Oregon Passes First-of-Its-Kind Cannabis Export Legislation

This article was originally posted on June 26. It has been updated.

Marijuana may still be illegal at the federal level, but Oregon lawmakers are preparing for the time when that finally changes. Can weed join other Oregon exports like hoppy beer, gourmet coffee and the hipster lifestyle? State leaders are ready to find out.

Senate Bill 582, signed into law by Governor Kate Brown on June 20, “Authorizes (the) Governor to enter into agreement with another state for purposes of cross-jurisdictional coordination and enforcement of marijuana-related businesses and cross-jurisdictional delivery of marijuana items.”

This is the first such legislation in the nation, but the idea has been brewing in Oregon for some time. One of the bill’s chief sponsors, State Senator Floyd Prozanski, told Freedom Leaf last September:

“In 2017, my Senate Bill 1042, which passed out of the Senate Judiciary Committee that I chair, was going to give the governor what I call a tool in her toolbox to be able to enter into compacts with adjacent, adjoining states that had marijuana programs, either or both medical and recreational, and allow for the flow of cannabis products across state lines. I believe that the quality and the strains we produce in the medical arena would be in high demand for patients and individuals in the adjacent states.”

Oregon’s legislature has a long session in odd-numbered years during which they deal with all manner of bills, and a short session in even-numbered years during which they can only focus on  legislation that directly relates to revenue, so Prozanski had to wait until this year’s session to reintroduce the measure as Senate Bill 582.

The Oregon Cannabis Surplus

Oregon was already a net weed exporter when voters approved the legalization of adult use of marijuana in 2014. That had been true since at least the 1980s when NORML estimated the value of Oregon’s marijuana crop had surpassed $1 billion.

The state is producing more weed way faster than locals can buy and consume it. According to the Oregon Liquor Control Commission’s “2019 Recreational Marijuana Supply and Demand Legislative Report,” dated January:

“Supply in the recreational market is twice the level of current demand… This disequilibrium between supply and demand has contributed to growing levels of licensees’ inventory. As of January 1, 2019, the recreational market has an estimated 6.5 years’ worth of theoretical supply on hand. Even under assumptions of growth in demand caused by more Oregonians consuming more marijuana, supply will almost certainly continue to exceed demand at current levels of production.”

A total of 4.6 million pounds was produced in 2018. This surplus has led to plummeting wholesale and retail prices, from $10 a gram in 2017 to $5 a gram in 2018. That number has continued to fall with reports of $2 grams, which adds up to $50 ounces.

The Oregon Liquor Control Commission says: “Supply will almost certainly continue to exceed demand at current levels of production.”

Legal agriculture is also big in Oregon. The state ranks 28th in the nation for all commodities with a total of nearly $4.2 billion in cash receipts in 2017 (excluding cannabis). Most of Oregon’s agricultural output – again, excluding cannabis – is sent out of state, says the Oregon Farm Bureau, with about 40% going overseas and 40% staying inside the US. The rest is consumed within the state’s borders.

Oregon is already a major grass (not the weedy kind) exporter: The Farm Bureau says the state is the number one producer of ryegrass seed and orchard grass seed in the nation. Oregon is also number two in the nation for production of hops, which is not the only reason beer is so popular in the state, yet worth noting.

Congress Members Call for Interstate Canna-Commerce

On June 27, Sen. Ron Wyden and Rep. Earl Blumenauer, both Oregon Democrats, introduced the State Cannabis Commerce Act in Congress.

The measure would “permanently protect all state cannabis programs from federal interference and allow for interstate cannabis commerce between states like Oregon with legal cannabis programs.”

Blumenauer stated: “Last week, the House agreed and passed my amendments to forbid the federal government from interfering with cannabis programs in the states, D.C. and tribal communities. This week, we are turning to a top priority for Oregonians – allowing for interstate sale of cannabis. It’s past time we protect the states, like Oregon, that have gotten it right.”

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Earlier This Year, We Advised: What to Do About Surpluses and Shortages

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And BTW: Jim Belushi Has a Cannabis Business in Oregon