Oregon Bill Authorizes Export of Excess Cannabis to Bordering States

The Oregon Senate introduced a bill, SB582, that would allow the Governor to enter into an agreement with a bordering state to engage in inter-state cannabis commerce, and implement a multi-state regulatory oversight system. By establishing an inter-state trading arrangement ahead of federal legalization, Oregon would obtain a competitive lead in the national branding and market share race. The legislation would also help Oregon reduce the glut cannabis inventory that the OLCC highlighted in the 2019 Recreational Marijuana Supply and Demand Legislative Report. The legislatively mandated report indicates that the recreational marijuana inventory as of January 1, 2019 will last the state for 6.5 years with the current level of demand.

Under SB582, the Governor of Oregon may enter into a trade and oversight agreement with a bordering state. The agreement would permit cannabis businesses to engage in activities in either state including transporting marijuana between the states. Businesses that are transporting marijuana may not use the airspace or other transportation methods that are solely under federal oversight. The bill requires that states that are parties to the marijuana trade agreement establish similar or the same regulatory requirements for the commercial cannabis activities, which will mitigate the risk of regulatory arbitrage between the states. The bill requires that all market participants use track and trace inventory system to ensure public safely and health standards.

We believe that SB582 will help Oregon build a resilient cannabis economy by establishing a sales network for its excess inventory. We believe that the bill could be further enhanced by providing the ability for cannabis businesses to export items to foreign countries. The Oregon Legislature should be congratulated for proactively helping this nascent industry.