State Senate Pumps Brakes on Marijuana Production

The Oregon Senate voted 18-10 on Monday, April 29 to pass a bill stopping the issue of new licenses to grow marijuana for the next two years, while allowing current growers to renew their licenses.

Lawmakers say this is in response to the state’s large backlog of pot, commonly estimated as being 6.5 years’ worth of product. This glut of supply is driving down retail prices, which increases the risk of products ending up on the black market and businesses cutting employees and payroll to manage falling prices.

Reports from southern Oregon show concern from dispensary owners who had hoped to expand into growing their own marijuana but whose license applications are now in limbo, and cited concerns about out-of-state investors “creating an economically unlevel playing field.”

An attempt to pass a similar bill last month failed, reportedly because Republicans opposed it on the grounds that the free market, not the government, should regulate the legal marijuana industry. They described the new bill as “smaller in scope,” and some reversed their vote.

The claim that free market logic should regulate the legal marijuana business is interesting considering there isn’t currently a free market for marijuana outside Oregon’s state boundaries. As The Advocate reported in March, Senate Bill 582 seeks to create a legal, interstate marijuana market between Oregon and Washington as a means of relieving some pressure on Oregon’s oversupply.

However, this plan will likely run into significant issues with the federal government, which closely guards its power to regulate interstate commerce, meaning any goods or services that cross state lines.

The Senate bill to freeze new growing licenses now heads to the Oregon House for consideration.

By Ian MacRonald