Tuesday, December 27, 2016

Over-regulation injuring Oregon cannabis industry

Are regulations crippling Oregon’s fledgling marijuana market? - Watchdog.org - John Crowe:

December 19, 2016 - "Oregon is rolling out its new recreational cannabis market, but pro-pot groups say state regulations are already choking producers and retailers.

"The regulations, implemented Oct. 1, mandate the most stringent pre-sale testing requirements of any regulated cannabis market in the United States. The rules, which apply to dispensaries, growers and anyone who transfers marijuana for ultimate sale to consumers, set guidelines for pot labeling, transferring, packaging, testing and concentration limits.

"Don Morse, owner of the Human Collective, a Portland dispensary, says his business has suffered from the new regulations. The company has laid off five employees since October and is struggling to maintain its supply of marijuana products.

“'We went from one set of tests that seemed to be effective, where no one got hurt, to where we are today where the shelves are empty,' said Morse, who also serves as director of the Oregon Cannabis Business Council, an industry trade group....

"There are currently only four pesticide accredited labs tasked with serving the state’s more than 400 retailers.... Of the cannabis product that has been tested, Morse claims between 40 percent and 60 percent has failed because the list of chemicals is so inclusive, and the minimum threshold so low, growers have been unable to comply....

"While Morse and other pro-legalization forces initially accepted the new regulations as a necessary step forward, others warned that the lack of accredited pesticide testing labs would cause a supply constraint. A report produced by Beau Whitney, owner of Whitney Economics, a consulting firm specializing in the cannabis market, confirmed the predictions of industry naysayers.

"Based on a survey of 683 cannabis business owners in Oregon, Whitney found that a lack of accredited labs has created a production bottleneck. The decrease in available product subsequently has led to higher prices, a loss of tax revenue and a resurgence of the black market....

"Whitney projects a loss of $10 million in tax revenue for the fourth quarter relative to the average for the previous three quarters. In addition, he found that 22 percent of respondents said they were going out of business, and a majority of businesses said they would be forced to lay off employees. The report also estimates black market consumption will increase $187.5 million on an annualized basis due to higher prices and lower supply."

Read more: http://watchdog.org/284098/regulations-crippling-oregon-fledgling-marijuana-market/
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