Is Pot The Next Pinot Noir? Oregon May Consider Exporting Weed To Other States

Michael Monarch's marijuana grow flourishes under the Cascade and Siskiyou mountains near Ashland Photo: Beth Nakamura, AP file

Marijuana could take the next step toward joining pinot noir, craft beer and hazelnuts on Oregon’s list of famous exports, under a proposal likely to go before state lawmakers in the new year.

The Craft Cannabis Alliance, a business association led by founder and executive director Adam Smith, is working with legislators to let Oregon start exporting pot to other legal-weed states by 2021.

Among them is Sen. Floyd Prozanski, D-Eugene, who said he also plans to reintroduce provisions from Senate Bill 1042, a similar proposal that died in the statehouse in 2017.

This comes as the state’s legal weed industry has faced plummeting prices over the past year due to demand not keeping up with supply, experts said. Also at issue is whether bad actors are funneling marijuana into the lucrative black market.

The proposals represent how advocates are trying to move pot onto the forbidden superhighway of interstate trade, which is fraught with regulatory roadblocks. Oregon demands weed grown or sold here stay within state borders, and marijuana remains federally illegal.

“There are plenty of markets that would be thrilled to have world-class cannabis,” Smith said in an interview. “But prohibition keeps us from sending it into those markets.”

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Wholesalers could ship across state lines so long as Oregon’s governor had made a pact with the receiving state to allow those deliveries, according to draft language reviewed by the Statesman Journal.

Still, opponents aren’t convinced Oregon would find any takers. “I can’t imagine any state would agree to do this with Oregon,” said Kevin Sabet, president of anti-pot group Smart Approaches to Marijuana.

“It looks like a desperate attempt to tackle the out of control black market production that has happened in Oregon since legalization,” Sabet said. “The state should be focusing on how to reduce overall demand and supply.”

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Beau Whitney, a senior economist with Washington, D.C.-based cannabis think tank New Frontier Data, said opening the export market “would either slow or stop the price declines, because there wouldn’t be any more excess.”

“It would create more of a market in which quality and branding and other things would come into play more so than just pure price,” Whitney said.

Exports would still need to meet Oregon testing, packaging and labeling rules, and a 17-percent tax would be imposed on out-of-state transactions.

Local ownership is also top of mind. Out-of-state business officials have snatched up Oregon enterprises in the past, from beverage giant Anheuser-Busch’s purchase of 10 Barrel Brewing Co. in Bend to California-based Pacific Coast Producers’ acquisition of Oregon Cherry Growers’ processing arm in Salem.

Advocates want to help keep the state’s pot operations under local control.

“When we do get to export, is there any ownership here, are we building wealth here, or are we just shipping money out-of-state?” Smith said. “If you got to export tomorrow, and folks suddenly could get a fair price for their product, you’d still have a bunch of outside companies here, but you would have a relatively healthy ecosystem.”

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Prozanski’s bill would have permitted interstate transfer between adjacent states, though shipping marijuana by air or other means only regulated by the federal government would be prohibited. Product also could not be taken through states that didn’t agree to participate.

The senator said he reviewed the cannabis alliance’s proposal and is open to combining it with his.

“I’m very pleased to look at this,” Prozanski said. “But I guess what I want to make certain is we don’t push ourselves into a situation where the perfect becomes the obstacle of getting anything on the books for what will be more permissible under current interpretations by the feds.”

A main thrust is to ready Oregon to be a major exporter should federal lawmakers legalize marijuana in coming years. “I don’t want us to be flat-footed and (have) everyone running out at the same time trying to create something,” Prozanski said.

He jokingly said he considers Oregon a “vice state,” pointing to the wine grapes, craft beer and cannabis produced here. “Why shouldn’t we benefit from that availability of being able to grow top-quality agricultural products?”