We recently mentioned that the Oregon Health Authority would soon offer guidance on seed-to-sale tracking requirements for medical cannabis. Last week, the Oregon Health Authority (OHA) did exactly that, with its Medical Marijuana Information Bulletin 2017-07. The Bulletin comes pursuant to Senate Bill 1057, the most significant pot bill of the recent Oregon legislative session. In our recap of that bill, we ended with our oft-repeated observation that “the OHA regime will soon recede to strictly limited, patient-caregiver relationships. The money there is gone.” So, this is a public service post for anyone out there growing marijuana in the OHA system with the goal of helping patients and not getting rich.

As a reminder, the goal with SB 1057 and tracking medical marijuana in Oregon is to limit diversion and black market activity. To accomplish this, SB 1057 gave the following parameters for tracking:

  • Required marijuana produced and transferred within OHA’s Oregon Medical Marijuana Program (OMMP) system to be tracked by the OLCC tracking system. (The OLCC oversees non-medical, adult use marijuana.)
  • Specified funding for the tracking system to be paid from the Oregon Marijuana Account prior to any other distribution.
  • Required OHA to impose an additional fee on marijuana grow sites, processing sites, and dispensaries to pay costs incurred by the tracking system.
  • Specified timelines for tracking system phase in.

As provided in last week’s OHA Bulletin, December 1, 2017, has been chosen as Oregon’s tracking system phase in date. On or before that date, OMMP registrants will be required to track the production, processing and transfer of all marijuana items in the OLCC’s Cannabis Tracking System (CTS), and pay an associated fee of $480. The alternative is to apply for an OLCC license prior to January 1, 2018, or to indicate that the registrant falls under an exemption. The exemption is narrow: it occurs only where a registrant is a patient growing for him- or herself, with a ceiling of 12 mature plants and 24 immature plants.

Did we mention it would be impossible to make any money in the OHA system going forward? It is. Going forward, the only marijuana sold at retail to medical cardholders will be at OLCC licensed dispensaries, tracked in CTS. In that sense, the December 1 deadline should come as a surprise to no one: SB 1057 has been on the books since May, and OHA licensed dispensaries had become vanishingly rare before that. If any OHA licensed dispensaries still exist after December, they will likely be vestigial to sparsely populated eastern Oregon counties, where bans on adult use sales continue.

Even with all of this context, we still get occasional clients coming to our office looking “to invest in an Oregon medical marijuana grow.” If the individual has been pitched on that, we tell them to run. As a business proposition, the medical marijuana program in Oregon had a good run from 2013 to 2016, but those days have passed. The recent OHA Bulletin regarding December 1 and CTS confirms it.

  • hickorysw1tch

    Some clarification is required here.

    December 1, while accurately represented as the beginning of phasing OMMP growers growing more than 12 plants into the CTS system, it is not the date by which OMMP growers must begin reporting into CTS.

    Actual reporting is not mandatory until July1, 2018.

    (OHA growers have been reporting into the OHA’s own inventory reporting system since July of last year and must continue to do so every month until they are enrolled into the OLCC CTS system. OMMP growers that are growing 12 plants or less must also continue to report to OHA as well if they are transferring to dispensaries or where a designated grower is growing at a grow site with 12 plants or less)

    December 1, is actually the date by which an OMMP grower must make a determination and notify the OHA if they are going to continue as an OMMP grower or transition to OLCC.

    If an OMMP grower (or dispensary or processor) does not notify OHA of their decision by December 1, and/or have their OLCC application on file by January 1, the OHA will not renew their OMMP grow site registration or any of their patients that try to renew at that grow site address.

    While an OMMP grower may opt for OLCC many of these OMMP growers are in cities and counties that prohibit OLCC licensees altogether. Many of them are also hampered in their ability to transition to OLCC due to land use issues in their county. (Approx. 1,400 growers in Douglas County and 1,600 growers in Marion County for instance.)

    In addition, and as you have correctly noted, OMMP growers may avoid tracking altogether by reducing their plant count to 12 mature plants or less. (As a patient advocate I encourage growers not to abandon their patients just to avoid reporting).

    The $480 CTS annual fee is also paid by OLCC licensees but is included in their licensing fees. OLCC has indicated this fee will not have to be paid until the medical reporting section for the CTS is up and running and OMMP growers have completed the training and have received their account numbers to begin reporting.

    This is not projected to be ready until sometime in the first quarter of 2018. There is also no mechanism yet for receiving this money along with determining who will actually be required to report – information that will not be available until after January 1, minimum. Transferring all the data from OHA to OLCC will also present its own set of issues that will take some time to resolve.

    The administrative cost fee which has not yet been determined will be added to the application fee for any person or patient growing medical cannabis for themselves or others. The State does not yet know how many OMMP growers will continue to grow more than 12 plants and be required to report. This fee is not applied to dispensaries or processors.

    Finally, I concur that the best advice to those that want to get rich growing medical cannabis is to rethink their choice. I also agree that the remaining OHA dispensaries will be limited to those areas where OLCC prohibitions still exist, OHA processors will disappear completely and it will be harder and harder for OMMP growers to find a market for their excess as a way to help defer the costs of growing medicine for others. However, many of the OMMP grow sites with more than 12 plants will be allowed to transfer a limited amount of medical cannabis into the adult use market and this will help some.

    No one should expect to get rich growing medical cannabis but then again, growing cannabis for others is not commerce, it is compassion.

  • martin reno

    Post more than Great. Kindly Thanks.