Interstate Cannabis Commerce? Oregon’s Readying For It

Despite the fact that cannabis legalized in California, interstate sales are almost sure to land you in handcuffs. Federal law prohibits any form of cultivation or retail sales. Officials with the U.S. Department of Justice have largely agreed to look the other way since The Cole Memo, so long as the cannabis commerce in question strictly adheres to state law. The memo says nothing about interstate sales and distribution, which some states expressly prohibit. Nonetheless, our Los Angeles marijuana business lawyers understand Oregon lawmakers appear to be hedging their bets in anticipation of federal marijuana legalization.

State senators are crafting a bill that would permit cannabis exports to other states in the U.S. as of 2021.

Oregon’s Legal Cannabis Market Strain Fuels Push for Trade Beyond State Borders

There are a few different issues at play, primary among those being the glut of supply that has fueled the black market.  Last year, state lawmakers fought hard to enact SB 1042, which would have given the green light to cannabis and ancillary businesses vetted by the state to the right to export cannabis grown in Oregon. Of course, absent a change in federal law, any companies exporting the drug would face serious repercussions under existing provisions of U.S. law, namely drug trafficking. As marijuana is still considered a Schedule I narcotic, and trafficking across state lines could have serious implications for your assets and your freedom.

But Los Angeles cannabis lawyers know many marijuana advocates consider it a matter of time before the federal government Oks legal sales. Oregon cannabis businesses want to be on the forefront.

In terms of public opinion with the power to say federal authorities, few could argue Oregon has the right idea. Nearly 65 percent of Americans are supportive of recreational marijuana legalization, according to Gallup. Beyond that and similar to California, the marijuana supply cultivated in Oregon is far in excess of local demand. As it stands, the state reportedly has an oversupply of approximately 1.4 million pounds of the plant, causing wholesale pot prices to plummet (flower rates dropped from $3.90 per gram in Q1 2018 and fell to $1.86 by Q3), jeopardizing the financial stability of scores of Oregon’s licensed marijuana businesses. This appears to be what’s largely driving swelling intestate sales support from state lawmakers and opinion-based media.

Why Intestate Cannabis Trade is a Huge Legal Risk

The giant roadblock, of course, is Section 801 of the U.S. Controlled Substances Act, which still – despite recreational legalization in 10 states and medicinal legalization in 33 states – classifies the drug as Schedule I, among the most addictive, dangerous and with no therapeutic purpose. Federal  law expressly prohibits sales of marijuana between states and to markets overseas. Additional federal guidance from the 2013 Cole Memo also states marijuana can’t be sold between states – even when both have legalized the drug.

What all that means is if Oregon – or California or any other state – decided approve cannabis trade across states, they’d be risking a federal crackdown. Some fear it would further compromise the tenuous agreement outlined in the Cole Memo that encourages federal prosecutors to essentially look the other way when it comes to state-legal marijuana operations. (The Cole Memo is not law, and could be revoked at any time.)

On the flip side, proponents say passing a bill like this would put Oregon could be placing itself a step ahead of the game by passing this measure now if the federal government does shift its position on legal marijuana. Our Los Angeles marijuana business lawyers would point out, however, this is a big gamble.