On Feb. 2, the U.S. Attorney for Oregon, Billy "Stop calling me Lando" Williams held a "Marijuana Summit" and invited Gov. Kate Brown, law enforcement, the Internal Revenue Service, regulatory agencies and industry professionals to attend. (The press wasn't allowed, because fake news, or democracy thrives in darkness, or something.) Major props to Williams for holding it and inviting representation from the cannabis industry. It wasn't that long ago that such invites simply didn't happen, and it should be applauded.
Williams had called for the summit in an op-ed piece in the Oregonian, in which he addressed the rescinding of the Cole memorandum by Sessions, and ominously declared, "The move gives U.S. Attorneys wide latitude to develop district-specific strategies and deploy department resources without Washington, D.C. artificially declaring some cases off limits." (Rut ro...)
He went on to list some numbers supporting his argument that we have a "massive marijuana overproduction problem" (he's right, we do—more on that in a second) which results in crime, cartels, diversion to other states, etc. He concluded:
"I have significant concerns about the state's current regulatory framework and the resources allocated to policing marijuana in Oregon."
Southern Oregon is getting the most attention, not only for its prolific production but because a number of people in that part of the state aren't thrilled with legalization and the perceived impact it has had, or the lack of resources allocated to enforcing regulation. Williams says he wants more data to understand the unregulated marketplace and diversion, and based on statements made in his op-ed announcement, that will include the as-yet unreleased report from the Oregon State Police. Your friendly local dispensary isn't looking at having its doors kicked in and assets seized, probably, but producers down south are going to get the most scrutiny and possibly action.
About that oversupply thing: Does Oregon grow more cannabis than its citizens consume? Yes. That's been the case for decades. But the Oregon Liquor Control Commission currently does not have a cap on licenses to be issued to growers (producers). And as of Feb. 13, there were 920 active producers, 12 approved but not paid, 567 assigned and 353 ready for assignment. That's 1,852 commercial producers, not taking into account the four plants each Oregon resident of age may grow, or the 12 plants each medical patient can grow.
Putting aside his comments about crime and cartels (although crime is down, and cartels are a boogeyman), the overproduction issue could be addressed on a variety of fronts.
The first, and seemingly least likely to happen under our current administration, is rescheduling cannabis from its present standing as Schedule 1. Make it what it truly is—an agricultural product—and allow interstate commerce. There are many states receiving our surplus from which we could be collecting tax revenue on sales, not to mention the family wage jobs it would create. You can buy Oregon wine and beer most anywhere in the U.S.; let's make it the same for flower and the products it begets.
Stepping up enforcement efforts to reduce diversion costs money, so there exists the possibility of a new tax to fund such efforts. Allocating existing OLCC/Oregon Health Authority revenue to pay for this would be a better call than new taxes. There's already a heavy tax and fee burden placed upon the industry, slimming or eliminating profit margins. That can drive good people to consider bad choices regarding excess inventory.
We could also allow dispensaries to open in "dry counties," and thus create channels for product to reach new consumers.
It makes more sense to shape the response to overproduction by working on solutions that embrace the overwhelming positive aspects that a regulated cannabis industry provides, instead of falling back upon decades-old failed policies of enforcement that penalize, destroy and incarcerate, including disproportionately targeting of people of color. That never worked, and never will. Time for a new plan.
Yesterday the Oregon Cannabis Association was invited to participate in, and present at, the United States Attorney's Cannabis Summit. With a broad range of law enforcement (DEA, FBI, Port of Portland, IRS, District Attorneys and many others) along with United States Attorneys from across the west coast, the Governor's office, Association of Cities and Counties, OLCC, OHA and other stakeholders, this all-day meeting was the first of its kind. Conceived of, and led by United States Attorney Billy Williams in response to the rescinding of the Cole Memorandum, the meeting appeared to be a step in the right direction toward collaboration in addressing how to approach cannabis regulation and enforcement under the Trump administration. This could have looked a lot different with no seats at the table for the cannabis industry.
The OCA's presentation focused almost entirely on the benefits of cannabis legalization, including jobs, tax revenue, decreased crime and the positive impact legalization has had on the opioid epidemic. Our presentation also acknowledged that the OLCC and OHA both need additional funding, which we will support at the Legislature, and that local governments are continuing to struggle with regulation. We also recognized that there is overproduction in all markets leading to price and market pressure which may result in diversion of product, although that should not be a forgone conclusion. The OCA repeatedly urged the room full of law enforcement to focus on funding agencies and local governments as well as administrative action, instead of charging people with crimes—a vote for 91 was a vote to end the war on drugs as it relates to cannabis. Additionally, we pushed for banking reform and reminded all participants that the way to end concerns over diversion and an illegal market is to end federal prohibition.
Here are our significant takeaways:
United States Attorney Billy Williams does not appear to be inclined to shut down the regulated market but is extremely interested in ensuring that participants in both the OLCC and OHA programs follow the law.
Rural Oregon, which had a large group of both elected and citizen representatives present- Josephine, Jackson, Deschutes included- are extremely frustrated with what they perceive as the negative impacts of cannabis legalization and the lack of enforcement support they have.
Southern Oregon is being carefully watched as a source for diversion and the OLCC and federal and state law enforcement have established a new task force to address this issue.
Mr. Williams strongly believes that there is over-production in all markets- OLCC, OHA and the unregulated market- and that the Legislature and the agencies need to address this promptly. There were also a number of concerns around tracking and whether it was sufficient under both OLCC and OHA- particularly as it relates to destruction of product under OLCC and inspections under OHA.
It is also extremely clear that federal and state law enforcement believes that cannabis poses a public safety threat and that legalization has not curbed "cartels" and other violent crime associated with cannabis (contrary to evidence we presented). It is also clear that there are only so many resources to address unlawful cannabis activity in comparison to other more serious threats.
While the tribes were present, there were almost no people of color at the table even though they are historically and disproportionately impacted by the war on drugs. We are hopeful that the next summit will have more people of color participating.