Schumer announced that he will sponsor legislation to de-schedule cannabis. Sen. Bernie Sanders became the third 2020 Democratic hopeful to co-sponsor Sen. Cory Booker’s Marijuana Justice Act. John Boehner, former Republican Speaker of the House, joined the board of a cannabis company, for which he will lobby. And a Quinnipiac University poll showed that 61 percent of voters in Texas of all placesnow support legalization.

Federal cannabis prohibition is dead. We simply await the final collapse of its staggering corpse. But there’s no guarantee how long that might take.

Oregon is the perfect place to grow cannabis, whether indoors or out. It has the right climate and soil, a strong renewable energy mix, plenty of water, and a cannabis growing culture that stretches back generations. But just a few short years into its regulatory framework, it is awash in world-class cannabis that cannot be sold. This year, Oregon growers have already stockpiled roughly three times as much legal cannabis as the state’s small (if intrepid) market can consume.

If Oregon could legally transfer product into California, which is suffering a temporary shortage due to slow licensing, or into Nevada, its oversupply problem would resolve in 90 days. Hundreds of local businesses would survive, saving thousands of jobs, and the looming takeover of Oregon’s locally-owned industry by deep-pocketed out of state and foreign companies – a long-term economic disaster for the state’s economy – could be averted. Many illegal growers would be incentivized to get licensed, abandoning the grey and illicit markets. And millions of Californians who would otherwise have been priced into the illegal market this summer would have access to clean, tested, legal, high quality cannabis at a reasonable price.

California growers have as much to gain by this as anyone. California stands to be a massive exporter of cannabis domestically and globally. They will dominate their home market, and most other markets as well. Allowing a little Oregon cannabis in to help smooth their launch now would set a precedent that could significantly shorten their wait time to access those markets.

In the wake of President Trump’s support for legislation to protect state cannabis industries, Congress should act to specifically shield licensed, interstate transfers from federal prosecution.

In the meantime, Gov. Kate Brown’s office should begin a conversation with U.S. Attorney Billy Williams, and, in the 2019 session, Oregon should pass legislation removing state prohibitions that prevent such transfers. This will send a message nationally that the time has come to end the market distortions inherent in the dying days of prohibition. And it will put the state in position to take advantage of that opportunity as soon as it presents itself, whether through Congressional action, or via negotiations between states and their local U.S. attorneys.

Short of ending federal prohibition, which could still take years, there is nothing we could do to more effectively reduce the size of illegal markets, while saving jobs and businesses and bolstering state and local economies. It’s an obvious fix, and its time has come.



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