The Oregon capitol buldingThe Oregon Liquor Control Commission (OLCC) dramatically reduced the daily purchase limit for medical marijuana patients in late August in an effort to stem illicit flows of medical cannabis onto the black markets.

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According to the OLCC news release, due to suspicious activity detected in the state’s Cannabis Tracking System (CTS), licensed medical marijuana retailers are now only permitted to sell one ounce of flower per patient each day — instead of the previously recognized limit 24-ounce daily limit.

Before medical marijuana patients start packing their bags to look for greener pastures, it’s important to note that the rule expires in six months and could be modified or taken down after the investigations are completed — although OLCC spokesman Mark Pettinger told The Bulletin that “probable path is us making a permanent rule change.”

Who Does This Law Actually Affect?

Medical MarijuanaAlthough a few medical marijuana users may find themselves affected, most people do not go to the store trying to buy 1.5 lbs of cannabis at a time. Considering that 95 percent medical marijuana patients purchase less than two ounces per week, the rule is unlikely to have widespread impacts on the average Oregon cardholder.

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However, Kevin McMahon, a budtender at Substance marijuana retail shop who is also a medical cardholder, told the Bulletin that his medical marijuana retail shop may be affected because his patients travel long distances from areas of the state where sales are not permitted to stock up on medicine.

“Whenever they’re picking it up, it’s for months at a time,” said McMahon. “Bend is such a hub. There’s a lot of people we have from Christmas Valley, Crescent, Prineville.”

Overproduction of Cannabis in Oregon

While Oregon voted in 2014 to legalize recreational marijuana sales, the state was one of the first in the country to allow for the use of cannabis for medical purposes since 1998. Oregon has approximately 417,000 active cannabis users — roughly 10% the state’s population.

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Earlier this year, an Oregon law enforcement report claimed nearly 70 percent of the legally produced marijuana is not being consumed within the state. The study released by Oregon-Idaho High Intensity Drug Trafficking Area (HIDTA) found that the state produces over 911,000 kilos per year, which far outstrips the consumer demand that stands between 84,400 to 169,000 kilos.

The Oregon-Idaho HIDTA “counter-drug” program was established by the White House Office of National Drug Control Policy in June of 1999 in an effort to identify, disrupt and dismantle drug trafficking and money laundering organizations in 14 counties and the Warm Springs Indian Reservation.

Josh Jardine writing in the Portland Mercury criticized the OR-ID HIDTA report, which he said is federally funded through the DEA, and administered by the Office of National Drug Control Policy.

“This is a biased, inaccurate report, produced by agencies with an outdated prohibitionist outlook,” said Jardine. “Its flawed findings could be used to justify federal intervention."

As a result of an oversupply glut, consumer marijuana prices in Oregon — and other regions of the country — have plummeted. The state's Office of Economic Analysis released a study that found the retail cost of a gram of marijuana fell from $14 in 2015 when recreational marijuana was legalized to only $7 in 2017. According to HIDTA, the counties that are most heavily engaged in cannabis cultivation are impoverished and face a serious economic risk from the collapse of cannabis prices.

Farmers and The Black Market

Cannabis farmer potting new plantThe Rolling Stone recently featured an article exposing the hardships facing growers across the country who are hanging onto nearly one million pounds of useless product. This is leading growers to make challenging decisions whether to leave the business or fight to stay above water.

The legal method for dealing with excess weed before it goes bad is to destroy and dispose of it. In March 2017, growers destroyed about 3,367 pounds of usable marijuana, according to the state tracking system. In March of 2018, growers destroyed 13,976 pounds.

In February, federal law enforcement released a report that claimed a large percent of Oregon marijuana was making its way to out-of-state black markets in other parts of the country. U.S. Attorney Billy Williams said the state had an "overproduction" problem and that law enforcement of overproduction, interstate trafficking, organized crime would be prioritized.

“What is often lost in this discussion is the link between marijuana and serious, interstate criminal activity. Overproduction is rampant, and the illegal transport of product out-of-state — a violation of both state and federal law — continues unchecked,” said Billy Williams, U.S. Attorney for Oregon to the North Bay Business Journal.

A Medical Market on Decline

According to an article published in The Guardian, Oregon’s medical marijuana market has been on a downward spiral since the state legalized cannabis for recreational use in 2014. As nine bills were passed that expanded consumer access to marijuana, the regulatory procedures for growing, processing and packaging were changed with significant impact on the medical marijuana industry.

Since 2016, recreational marijuana has become a million-dollar industry, while the previously prevalent patient-grower network that used to make up the medical program has largely disappeared.

“The Canadian companies hold onto their war chests that allow them to undercut the competition, and with small-time growers falling as fodder to law enforcement, I’m really concerned about what’s going to happen to the industry here after this next harvesting season.”

The Oregon Medical Marijuana Program (OMMP) regulatory problems were covered in a May report by the Oregon Health Authority. The report found that “insufficient funding and staffing” were keeping the regulators from accurately keeping track of medical marijuana production and grow sites.

The reports said that the medical marijuana program was “implementing comprehensive reporting regime of the seed-to-sale” through the CTS program. The CTS was recently used to tip regulators to irregularities that prompted the lower purchasing limits for medical marijuana users.

Who Will Benefit From Purchasing Limits?

While it remains to be seen whether the new purchasing limits will help address transfers of medical marijuana to out-of-state black markets, the Guardian painted a dismal picture for the medical marijuana industry going forward: “ At the height of the medical marijuana industry in 2016, there were 420 dispensaries in Oregon available to medical cardholders. Today, only eight are left standing.”

Oregon NORML board member and journalist Angela Bacca told The Stash that the decision to limit marijuana purchases was part of a federal crackdown on marijuana that will ultimately benefit multinational companies based in Canada.

Bacca explained that before recreational marijuana was legalized in Oregon, growers had supplied marijuana demand in other states. According to Bacca, the supply glut combined with the legal actions, such as the purchasing limit, aimed at stopping the flow of marijuana into other states will ultimately hurt small-time growers and could push them out of business.

“The Canadian companies hold onto their war chests that allow them to undercut the competition, and with small-time growers falling as fodder to law enforcement, I’m really concerned about what’s going to happen to the industry here after this next harvesting season.”