Oregon’s SB1057 and Its Impact on Medical Licenses

Oregon’s SB1057 and Its Impact on Medical Licenses

June 1, 2017

Oregon Governor Kate Brown is expected to sign Senate Bill 1057, which alters multiple measures regarding Oregon’s medical marijuana regulations, some of which also relate to recreational marijuana.  Here’s what changed:

  • Licensed Oregon medical marijuana growers and processors can receive permits to sell their inventory to recreational retail dispensaries.
  • Medical marijuana licenses will now be required to use the state’s inventory tracking system to report key data points into the state’s regulatory agency.
  • Licensed medical marijuana growers will now be allowed to cultivate more plants at a single time.

Two of these changes could have a significant impact on the state’s medical marijuana market.  For starters, Oregon medical licensees now have to submit reporting data into the state’s regulatory tracking system.  This will require many businesses to alter their workflows in order to meet the needs of the state’s reporting requirements; a task that should not be taken lightly as it will completely shift the way your business operates.

The other change could have a more substantial impact on concerned medical licensees.  With Oregon’s already struggling medical marijuana market, licensed medical marijuana growers and processors now have the ability to receive a permit, which will allow them to sell their inventory to recreational licensees.  Considering the recreational market has higher price points than the medical market, it seems that it would be advantageous from a business perspective for growers and processors to only sell to the recreational side because there is simply more profit to be made; a similar structure has led to sparse medical cannabis access in Washington.  This would leave medical dispensaries in a pinch with a highly competitive market and lacking supply.  One potential outcome of this change is that it could force medical licenses to increase their prices to match those of recreational in order to stay competitive with suppliers.

There are a lot of benefits to medical marijuana programs, including the ability to provide patient’s with affordable medication on a consistent basis.  Recreational marijuana tends to have higher price points due to higher demand and less frequent use, whereas medical marijuana patients often rely on the product for around the clock comfort, which would require a patient to purchase significantly more product than a recreational user and is not as financially sustainable for medical patients when purchasing at recreational prices.

Licensees should consider applying for an Oregon recreational license and making the transition before it’s too late, however, many establishments refuse to do this for fear of leaving their patients with no access to medicine.  How are you preparing for the change and how do you think it will affect the state’s medical cannabis market?  Neighboring states like Washington have pursued similar changes and their medical cannabis program has seen significant decline in patient numbers.

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