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OLCC Requests Budget for Recreational Marijuana Program

Tuesday, April 21, 2015

 

On Thursday, The Oregon Liquor Control Commission (OLCC) will present a $10.5 million budget request for the recreational marijuana program.  Under this program, “home grow and personal possession of certain amounts of marijuana becomes legal beginning July 1 of this year," according to the OLCC. 

Oregon voters approved the program in November of last year, during the 2013 -2015 budget period. Consequently, the current budget request would be for the 2015-2017 period. 

The budget will be presented to a Legislative Ways and Means Subcommittee and estimates that there will be $16 million in revenue from the sales of recreational marijuana and $2.3 million from the application and licensing fees. 

OLCC’s stated that part of the budget is expected to go toward hiring and training 33 employees in the marijuana program, while $1.9 million would go toward IT projects needed to facilitate licensing, tax collecting, and implementing a traceability system. More than $600,000 of the budget would be allocated for construction, and $1.4 million would go back to the Liquor Fund, from which the marijuana program borrowed their start up fees during the current 2013-2015 period. 

“This requested budget reflects what the agency needs to implement recreational marijuana on time and on schedule. In addition to revenue from the sale of recreational marijuana expecting to exceed OLCC expenses, the requested budget for 2015-2017 also includes one-time start-up costs and efficiencies associated with integrating the marijuana program into existing alcohol programs, such as licensing, enforcement and financial management,” said Steven Marks, OLCC executive director. 

For more information about OLCC or the program click HERE

 

Related Slideshow: 7 Things Oregon Can Learn from Legal Marijuana in Washington

In the wake of what many business owners, lobbyists and advocates call a rocky implementation of recreational marijuana in Washington, Oregon regulators have the opportunity to learn from their neighbor to the north. 

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Engage Medicinal Marijuana Industry Experts  

Washington has been criticized for not incorporating the medicinal marijuana industry or its experts, in its transition to legalization.

“Give all of the people who are legally in the medical marijuana system an easy path, keep people in place,” lobbyist Geoff Sugerman said. 

By being the first state to legalize medicinal marijuana in 1998, Oregon has the advantage of a fully functional supply chain of medicinal growers and retailers

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Connect Growers and Retailers 

Washington Retailers say at first it was hard to find newly licensed marijuana growers. The state can help the fledgling industry by helping to better connect producers and retailers, Cannabis City in-store manager Amber McGowan said. 

Regulating wholesalers is another way to go between growers and retailers, McGowan said. 

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Phase in Retail and Production Permits together 

By proportionately phasing in retail and pot farming permits, Oregon can prevent both the short supply and flooded market that Washington experienced.  In July, retailers sold out in days, while the approved growers scrambled to meet the demand. According to McGowan,  there are too many growers and not enough retailers to sell to now. 

“There are too many farmers going out of business because there are not enough people to sell their product,” McGowan said. “To make it super successful, don’t over saturate the market with growers.”

Solstice Grown grower Alex Cooley advocates not putting a cap on the number of licenses issued at all. 

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Avoid Heavy Taxation 

In Washington, growers pay an excise tax of 25 percent tax between grower and processor, another 25 percent tax between processor and retailer, and another 25 percent between retailer and customer. 

This means a gram of marijuana, which goes for less than $10 on the black market, goes for $25 in retail stores, Cannabis City's Amber McGowan said. 

This price differential is driving customers to the black market, critics say. 

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Don't Use a Lottery System 

To limit the number of retail stores per county, would-be retailers entered a lottery through Washington's regulators to determine who was eligible to apply for a permit.

Critics say the lottery system cut out qualified retailers, some who had experience from the medical cannabis industry, while allowing unqualified people to set up shop. 

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Talk to Cities and Counties 

Taking into account the laws specific to counties and municipalities will be essential to Oregon’s success in implementation, William Simpson of Northwest Producers and Processors Association.

“The single largest mistake we could make is not talking to the attorney generals, cities and counties about moratoriums and what would be allowed,” Simpson said. In Washington, some license holders were unable to open due to county moratoriums and bans. 

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Treat the Industry like Agriculture 

Grower Alex Cooley argues that because marijuana is a plant, it should be regulated like an agricultural crop, taking into consideration harvest cycles. Washington suffered a short supply in July, and then a flooded market following the harvest of outdoor crops in the fall. 

Cooley urges Oregon regulators to allow crops on farm land, as some Washington cities are now banning grow operations within city limits. 

“It’s a plant, it should grow in the sun, not in a warehouse in Seattle,” he said.

 
 

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