'Medical could officially have a gravestone': Changes in Oregon cannabis market
Long considered a source of Oregon's black market, medical marijuana is fast falling victim to a combination of red tape and a different kind of market force: the convenience of recreational retail sales.
"Medical could officially have a gravestone," said Kit Doyle, who formerly sold medical marijuana but switched to hemp products through his business, the Murphy Hemp Company.
The number of patients registered with the OMMP is half of what it was a year ago. Statewide it dropped 41 percent, from 59,137 to 34,892. In the county it was almost 50 percent — from 7,027 to 3,540.
The number of registered growers also dropped precipitously. Statewide it went from 23,175 to 13,959 — 40 percent. In the county, it went from 2,957 to 1,668 — a 44 percent drop.
Doyle and several industry watchers think the numbers will continue to go down, according to The Daily Courier.
Medical marijuana has been legal in Oregon since 1998, when voters created a system that allowed registered persons to grow their own marijuana — or obtain it from someone who grew it for them.
But even as the state Legislature took steps to allow dispensaries for medical marijuana, a sea change occurred in 2014, when voters legalized recreational marijuana, allowing retail sales to anyone over 21 and setting up commercial production.
It also allows people to grow up to four recreational plants with no registration requirements, except where prohibited by local statute, such as within the city limits of Grants Pass.
To feed those outlets, the state issued licenses to approved growers and operators.
As of this week, there have been 475 applications to grow, process, sell or test marijuana in Josephine County for the retail market. Reflecting the region's conducive-to-cannabis climate, the vast majority, 399, were for recreational farms.
Medical marijuana patients who buy at retail dispensaries are able to avoid sale taxes that can reach 20 percent, although they must pay an annual $200 application fee to be an OMMP-registered patient.
The hassle of having to pony up $200 for the annual application fee — and the proliferation of dispensaries selling recreational pot — appears to be a factor in the decline.
"I repeatedly hear from customers," said Diana Calvert of River City Retail marijuana dispensary in Merlin. "They say, 'I let my medical card expire. It's too expensive to renew. I'll just pay the taxes.'"
Or, as Rob Bovett, who helped write the new rules as legal counsel for the Association of Oregon Counties, put it:
"Those that were getting an OMMP card as a ruse to get marijuana for recreational purposes ... no longer need to continue the ruse after we legalized recreational marijuana."
Those who remain OMMP patients include heavy users and those who live in an apartment or other location where they can't grow their own. For those patients who rely on a grower, finding one can be difficult because their numbers are diminishing, patient advocates say.
"The regulations around providing for other patients are quite onerous," said Cedar Grey, a Williams-area grower who sits on the Oregon Cannabis Commission, a state advisory body. "I actually think that's the biggest factor.
"Many patients are just unable to find a grower to supply them. Previously I think it was relatively easy for a patient who didn't know anyone, in relatively short order, to find a grower to provide free or low-cost cannabis.
"With the changes they've made (to the OMMP program), it's much more difficult to care for other patients. Therefore, the number of growers willing to do that has dropped significantly."
As of this year, medical marijuana growers who are supplying patients with marijuana must use an online state reporting system that tracks movement of product. Some say the tracking system, known as METRC, is difficult to learn and use. The state provides training, but growers don't like it, and some might drop out because of it.
"The new reporting system is something people aren't going to be able to adapt to," said Pete Gendron, president of the Oregon SunGrowers Guild, a locally based association of growers. "The training is inadequate. The tech support is also woefully inadequate.
"It takes a minimum of 10-12 hours to access basic functionality of the system," Gendron continued. "I don't know a single person who is completely proficient. It's not an easy system to use. You can't really expect a 70-year-old to navigate it."
Gendron expects the number of registered medical marijuana growers to continue to drop. He himself has stopped growing for others, saying he doesn't have the time. He previously supplied eight patients, allowing him to grow 48 plants, or six mature plants per client.
Gendron said the situation for patients is made all the more difficult if they are low income — as are more than half of OMMP patients.
"They don't have the money to go to the corner dispensary," he said.
That might lead some to return to pills to treat their conditions, he said.
Gendron also blamed the drop in the number of growers on the county's ongoing attempts to restrict commercial marijuana operations in rural residential zones, although he mostly blamed new state regulations.
"The county shares a minority of the blame," he said. "It's really the state Legislature which has done the absolute most damage. When they changed reporting rules for the OMMP, they put into place barriers that destroyed patient-grower relationships."
Sheriff Dave Daniel guessed that the number of growers has dropped because of price drops associated with oversupply of marijuana. The state never set limit on licenses or production.
"I think it's economics," Daniel said. "You saw a green rush. It took a year to hit home. Everybody came in and started growing. I think they found it difficult to get rid of the product, especially legally.
"I think there was an overabundance of marijuana and the market was full. That's my guess."
Calvert, of River City, said dispensaries are paying about $1,600 per pound for the best product, and as little as $200 per pound for lesser quality product. Just a couple years ago, pot prices below $1,000 per pound were unheard of.
Doyle, who now sells hemp products, said enforcement actions have caused some medical marijuana growers to leave the OMMP program.
"The medical industry thrived on the black market," Doyle said. "They're shutting that down."
He also said that people are able to buy marijuana online or through social media connections, which may be more convenient and doesn't require OMMP cards.
Like Gendron, Doyle worries that some patients, having lost their grower, might be returning to "their other medication," including prescription pills. Some patients also might be buying marijuana informally from someone in the neighborhood who is selling excess product.
"It's such a tragedy," Doyle said. "What it's doing is pushing the medical back underground."
And some growers are moving, he added.
"A lot of people are going to other states that are just building a medical program," he said.
Some medical marijuana growers have left the OMMP and converted to supplying the retail market, which is regulated by the Oregon Liquor Control Commission, he said.
State Rep. Carl Wilson, a Grants Pass Republican who helped write the new rules, agreed that former medical marijuana patients are leaving the OMMP and are instead buying from retail outlets.
"I think a lot of people say, 'Let's cut my overhead and go to the rec side,'" Wilson said.
Wilson, who has been deeply involved in state marijuana issues, also said that some growers have switched from medical to recreational because they want a better financial return.
"They think they can do better," he said.
Oregon Health Authority spokesman Jonathan Modie said the advent of retail outlets coupled with complex new regulations may have led people out of the OMMP. He said a survey was going out toward the end of the year to former patients asking them why they left and current patients why they stayed.
"Marijuana is legal in Oregon," Modie said. "You don't need a medical card.
"We're not surprised we've seen a drop."
Information from: Daily Courier, http://www.thedailycourier.com