On the Scene, Part II: Cannabis industry faces new regulatory pressures

Cannabis industry businesses weigh next steps in a new regulatory environment.

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Entrepreneurs who attended the annual Cannabis Collaborative Conference this Wednesday discussed survival tactics under Attorney General Jeff Sessions, who has ramped up regulation of the nascent industry. Members also learned they need to do a better job keeping product away from minors. 

IMG E0876The exhibit floor at the 2018 Cannabis Collaborative Conference

Jeff Sessions’ recent descision to rescind the Cole memo, an Obama-era directive prioritizing state cannabis policy, had many retailers and growers wringing their hands when the directive was first handed down. Since then, some businesses, along with the conference’s keynote speaker, Congressman Earl Blumenauer, have adopted a more positive outlook.

Everyone predicted the end of the Cole memo since the beginning of the Trump presidency, Blumenauer said. It’s better to get it out in the open so the industry can respond and move forward. 

“I was appalled by what Sessions did,” Blumenauer said, “but the more I reflected on it, I realized it might be in our favor.” 

IMG E0856Congressman Earl Blumenauer delivers the keynote address at the 2018 Cannabis Collaborative Conference

OLCC Director Steve Marks said that at the state level, the agency doesn’t plan to change any policies in response to the Sessions descision. But the commission will crack down on Oregon cannabis retailers selling to minors. Marks chided retailers for failing the OLCC’s minor decoy probes, in which the agency sends minors with real IDs into pot shops to try to buy weed.

In many cases, they succeed. 

IMG E0875An air filtration system for cannabis growers 

Although the lucrative illegal marketplace seems especially appealing these days, Marks and economist Beau Whitney urged conference attendees to avoid the temptation. Backsliding into the black market will only delegitamize the industry and harm long-term growth, they said. 

Oregon is currently producing more weed than in-state consumers can handle, but there’s still room for growth in the legal market. Data from point of sale systems, Director of BDS Analytics Liz Stahura said, shows that 30% of adults in Oregon consumed weed in the past six months, a far cry from the 80% for alcohol. The vast majority (70%) of consumers prefer to smoke or vape, and 24%, skewing toward older and female customers, prefer edibles. 

IMG E0874A high-tech extractor on display at the conference

Farmers can also withstand domestic industry pressures by exploring the international market, Whitney said. He sees Canada as one of the largest legitimate export opportunities.