3A
THE DAILY ASTORIAN • TUESDAY, AUGUST 7, 2018
Oregon has pot oversupply, Colorado hits the mark
Prices have
plummeted
By GILLIAN FLACCUS
and KATHLEEN FOODY
Associated Press
PORTLAND — Two of
the first states to broadly legal-
ize marijuana took different
approaches to regulation that left
Oregon with a vast oversupply
and Colorado with a well-bal-
anced market. But in both states
prices for bud have plummeted.
A new Oregon report by law
enforcement found nearly 70
percent of the legal recreational
marijuana grown goes unsold,
while an unrelated state-com-
missioned Colorado study found
most growers there are plant-
ing less than half of their legal
allotment — and still meeting
demand.
The reports offer case stud-
ies for California and other pot-
friendly states as they ramp up
their legal pot industries. They
also underscore some key differ-
ences in how broad legalization
was handled that have helped
shape differently evolving mar-
kets in each state.
The Oregon study released
by the Oregon-Idaho High Inten-
sity Drug Trafficking Area — a
coalition of local, state and fed-
eral agencies — includes the
medical and general-use markets
and the illegal market, despite
gaps in data on illicit marijuana
grows.
It noted Oregon still has a
serious problem with out-of-
state trafficking and black mar-
ket grows — and the top federal
law enforcement officer in Ore-
gon demanded more coopera-
tion from state and local officials
Thursday in a strident statement.
“What is often lost in this
discussion is the link between
marijuana and serious, inter-
state criminal activity. Over-
production is rampant, and the
illegal transport of product out-
AP Photo/David Zalubowski
A worker waters marijuana plants at the Colorado Harvest
Company in Denver in 2017.
AP Photo/Andrew Selsky
A marijuana harvester examines a bud that is going through a trimming machine near
Corvallis in 2016.
of-state — a violation of both
state and federal law — contin-
ues unchecked,” said Billy Wil-
liams, U.S. attorney for Oregon.
“It’s time for the state to wake
up, slow down and address
these issues in a responsible and
thoughtful manner.”
The
Colorado
study,
released Thursday, focuses
on the legal, general-use mar-
ket, and researchers at the Uni-
versity of Colorado Boulder’s
business school and a Denver
consulting firm had access to
state tracking data to produce
the first-of-its-kind analysis.
Colorado sales of broadly
legalized marijuana began in
2014, roughly two years before
Oregon allowed marijuana to be
sold at non-medical retail stores.
From the beginning, Colorado
had stricter regulations for its
growers than Oregon did.
Colorado gave existing
medical marijuana growers the
right of first refusal for licenses,
cutting down right away on a
potential source of black mar-
ket production. The state also
requires growers to show they
have sold 85 percent of their
output before allowing them
to expand their growing opera-
tion, said Beau Whitney, senior
economist at national canna-
bis analytics firm New Frontier
Data.
“That was the right approach,
and we’ve made that recommen-
dation to other state regulators to
do that because if you exclude
the medical folks from entering
the market, then there could be
propensity for diversion” to the
black market, he said.
“Colorado has done a good
job in sizing the market. In Ore-
gon, it’s going to take a while for
that balance to be established.”
Oregon didn’t give exist-
ing medical marijuana growers
priority over new applicants as
Colorado did, and it also didn’t
cap licenses. That created a per-
fect storm of endless licenses
for all comers paired with less
incentive for medical growers
to enter the new industry.
In June, the Oregon Liquor
Control Commission, which
oversees general-use mari-
juana, did put a pause on issu-
ing new grow licenses to work
through a monthslong backlog
of applicants. The Legislature
will likely consider steps to get
a handle on oversupply in the
2019 session.
The Pacific Northwest state
also had to contend with a
long-entrenched culture of ille-
gal marijuana cultivation along
its border with California,
where there are near-perfect
outdoor growing conditions.
That tradition of illicit mari-
juana has created a nightmare
for law enforcement agencies
in rural, heavily forested coun-
ties already stretched thin by
budget cuts.
The Oregon report, for
example, noted nearly 15,000
pounds of marijuana with a
street value of $48 million has
been seized heading to 37 other
states. That doesn’t include
illegal pot snagged at Portland
International Airport.
“I know a lot of the legal
industry in Oregon has been
asking for stepped-up enforce-
ment to combat illegal opera-
tions, but there doesn’t appear
in those conversations a clear
owner of the law enforce-
ment,” Whitney said.
Although Colorado has
been more successful in find-
ing a balance between supply
and demand, retail prices for
bud, or marijuana flower, have
plummeted in both states about
50 percent since 2015.
That statistic could be
deceiving, however, because
most growers are now culti-
vating their crop for conver-
sion into the increasingly pop-
ular oil extracts that wind up in
everything from soaps to vape
pens to edible gummies to
salves. It takes 10 times more
dried flower to make an oil
extract and much of the dried
flower is going to that market,
Whitney said.
Oregon day care audit will focus on background checks
By BRAD SCHMIDT
The Oregonian
A delayed audit of Oregon’s
child care system will exam-
ine whether day care providers
with troubling criminal histo-
ries are properly prohibited
from caring for children, offi-
cials told The Oregonian.
Auditors will also identify
barriers that regulators face
when conducting required
background checks.
The audit is tentatively
set for completion and public
release in spring 2019.
Auditors in July confirmed
the scope of their review after
a monthslong wait. Gov. Kate
Brown originally requested an
audit in October 2017 follow-
ing extensive coverage of child
care regulatory gaps by The
Oregonian and the death of an
infant at a Portland day care.
Brown’s office in October
proposed a “small audit” exam-
ining how the Office of Child
Care, the Department of Human
Services and law enforcement
interact when investigating
child safety at licensed day
cares, public records obtained
by The Oregonian show.
But Brown’s office in Jan-
uary asked auditors from the
secretary of state to delay the
audit by 90 days. Brown’s dep-
uty chief of staff, Berri Leslie,
asked for the delay to ensure
the launch of a pilot project to
improve coordination between
childcare and human services
divisions.
Auditors now say they
won’t examine that work and
instead will focus on Oregon’s
efforts to effectively run back-
ground checks of day care
providers.
The audit will compare Ore-
gon’s list of day care provid-
ers against a slew of databases,
including the FBI fingerprint
check and state criminal repos-
itories, sex offender registries
WANTED
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tion, spokeswoman Laura Fos-
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“What the report demon-
strates to us is that our licensed
operators are operating responsi-
bly,” said Mike Hartman, execu-
tive director of the Department
of Revenue, which oversees
marijuana regulation. “They’re
not overproducing the amount
of product they’re putting in the
marketplace. They are operating
to maximize product but also …
emphasizing public health and
safety.”
At Green Dot Labs in Boul-
der, CEO Alana Malone esti-
mated the company grows about
1,600 of its allotted 1,800 plants
that are used to produce canna-
bis oil products.
As one of Colorado’s old-
est companies focused on pro-
ducing extracts from marijuana
plants, Malone said decisions
about how much to plant are
based on expected demand —
and consumers’ interest in the
type of concentrate products
that Green Dot Labs produces is
growing.
Malone said she was pleased
that the Colorado study found
about 32 metric tons of mari-
juana flower left in inventory by
the end of 2017.
“That’s not even close to
some of the figures you see from
others states,” Malone said. “So
I’m a little bit proud of that.”
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