Week in Review: Oregon Rec Preview, Florida MMJ Fail + California Dispensary Lawsuit

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Oregon officials offer a glimpse of potential business activity in the state’s recreational cannabis industry, Florida fails to pass medical marijuana reforms once again, and a prominent California dispensary owner faces a lawsuit that seeks to shutter her business.

Here’s a closer look at several notable developments in the marijuana industry over the past week.

Oregon Rec Explosion?

Entrepreneurs got a glimpse this week of what Oregon officials are expecting when the licensing process begins for recreational marijuana businesses next year.

In a budget request to the state Legislature, the Oregon Liquor Control Commission said it expects to receive roughly 2,000 business license applications in the first six months of 2016. The agency also predicted it will issue around 1,300 licenses for cultivators, processors, wholesalers and retail stores in that period.

That’s about equal to the number of licenses in Colorado and Washington State combined.

Yet with 4 million residents, Oregon has a smaller population than those states (Colorado has just over 5 million residents, and Washington has 7 million).

Which begs the question: Will Oregon’s rec industry be ripe for over-saturation before it even begins?

Not likely, says Denver Relief consultant Ean Seeb.

“Just because they’re offering 1,300 licenses doesn’t mean that people will be able to find locations and get companies established,” Seeb said. “I’m guessing that in the end there’ll be far fewer than that number that actually open up for operation.”

Seeb said he expects that plenty of entrepreneurs will wind up starting various businesses without thinking the entire process through, and many of those either won’t wind up opening shops or grows, or they’ll go under relatively quickly.

“A lot of people who probably are a little bit more idealistic may not be familiar with the challenges on the ground in terms of the vast complications and challenges associated with opening a retail facility,” Seeb said.

Back to the Ballot in Florida

Hopes that Florida would legalize medical marijuana this year were sky-high in January when a GOP state senator introduced a bill modeled on Amendment 2, the MMJ measure that failed by just 2.5% at the ballot box in November. But this week, those hopes were dashed when the sponsor admitted publicly that the bill and a companion measure are “effectively dead.”

That means the most likely avenue now for MMJ in the Sunshine State is back at the ballot box in 2016. Even the possibility of revisiting the issue in the next legislative session, before the election, is a pretty bleak option.

“After having gone through this session, I hold out no hope for getting anything of substance out of Tallahassee,” said Ben Pollara, campaign manager of United for Care, the group behind the 2014 MMJ campaign. “They failed us on medical marijuana… The hope now lies in the compassion of the voters of Florida.”

Pollara said that though the current legislative session doesn’t end until May 1, the chances of a bill passing are basically nil. But United for Care has been working behind the scenes, he said, and has already collected 50,000 signatures for the 2016 MMJ initiative.

“Even if we were starting on May 2 with zero signatures, that puts us way out ahead of where we started last time,” Pollara said. “We didn’t even have a petition to circulate until the middle of July 2013 last time around, and we got 1.15 million signatures between July and the first week of January. We’ve got plenty of time.”

Another Crackdown in California

The perils of running a cannabis business in California are widely known. In case you need more proof: Even the head of the state’s main marijuana industry association faces challenges in keeping her dispensaries open.

Lakisha Jenkins, the owner of Kiona’s Farm’acy and the president of the California Cannabis Industry Association, said she received a letter of complaint from Stanislaus County supervisors who earlier this week decided to file a lawsuit to close down her Oakdale dispensary and make her pay $2,500 in fines and court fees. Jenkins is also on the board of the National Cannabis Industry Association.

The problem stems from county statutes that say no medical marijuana dispensary licenses will be issued until state and federal regulations are put in place governing the medical cannabis industry, she said. California was the first state to legalize medical marijuana in 1996 but generally lacks steadfast rules overseeing the industry.

It’s a situation many other dispensary owners across California have faced as cities and counties try to figure out how to handle the industry in the absence of statewide regulations or a unified policy.

“It’s not for lack of trying by the cities and counties, it’s the lack of a state system that allows for cannabis to be distributed in a safe and intelligent manner,” Jenkins said. “Talking to legislators and talking to rural counties – the people making policy for these areas don’t want to ban cannabis, they’re looking for direction.”

The situation underscores the urgency for policymakers in Sacramento to act before the 2016 election. If the state doesn’t have any regulations in place for the MMJ industry by then – and if voters approve recreational cannabis (as they’re widely expected to do) – then it could be setting the state up for even more situations like the ones Jenkins is facing.

John Schroyer can be reached at johns@mjbizmedia.com

Tony C. Dreibus can be reached at tonyd@mjbizmedia.com