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New Rules Leave Oregon Stores Struggling, Consumers With Fewer Products To Buy

Cultivating a reputation as the legal state with the strictest standards in the cannabis industry doesn’t come cheap.  

Those working in Oregon’s cannabis dispensaries know this better than anyone.

“It’s been a rough month,” said Matt Bailey, co-owner of Portland’s Local Leaf dispensary. “[We’ve been] able to keep our heads above water, but I’m afraid some places just won’t be able to.”

Bailey is, of course, alluding to the most recent (and most stringent) slate of cannabis industry regulations rolled out by the Oregon Liquor Control Commission and the Oregon Health Authority, which came into effect on October 1.

Those regulations include a requirement to have all cannabis products tested by new laboratory equipment to meet a higher (and far costlier) set of standards as well as new child-protective packaging and labelling on all products.

While Bailey doesn’t disagree with having strict standards for the industry, he thinks particular aspects (like the new testing regime) weren’t necessarily handed down in the fairest of ways. He is far from alone in this opinion, he says.

“Big picture, I think the new testing is a good thing, but I think the line was drawn in the sand a little too sharply... it could’ve been a little bit of a softer landing,” said Bailey.

“October 1st was pretty much when all the outdoor crops were coming down and it just kind of slammed the testing facilities, which didn’t seem ready for that big push.”

Not to mention the fact that there were only a handful of labs statewide that had their state accredited license to perform the testing for pesticides, mold and potency by October.

This meant dispensaries like Local Leaf – who weren’t allowed to purchase new products following the announcement of the new regulations in late spring – had about 75 percent of their selection slashed after the October 1 deadline, with a three-and-a-half week hold on new products.

“We’d usually have 30 to 32 strains maybe about [two weeks ago] we had four. The only thing I was able to hold onto was anything I had in stock prior to Oct. 1 and then I had to label it as not meeting new test requirements,” said Bailey, adding that he didn’t have the storage space to “stockpile to the ceiling.” 

“For small vendors who basically rely on one or two products, if they couldn’t get them through testing or the labelling or any other hoop they had to jump through, they’re done. They have nothing left to sell.”

Needless to say, a lack of product translates to a lack of customers. Bailey calls customer reaction “a mixed bag – as you’d expect.”

Bailey says some consumers are leaving the state to buy cannabis products.

“We were just getting our feet under us…and now we’re going to have to work to get our customer base back," said Bailey. "Some people are more understanding and they’re willing to go with it, but there’s some other people that are headed north [to Washington].”

“We get how customers work. They’re going to go where they can get what they want, and there’s a whole lot of risk involved there. Not to mention Oregon loses money on something that they should be able to generate tax dollars from.”  


Amazon Organics store front

Shane Cavanaugh is the owner of Amazon Organics in Eugene, one of the oldest dispensaries in the area. While he said that a “well established customer base” and ample room for storage have proven “helpful, since things are changing so frequently”, he too is frustrated with the process behind some of these changes.

“I would like to see the lab testing be a little more realistic…there’s no other sector of agriculture that is subjected to this kind of testing,” said Cavanaugh.

Not to mention cost. Bailey said the cost dispensary operators face for testing products has skyrocketed under this new system, making it even more difficult for small operations to stay afloat.

“If you had a flower and you wanted to get it through proper testing, what used to be $100 and took about three days is now $350 and takes up to two weeks,” said Bailey.

“So it’s not only that you have to pay more, but you have to wait longer. And there are a lot of issues with that. You start to deteriorate the quality because everything has been sitting for a month now.”

Both Bailey and Cavanaugh believe that, going forward, more consultation with the industry’s decision-makers would be more than welcome.

“I think that, ideally, at the beginning of spring and summer they would’ve sat down with people that are actually in the industry… because I don’t think they understood what was actually going to happen with that timeline,” said Bailey, adding that “I understand it’s going to be perfect for everyone, but it could’ve been better for everyone, too.”

Bailey assures that it’s “not all doom and gloom”, however. New product is slowly starting to trickle back in, and he is confident it will start to feel like business as usual again soon. After all, retail sales in Oregon grew from $12.5-million in January to $24.9 million in June, according to BDS Analytics.

“I think we’re kind of paving the way for the new states to come up, just like Colorado and Washington did for us. We’re taking some of the policies from them and then creating new ones,” said Bailey. “I think we’re just working out the kinks... and hopefully we can just keep progressing and moving forward.”


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