By Pioneer Pete Gendron

Oregon Cannabis Connection

I sent this to the commissioners and the county council a couple of weeks ago… Please read and understand the following carefully. Everything about cannabis production is about to change. This is an overview of the future. – Pete

When M91 passed, there were over 420 Oregon Medical Marijuana Program (OMMP) dispensaries in Oregon. Now there are over 450 OLCC retail cannabis stores, and only about 24 medical dispensaries remain. Of the handfull of remaining OMMP dispensaries, many are located in prohibition counties that do not permit OLCC licenses. About 12 are vertically integrated, they produce all of the products they sell, and do not purchase from other gardens.

From the passage of SB 1531 in 2013 permitting OMMP dispensaries until Jan. 1st 2017, cannabis products were provided to dispensaries by OMMP growers and processors. Beginning Jan. 1st 2017, there is effectively no path to market for OMMP growers. The state has made major changes this year to address this problem.

Beginning Sept.1st, 2017, OMMP growers will be able to sign up for METRC tracking with the OLCC and remain medical growers. This will apply to all small gardens of 13 – 48 plants (or 3 – 8 medical cards). All gardens this size must sign up for METRC tracking. If they do not, next year they will only be allowed 12 plants (or 2 cards) and they will not be allowed to participate in commerce.

In December of 2017, the OLCC will begin enrolling new OMMP METRC accounts. This will allow current OMMP growers that sign up to participate in METRC the ability to sell 20# of their produce to an OLCC wholesale or processor licensee. This path to market is designed by the state specifically to encourage participation in the regulated market, and to reduce the financial burden to the growers that will be signing up for Micro canopy licenses next year.

Micro Canopy licenses are for small gardens that are currently 24 plants (Micro 1) or 48 plants (Micro 2). These licenses were created for small craft gardens specifically.

Full Tier 1 and 2 licenses are designed foe EFU and other resource lands, or for growing on a large scale in warehouse production. These are properly referred to as farms due both to the size being almost one exponent larger than the Micro licenses, and the nature of the land (EFU) that they were made to be placed on.

In terms of impact, Micro 1 is 2500 s.f. SunGrown, or 625 s.f. indoors or with supplemental lighting used in the flowering cycle of the plant. This 4:1 scale applies to all license types. Micro 2: 5000 s.f. SunGrown, or 1250 s.f. with artificial light in flower. Tier 1 20,000 s.f. / 5,000 s.f. Tier 2 40,000 s.f. / 10,000 s.f. This ratio was designed to make production of several cycles of cannabis grown with artificial light roughly the equivalent of one SunGrown crop per year. Thus whether growing year round indoors or single harvesting outdoors production of either type should net about the same amount of produce in a given year for a given license type.

It is the intention of the State to minimize diversion by providing a path to market for current OMMP producers. Although this year an OMMP grower may register to use METRC tracking with the OLCC (and sell 20# in to the OLCC system in 2018), in 2018 the State expects most of the 3-8 card OMMP growers to switch to Micro 1 and 2 licenses.

The OMMP tracks plant count, the OLCC licenses canopy area without regard to the number of plants in the canopy area. Many of the rules were made around rough equivalencies of the area a given number of plants occupies. For example, we used an estimated size of 10×10 feet (100 s.f.) per plant SunGrown to create the Micro 2 size of 5000 s.f. This is because a 48 plant OMMP garden would be expected to have a footprint of about 4800 s.f.

The State wants current OMMP growers to switch to Micro licenses for better tracking of the cannabis being grown, and to ensure the cannabis remains in Oregon. Prior to the new OLCC Tier 1 and 2 sizes being established, the State limited the number of plants that can be grown on an OMMP registered property to 48 in rural areas, or 24 in urban areas. This 48/24 size restriction is why we have the sizes for Micro 1 & 2. The exception to this is ‘grandfathered gardens’ which are allowed to have up to 96 plants rural or 48 urban. There are very few of these, and the number will drop further in 2018 because 1) switching to Micro Tiers, and 2) switching to Full size (Macro) Tiers by the growers. With all reporting through METRC, it simply will not make financial sense for the growers to remain in the OMMP system. Remaining as an OMMP grower means only being able to provide 20# in to the market each year, switching to an OLCC license means being able to provide all of a garden’s produce in to the system. It’s a huge financial incentive.

As has been correctly pointed out, the OHA/OMMP has had minimal oversight of registered medical gardens. This is one contributing factor for the complaints we have. Registering with the OLCC will bring these complaints down dramatically. There are differences in the programs that will cause some growers to stop producing at the scale they are currently, and only grow for themselves. For growers changing to OLCC, there are additional requirements.

Current: OMMP growers can grow and sell without a business license.

New: OLCC growers must have a business registered with the Secretary of State to grow and sell.

Current: OMMP growers sell directly to retail stores.

New: OMMP grower can provide 20# to an OLCC processor or wholesaler, no direct to retail sales.

New: OLCC Micro Wholesalers License allows bundling of multiple gardens produce for a trackable path to market.

Current: OMMP growers have no documentation on employees and do not track wages or pay taxes.

New: Switching to OLCC Micro license requires employees be documented and wages and withholding occurs.\

Current: Trimmigrant nightmares.

New: Workers arrive and depart like at any other job, and must have OLCC issued Marijuana handlers cards.

Current: No restrictions on who works at a garden.

New: Background checks for workers and owners.

Current: No age restrictions.

New: 21 and over to work in a licensed business.

Current: Paying in pot under the table that gets diverted – usually out of state.

New: W-2s, accounting, providing finished product in to the tracking system.

I think you can see that changing the nature of business and reporting by forcing the transition to the OLCC program will address many of the current complaints. The ballot question 17.81 was voted in favor by almost 64% of voters. But only about 46.5% of voters bothered to vote. This effectively makes support of 17.81 only about 30% county wide. Further, the city holds about half of the county’s population, and GP residents are more likely to vote than rural residents. This reduces rural support of 17.81 down to about 15%. This is far from a mandate. Although the question was direct, it came with no context,and there is little understanding by the public at large of this complicated subject.

Support for 17.81 came from everyone who ever had a fence issue, dog problem, junk car in the front yard, or just a neighbor that was a jerk. Although we are talking about pot, when we peel back the layers we typically see that it’s not really about pot at all. Support for 17.81 came primarily from voters that do not live in rural areas, live in the UGB, or simply believe decades of government propaganda about this plant.

According to the latest OMMP report, Josephine County has 6,165 patients, 1,566 caregivers, 4,245 registered growers, and 2,797 grow sites. There are 4,241 grow sites state wide that the Micro Tiers are designed specifically for (these are 3-8 card gardens). There are 20,960 gardens that are 1 or 2 cards and will remain in the OMMP system for personal production with no path to market. There are 160 small farms with 9 or more patients per grow site state wide. These are expected to either become Tier 1 or 2 licensees, or reduce the size of their garden to Micro Canopy size.

It’s going to be more time consuming to get the exact garden sizes for Josephine County, but using the state numbers we can see that about 1 in 4 gardens will be in the size range for converting to a micro canopy license, and about 35% of all OMMP registered gardens will be either enrolled in the METRC tracking system or switch to the OLCC Tiers (the only other option being to stop growing). 65% of gardens state wide are 12 plants or fewer and are personal production only. In Josephine County I would expect the number of gardens that will be eligible to go to Micro Tiers is half or more.

So on one hand we have 15% of rural voting residents that supported a ban on OLCC production on RR land, on the other we have maybe 2000 producers in the 3-8 card range that will want to sign up for Micro Canopies in 2018. Some growers will either drop out of the system or reduce the size of their garden to 12 plants. This is a small minority by all estimates.

17.81 was, in my opinion,the wrong question. You have complaints about unregulated OMMP production, and the question addressed regulated OLCC production. Clearly not the same issue. The question was asked when the state was in the middle of making all these changes without considering the outcome of the new regulations both for the industry and the communities in which we live and work.

Until January of last year, all cannabis in Oregon was produced at home, not at formal businesses. By January of 2018 all growers that wish to participate in the retail supply chain will be entering the OLCC system, and by January of 2019 almost all of the medical growers on RR and other lands not eligible for full Tier 1 and 2 licenses will have new businesses registered with the Secretary of State and run as businesses even if they are located at home.

I’ve made several attempts to finish this over the last few days, and feel I should send it off now even though I think it needs a little more work. Please read and understand what the implications are for closing Josephine County to small scale cannabis gardening.

Pioneer Pete—

© 2017 Pioneer Pete Gendron. Posted on Facebook originally. Posted here by special permission.