Testing Rules Lead To Low Supply, Higher Prices In Oregon Cannabis Industry

The states strict rules around pesticide testing for Oregon marijuana are hurting its fledgling recreational industry and could mean a $10-million drop in tax revenue from sales in the fourth quarter - or at least thats the argument in a report released this week by those in the business.

The Oregon Health Authority began enforcing new regulations on October 1 that tightened protocols for testing recreational marijuana, expanded the list of banned substances and required product to pass tests at state-certified labs before it could be sold.

The regulations are the first mandatory pre-emptive testing in the country for marijuana; so far, the state has issued two recall notices for pot product that failed tests.

But Oregon has only certified six labs, and thats created a bottleneck for testing, according to a report released Wednesday by Beau Whitney, a cannabis industry economist, and by the Oregon Cannabis Business Council.

Testing that should take five days is taking to up to 21 days - a delay thats meant low supply, increased prices and lost revenue, said Whitney, a former executive for a marijuana production company. Product cant be sold until its tested. If it fails the tests, it must be discarded.

Whitney conducted a survey of more than 680 Oregon cannabis business people. Seventy-two responded, and of those, 16 said they were closing because of the new rules.

October was a defining, if not catastrophic, month for Oregons cannabis industry, which, until then, was growing at a very fast rate, Whitney said.

Recreational marijuana was tested before October 1, but there werent uniform protocols or state-approved facilities for doing so - and it wasnt clear what happened if product failed. State health officials say the new laws protect the public and the slowdown is the price of safety.

No one should be exposed to these pesticides when theyre using these marijuana products, said Jonathan Modie, a spokesman for the Oregon Health Authority.

The health authority has borrowed inspectors from other departments to get more labs on line, and the governors office is expected to announce some temporary fixes to address the backlog next week, according to The Oregonian/OregonLive.

Other states that have legalized recreational marijuana, such as Washington, have rules in place for pesticide use, but Oregon is the only state to require pre-sale testing.

Rodger Voelker, lab director of one of the pesticide testing laboratories, Eugenes OG Analytical, said the delays are a temporary growing pain of a new industry ...