Dreaming of an Oregon-California Cannabis Exchange

Yesterday, we gained a get in touch with from Congressman Earl Blumenauer’s place of work listed here in Portland, Oregon. The function of the get in touch with was to go over an concept to offer with the oversupply of cannabis in the condition sanctioned Oregon market. Exclusively, the concept was to check out the possibility of an interstate compact with California, exactly where Oregon would offer its surplus cannabis to the Golden Point out, substantially like Oregon has marketed its surplus renewable energy in excess of the several years. Unfortunately, we do not feel it’s a terrific concept.

Could a west coastline cannabis exchange genuinely do the job?

We have been producing about the oversupply problem for a although (see listed here and listed here). Recently, oversupply has also begun to receive a surge in media coverage (see listed here, here and listed here). To be guaranteed, we have a ton of clients who have been impacted by frustrated cannabis costs these days: These clients include things like not just farms but processors and vendors who are having difficulties to move product or service and go over costs, allow by itself switch gains. This predictably has resulted in truthful bit of industry consolidation as of late, and we have been buying and marketing cannabis businesses nonstop for a although now.

Various techniques have been recommended to offer with the oversupply problem in the regulated Oregon market. These techniques include things like obtaining the condition legislature cap the issuance of licenses, like Washington, or obtaining the Oregon Liquor Regulate Fee (OLCC) curtail optimum permitted canopy dimensions. To day, neither approach has acquired any traction. Alternatively, coverage makers are simply viewing the market attempt to kind by itself out, which suggests viewing a important amount of operators to fall short, although some others are swept up by out-of-condition and even international expenditure.

So why do not we feel an interstate compact with California is a terrific concept? There are a handful of distinct reasons. The initially is that California has loads of cannabis in its possess appropriate: It just requirements to recalibrate regulations that are presently observed as also restrictive to allow most smaller and mid-sized operators to enter the regulated market. The 2nd reason is that California’s adult use application is also new: The condition will just about undoubtedly desire to maintain and improve its possess lawful cannabis, somewhat than import product or service from Oregon although a black market thrives. But the major reason of all might be that an interstate compact, although exotic, is legally and politically harmful.

For 22 several years and in excess of the class of four presidential administrations, the federal federal government has taken a standard posture of restraint as states have promulgated professional medical and then recreational cannabis courses. There are a variety of reasons for this, but just one is definitely the powerful argument that states have less than the 10th Amendment of the Constitution to roll out these courses. An interstate compact for the transfer of cannabis, conversely, would be legally indefensible. Not only does the federal Controlled Substances Act, at 21 USC §801, expressly present that trafficking in “interstate and international commerce” justifies federal manage of selected substances, but the Supreme Court docket by itself has held that the commerce clause makes grounds for enforcement of prohibition even within condition borders.

In addition, in buy to triumph, the interstate compact would just about undoubtedly require to be buttressed by Congressional consent, which is a official legislative motion contemplated by Short article I, Area 10, Clause 3 of the Constitution. When Congressional consent is specified, an interstate compact basically transforms into federal legislation. But how would this do the job if federal legislation can make the possession and sale of cannabis unlawful? And why would Congress grant an inherently problematic consent decree, when it could simply re- or deschedule cannabis? The response is: It would not. Supplied this context, any energy by two states to set up a cannabis exchange, if challenged, would go down in flames.

Supplied the foregoing, and specified the increase in Oregon licensees coming on the net, the local industry is not heading to shake its oversupply problem whenever before long. That is why our pragmatic politicians like Congressman Blumenauer are wise to check out paths to create Oregon as a foremost cannabis exporter. For now, even though, the target should be on constructing and endorsing infrastructure in the four corners of the condition. This will be certain that Oregon is set up to triumph in a pair of several years, when the walls appear down nationwide.

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