As of Tuesday, November 11, 2014
GRANTS PASS — It will be nearly two years before Oregonians can drop by the corner marijuana store to pick up some bud for the weekend, but growers are already gearing up to meet the increased demand of the coming Green Rush.
Growers predict Portland and southwestern Oregon to continue to be the big pot-growing locales — with indoor-grown in Portland and outdoor-grown in southwestern Oregon, but they would not be surprised to see greenhouse growers established in The Dalles, where there is lots of sunshine and cheap electricity.
Measure 91, enacted by voters this week, will let people possess and grow their own marijuana starting in July 2015.
But the retail side doesn't start to kick in until January 2016. Oregon Liquor Control Board Chairman Rob Patridge says it will take months from then to issue licenses and grow the first legal crops that can be sold through retail outlets.
Medical marijuana grower Norris Monson in Portland plans to expand operations and expects competition from Colorado and California growers coming to Oregon to tap the new market.
Patridge will go to the Emergency Board of the Legislature in early December to ask for a budget to hire staff and pay for operations. He plans to spend the first three months of 2015 with the commission traveling around Oregon to listen to people in the marijuana industry, law enforcement, local government and citizens on what they would like to see in rules governing retail sales of recreational marijuana. The rules will govern how marijuana can be packaged and marketed.
A GREEN RUSH?
Portland medical marijuana grower Norris Monson of O.penVAPE has been hearing murmurings for some time of people securing warehouse space to grow marijuana in the Portland area. Southwestern Oregon medical marijuana grower Karen Sprague, CEO of The CO2 Company, has been looking for land to expand operations, and she knows others have been, too. They both expect Portland and southwestern Oregon to continue to be the big pot-growing locales — with indoor-grown in Portland and outdoor-grown in southwestern Oregon. They would not be surprised to see greenhouse growers established in the Columbia Gorge in The Dalles, where there is lots of sunshine and cheap electricity. Monson expects people with good business plans and experience will succeed, while those with get-rich-quick dreams will fail, because as the supply increases, prices and profit margins will fall.
the law unfolds
The Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act goes into effect Dec. 4, but implementation comes in three steps. On July 1, 2015, people can possess an ounce of pot in public and up to 8 ounces at home. They can grow up to four plants at home. On Jan. 4, 2016, the commission starts taking license applications. It is likely to take several months for them to be processed. Patridge said marijuana offered for retail sale will have to be grown from scratch once a license is secured, so there will be no offering stockpiled marijuana. With a three-month growing cycle, it will likely be sometime in the last half of 2016 before the first shops will be able to offer legal recreational marijuana for sale.
WHO CAN BUY?
Anyone 21 years or older.
Licenses will be issued for up to one year at a time for specific locations, and they will cover growing, processing, wholesaling and retail sales. Many growers plan to get all four, so they can control their supplies and markets. There is a non-refundable application fee of $250 for each one. The license costs $1,000. The commission can refuse to grant a license to anyone with a criminal record, not of good reputation and moral character, who has not maintained a sanitary establishment, or cannot understand the law. It can also refuse a license if it feels there are already enough pot providers to serve a specific area. Licenses are open to residents of other states, and investment can come from out of state. Cities and counties that want to keep out growers and retailers must get voter approval.
Measure 91 gives the state sole authority to tax marijuana, at a rate of $35 per ounce of bud, $10 per ounce of leaves, and $5 for each immature plant. The tax is levied once at the producer level. Cities and counties are barred from imposing their own taxes. But because so many cities and counties want to cash in, the issue may go to court or the Legislature.
State taxes will add $560 to the price of a pound of marijuana buds, but increased supply is likely to bring prices down. Medical marijuana in Oregon was selling for $2,000 to $2,400 a pound in August, but newly harvested outdoor-grown pot is selling for $1,200 to $1,600 a pound, driving down overall prices, Monson said. By contrast, Washington retail pot is selling for about $4,000 a pound, because it is taxed at a higher rate.
It is hard to know at this point. People have to pay the state $200 for a medical marijuana card and visit a doctor to authorize the card. Monson said that as recreational marijuana prices fall, the advantage to having a medical marijuana card may go up in smoke. Sprague said that medical marijuana companies are producing marijuana with compounds that have health benefits, but without THC that gets you high, and hope to market that through retail outlets as well as medical marijuana dispensaries.