Slow Launch Expected for Oregon’s Full Recreational Marijuana Market

By John Schroyer

Oregon retailers anticipating the day when they can sell a full ounce of cannabis to adult-use customers, versus just a quarter-ounce, may be disappointed it probably wont be on Oct. 1.

In fact, it may take months for scores of businesses that have applied for recreational marijuana permits to become fully licensed.Full licensing is expected to trigger an increase in adult-use sales across the industry, because MJ businesses will be able to sell larger amounts of rec products to customers.

Regulators are one of the reasons behind the slow transition to a market in which medical marijuana dispensaries will no longer face temporary curbs on the amount of cannabis products they can sell to adult-use customers. That full launch was expected this Saturday.

But Mark Pettinger, spokesman for the Oregon Liquor Control Commission (OLCC), said the rec industrys full rollout wont occur Oct. 1 in part because his department has granted rec licenses to only a handful of existing medical dispensaries. But, he added, licensing is being fast-tracked.

We did license two retailers last week, and I know that there are more on the way (this week), Pettinger said.

Untildispensaries get a full license, they will face curbs on the amount of rec products they can sell.

Existing dispensaries in Oregon have been selling to adult-use customers for almost a full year. Limited rec sales began on Oct. 1, 2015, but customers have only been allowed to purchase up to a quarter-ounce of flower. In June of this year, rec customers were allowed to start purchasing small amounts of edibles and other infused products, but the purchasing restrictions kept the rec market relatively constrained.

October 2016 was when many expected a big change, including a big boost in the amount of products retailers are allowed to sell to a single customer in one transaction. That includes flower, edibles, infused drinks, concentrates, and more.

Sales Gains Expected

Peter Gross, the chief operating officerof Green Valley Wellness in southern Oregon, said he conservatively expects to see his companys sales go up between 25%-30% after it receives a full rec license from the OLCC.

He predicted sales will go up for cannabis retailers across the state once applicants begin receiving their full OLCC licenses, instead of the temporary Oregon Health Authority permits that allow them to sell quarter-ounces.

Sam Chapman of Oregon-based New Economy Consulting says sales absolutely will go up as the OLCC licenses more retailers.

But the OLCC has been taking its time with regulations and licensing.

I expect to see the first OLCC retail licenses issued by late October, if not sooner, Chapman said, and added that at one point, there was a lot of speculation around the OLCC not being able to license retailers by the start of 2017. Thats whenretailers with only an OHA medical dispensary license have to stop selling to rec customers.

According to the agencys website, since it began accepting applications in January, the agency has received nearly 1,400 adult-use business applicationsas of Sept. 23. But only 296 had been approved by the same date.Of those 296, the vast majority are for cultivators, with a handful of testing labs and wholesalers also included.

That kind of timelineis why Green Valley Wellness waited until a few weeks ago to turn in its retail application to the OLCC, Gross said. Hes not expecting to receive a retail license until November or December.

Were certainly not going to be done by Oct. 1, Gross said. Im not willing to trust that bureaucracy to get it done in time I think theyre going to be dealing with it for quite some time. Even through the spring.

Gross said that the OLCC was late this past spring in licensing the first adult-use growers, and didnt award the first cultivation permits until late April when the agency had said it was shooting for March. That didnt give him much confidence in the departments ability to move quickly on licensing and red tape in general.

Regulators Working to Approve Licenses

On Monday, Pettinger said OLCC inspectors were working hard to get rec businesses permitted.

I know that our inspectors were out this weekend at dispensaries. Theyre making themselves available, not 24/7, but close to it, Pettinger said. We never expected that ...