Oregon industry set to blast off
By Shelby Sebens
As Oregon regulators continue to process more than 400 recreational marijuana license applications, business owners are making their way through the regulatory red tape and keeping a close eye on the Legislature for changes to the newly adopted law.
In its first month of accepting applications, the Oregon Liquor Control Commission received 418 applications across all categories of marijuana businesses, including growers, processors, wholesale, research and retail, according to statistics provided by the agency at the end of January.
The OLCC saw a surge of applications in the first few days and has received a steady stream since, spokesman Mark Pettinger said. The start of the application process brought to light problems ranging from difficulties navigating the system to confusion about the application process. But, Pettinger said most of those issues have been ironed out and applicants seem to be doing better.
“It’s like learning anything,” he said. “Once they began to learn the tool it seemed to work pretty well.”
Oregon voters legalized recreational marijuana in 2014, and the Legislature allowed medical dispensaries to begin early recreational sales last October. The state is still in the process of tweaking rules around the industry and state lawmakers will consider adjusting the law during the short session that began Feb. 1.
Leland Berger, an attorney and cannabis activist in Portland, said some people in the industry are concerned about how small garden growers will be impacted if commercial producers are allowed to sell in the medical market.
He said most of his clients have handled the application process with the state on their own.
“It seems a little slow,” he said of the process, adding that it is likely because the state is starting with growers to avoid having retail stores open with empty shelves. This will also help in getting cultivators licensed in time for the growing season. The state expects retail stores will be able to open by this fall.
Portland-based entrepreneur Norris Monson has already submitted four applications, one each for indoor and outdoor cultivation, processing and retail.
His company, Cultivated Industries, will feature a 9,800-square-foot indoor grow colocated with an extraction facility, as well as 40,000 square feet of outdoor canopy in Hood River County. Monson’s first dispensary, Satchel, was slated for a February opening.
Eventually, he wants to build out a seed production and breeding facility.
Monson said his biggest concern for the industry is the widespread bans among local municipalities that could hamper the market. For the most part, he said the state has done a good job of making the market accessible to interested parties.
“You don’t have to have tens of millions of dollars, or even a million dollars, to put in an application,” he said.
Monson said both the regulations and application process seem to be fair for prospective business owners. In many ways, regulations are a fact of life, whether you’re opening a traditional nursery, a restaurant or a marijuana enterprise, Monson said. All businesses have regulatory and licensing hurdles.
“I look at it this way: I’m willing to suffer some well-intentioned inconvenience, especially when it means I can do what I love to do without going to jail,” he said.
The OLCC began hosting free workshops on the state’s seed-to-sale tracking system in February. The goal is to give business owners an overview of the system, Pettinger said. The state will also offer webinars and small group training.
Meghan Walstatter, co-owner of Pure Green in Portland, said her company is waiting on its Land Use Compatibility Statement (LUCS) from the city before it can move forward with the recreational marijuana application.
“That’s kind of been our hold-up,” she said.
The city of Portland launched a marijuana policy program in December, but the process has been a bit confusing, so far, Walstatter said. However, the company’s relationship with the city has been good, she said.
“It’s just a lot of moving parts,” Walstatter said. “It’s a new program and it started a month before licensing.”
Walstatter, whose business has 14 employees, is more concerned about what the Legislature will do with Senate Bill 1511, which would allow medical marijuana establishments to colocate with recreational businesses. Most medical dispensaries have been selling to both medical patients and recreational customers since last October.
“Early sales have been great,” Walstatter said. “It’s been a lifeline that the industry has needed.”
But it’s not enough, Walstatter said.
“We’re breathing better but there’s this image of dispensary owners just rolling around in their beds in cash,” she said.
Walstatter likened the divide between medical and recreational to a Starbucks only being allowed to sell decaf. She said she hopes Pure Green won’t have to choose between the two sectors.
Mike Warren, owner of 7 Leaf Collective in Salem, has completed the tax preparation part of the application, but wants to wait until the Legislature decides on colocation so the business can remain recreational and medical for as long as possible.
Warren’s company currently has eight employees. He plans to open a second store in Salem in the near future.
“We’re definitely going to switch over to recreational, 100%,” he said.
However, if the state doesn’t allow colocation, he will still offer a discount to medical patients. It’s important to treat your neighborhood well, he said.
“I know that a lot of people are really concerned about colocation,” he said. “I don’t think it should be a concern if they think about it.”
Marijuana Venture editor Garrett Rudolph contributed to this story.