Oregon Marijuana Business Shifts From Medical to Recreational

Marijuana business in Colorado is seeing a major shift with the passage this month of a measure that halts sales of recreational marijuana at medical marijuana dispensaries. 

There is widespread understanding by those operating medical dispensaries that with the law allowing recreational use in place, they are not going to be able to survive peddling medical pot alone. Now that recreational marijuana dispensaries can sell to anyone over the age of 21, there is little incentive for consumers – or dispensaries – to go through the additional bureaucracy that medicinal marijuana requires – except in case where patients are under the age of 21. That could mean those patients will have a tougher time finding specialized strains or compounds.

The new regulation also comes with a provision that allows consumers to purchase more of the plant and pay lower sales taxes on it. However, at least for the next few months, they may find they have fewer venues from which to buy. That’s because dispensaries will be actively making the shift from medicinal operation to recreational sales. 

Oregon has about 300 marijuana dispensaries currently, but it’s expected that number is going to fall this year as medical-only shops either make the switch to recreational or drop out of it all together.

Meanwhile, sales at some existing recreational marijuana dispensary sites is booming. At one location in Portland, a dispensary owner who solely distributes the drug to recreational buyers reported his sales shot up by 20 percent in a single week after the new regulation went into effect. Many of those new customers are reportedly individuals who previously used to patronize nearby medical marijuana dispensaries that are now without the proper licensing through the Oregon Liquor Control Commission.

The state has thus far gotten about 70 requests from dispensary owners who have cited their intention to drop out of the medical marijuana system. It’s expected most of those are going to transfer into recreational sales.

Portland has its own licensing for cannabis companies, with 41 recreational pot shops currently operational. Retail licenses are pending for another 17 locations and 32 others have been approved but haven’t yet gotten the final sign-off from state officials.

It’s estimated that ultimately there will be about 400 recreational marijuana dispensaries across the state, which has prompted vocal concerns about market saturation. Specifically, if the supply exceeds the demand, the worry is that the product will then seep into the underground market.

Recent inspections of the medical marijuana suppliers, though, doesn’t seem to indicate there has been any major breach of regulation. The state health authority, which is in charge of marijuana dispensary inspections, recently deployed five inspectors across the state, anticipating high rates of non-compliance. However, what they discovered was that of the 46 places inspected, only one had any type of violation. In that case, a  civil penalty is pending. Serious violations of state regulations could result not only in fines but also loss of a facility’s registration. All medical marijuana dispensaries are expected to be audited by the end of the month to make sure they aren’t breaching the threshold into recreational sales without proper licensing.

Even though marijuana is much easier to get in Oregon than ever, the concern is that medical marijuana will be tougher to obtain, and that could be a problem for people who depend on it. Medical marijuana patients are allowed to shop tax-free at recreational stores, but they can no longer necessarily expect low cost product. This too leads to concern that there will be an opening for the illicit market.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Big change: Medical marijuana dispensaries no longer selling rec pot, Jan. 9, 2017, By Noelle Crombie, The Oregonian

More Blog Entries:

Marijuana Industry Poised to Generate Many New Jobs, Jan. 4, 2017, Portland Marijuana Lawyer Blog