November 28, 2016

Medical vs. Recreational Cannabis Sales: Transition in Oregon

November 28, 2016
cannabis sales, oregon, marijuana

Many cannabis industry professionals are a little frazzled by the transition and recent rules rolling out as part of Measure 91. In fact, my friend and colleague Joshua Jardine just explained one of the biggest hurdles the industry is facing in an article he posted last week.

Randa Shahin, owner/operator at Homegrown Apothecary in Portland, cited some positives such as lower taxes for customers and the ease of using the new state regulated seed-to-sale tracking system, Metrc.  Also, she mentioned, “Customers love being able to buy more than one edible at a time and appreciate the higher potency levels.  This has definitely helped our business grow.” However, she is conflicted over the difficulty she has in being able to find licensed edible and concentrate producers, much for the reasons that Jardine pointed out in his article.  

While the cannabis consumer has yet to be hit by many of theses changes, that will all change come the start of 2017. Yerba Buena Farms was one of the first 8 recreationally licensed cannabis companies in the state of Oregon, and has been navigating the roll out of basically all the recreational cannabis rules that have been written during the implementation of Measure 91 since the process began.

Photo source: Yerba Buena Farms
Photo source: Yerba Buena Farms

Here, they have done an excellent job explaining this transition, both for industry professionals and for customers/consumers.

“The Oregon cannabis market is going through major regulatory and market transitions as the recreational program gets under way and the medical market becomes obsolete. Many of these changes have already become reality while others may not be apparent to the average cannabis consumer.

While consumers over the age of 21 have been permitted to purchase cannabis without a medical marijuana card for nearly a year via early recreational sales, everything changed October 1st. Canna-business owners and consumers are beginning to see the impacts of these changes.

One of the confusing aspects of the cannabis industry is the complex untangling of the medical and recreational markets. Since the temporary early recreational sales began on October 1st 2015, consumers 21 and over have been legally allowed to purchase (medical) cannabis products as recreational, which thus far, have been regulated by the Oregon Health Authority (OHA). Access to this product by non-patient users has been temporary and simply a means for immediate legal, adult use sales, easing the transition and testing the waters of the recreational market (plus added tax revenue). Meanwhile, the recreational market has been gearing up under the regulatory guidance of the Oregon Liquor Control Commission (OLCC), and operating under a completely different (and much more highly regulated) set of rules.

Beginning October 1st, 2016, the existing medical dispensaries who have applied to become recreational retailers must either carry product that is compliant with the new testing, packaging and labeling laws, or label those products as not compliant with these new requirements.  They have until January 1st, 2017 to obtain a recreational license if they wish to continue to sell product to non-card holding patients.

Most recreational retailers purchased as much medical inventory as possible before activating their licenses to allow more time for additional vendors to enter the market. Once they run out of this product, they must find OLCC licensed producers and processors to purchase and sell their product. Medical dispensaries can continue to sell medical product that has passed the new testing and labeling regulations to recreational users until January 1st, 2017. After January 1st, dispensaries can either remain medical, and only serve medical patients, or acquire an OLCC issued recreational retailer license and purchase all their products from recreationally licensed suppliers.”

Their team continues to go into more detail about changes here.

One thing is for sure, this wheel is only going forward in Oregon right now, and the way we can have the least bumpy ride is by continuing the excellent communication we have has thus far between the OR State Legislature, the OLCC, the OHA, and the cannabis industry.  Stay tuned, as we are ALL watching history roll out together here.


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