Oregon cannabis testing lawsLast week, at the request of Governor Kate Brown and in collaboration with the Oregon Liquor Control Commission (OLCC), the Oregon Health Authority (OHA) issued yet another set of temporary rules for Oregon marijuana. The rules, which apply to both the medical and recreational programs, do three notable things:

  • relax certain potency testing requirements for processors;
  • remove the prohibition on certain solvents (butanol, propanol and ethanol); and
  • allow producers (growers) to test multiple strains of flower in a single batch.

The rules took effect immediately, and remain valid through May 30, 2017. For a comprehensive summary, go here.

Oregon has the toughest pot testing requirements in the country, and that hasn’t changed. By way of comparison, a recent study found that most California weed would fail under Oregon’s rigorous testing standards. These new, temporary rules still contain robust concentration limits and a sweeping ban on pesticides. Although many pot merchants were hoping for more, they will have to adapt; the state has held the line.

We recently touched on the perfect storm created by the tough testing rules and laboratory bottleneck, and we wrote that the rollout of a state cannabis program is an uneven course. We have also commended the state at various points for collaborating with industry stakeholders and making adjustments on the fly. We admire the commitment to public health in Oregon, but only time will tell if these rules have given pot businesses room enough to breathe.

Going forward, we predict strong revenue opportunities for processors who can get their product through, particularly after January 1, when only OLCC licensees will be able to sell into the recreational market. Today, the testing strictures and a shortage of licensed processors in general have caused shelves to thin out in certain dispensaries around the state. Some retailers stockpiled processed products prior to the October 1 testing deadline, but that inventory is fleeting.

We expect the legislature to take a close look at the testing rules when it meets again in February, especially if these administrative tweaks do not fully right the ship. By February, a greater number of OLCC licensees will have entered the system, which in turn will give a fuller picture as to how these rules are working. For now, if you ingest any state-sanctioned cannabis in Oregon, it is going to be clean.