Oregon Wants to Become America’s Source for Cannabis

Facing a historic surplus of cannabis that has fueled illegal sales and caused prices to crater, Oregon lawmakers are moving forward with a first-of-its-kind bill that would allow the state to legally export cannabis.

The measure cleared the state Senate this week in a vote widely seen as the bill’s biggest hurdle on its way to becoming law. It now heads to the House, where local cannabis advocates expect it to receive strong support. Gov. Kate Brown has previously expressed her support for the bill, but she said federal banking reform for the cannabis industry should be the first priority.

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If Oregon Senate Bill 582 becomes law, it would authorize the governor to enter into export and import agreements with other legal cannabis states—provided federal cannabis policy allows it.

“Oregon has a long and proud history of trailblazing and pioneering forward-thinking policy on cannabis,” said Adam J. Smith, executive director of the Craft Cannabis Alliance, which led the lobbying effort for the bill along with the Oregon Retailers of Cannabis Association (ORCA).

“Oregon was the first state to decriminalize cannabis possession, in 1973, and the second state after California to legalize medical marijuana, in 1998,” Smith said. “Now, Oregon is poised to become the first state in the country to prepare for the inevitable: licensed interstate cannabis sales.”

On Wednesday, the state Senate passed the plan on a 19–9 vote, with two Republican Senators joining 17 Democrats in voting for the measure.

“There’s still a lot of work to do, but today’s Senate vote is a major step forward for the future of Oregon’s cannabis industry—and in securing our position as the country’s leading cannabis exporter,” ORCA Executive Director Casey Houlihan said.

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Even if the measure passes, cannabis would stay in the state for now, as the measure is contingent on federal law allowing for interstate cannabis commerce. That’s led some critics to call the effort premature. But one of the bill’s chief sponsors, state Sen. Floyd Prozanski (D-Eugene), argued that SB 582 would put Oregon in a strategic position to be a first mover when federal law changes—something many observers now see as inevitable.

“Oregon is a trailblazer, and this is another way that we can lead the nation regarding this relatively new legal industry,” Prozanski said in a press release following the Senate vote. “Several states have legalized cannabis and so this puts Oregon in a great position to enter into agreements with other states, if and when the day comes that interstate cannabis trade is allowed by federal law. With the passage of Senate Bill 582, Oregon will be ahead of the game in this burgeoning industry.”

Oregon’s overabundance of legal cannabis has been well documented in recent months. Well over a million pounds of cannabis flower is sitting in storage right now, according to state government data. Oregon has been a national leader in producing quality cannabis for decades, and state lawmakers such as Prozanski want consumers in other states to enjoy Oregon cannabis much like they do other Oregon products such as craft beer and Tillamook cheese.

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Allowing cannabis exports from Oregon could be a win for more than just Oregon’s cannabis industry. Due to environmental and other constraints, some states have a much harder time cultivating quality cannabis in a sustainable way and at an affordable price. A quality eighth of cannabis can be had in Oregon these days for $20 or less, far lower than in nearly any other legal state.

Cannabis “grows abundantly in Oregon.” Prozanski said. “This will allow us, someday, to offload excess supply legally into areas where it’s legal but is harder to grow. It also will turn our state’s burgeoning cannabis industry into a much bigger player nationwide.”

Oregon shares a border with three legal cannabis states: California, Washington, and Nevada. Of those, Nevada may be the most likely state to enter into an agreement with Oregon. Washington is well suited to cultivate enough cannabis to supply its consumer base, and while California is still working out a lot of issues in its legal market, cultivators there have historically produced far more cannabis than residents there consume.

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Nevada, on the other hand, is a different situation. Cultivation is harder to do in Nevada in a sustainable, cost-effective way due to the state’s climate.

But in theory, the bill could offer more price stability even to states that produce enough cannabis to meet supply. As envisioned by supporters, Oregon could enter into an agreements with other states to establish a sort of supply insurance policy.

If a wildfire were to decimate large cannabis crops in California, for example, Oregon cannabis could help meet demand.

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Interstate cannabis commerce agreements between states could also help cannabis companies that operate in multiple states, as pointed out by cannabis entrepreneur Clifford ‘Uncle Cliffy’ Robinson, a retired NBA All-Star.

“Navigating the logistics and nuances of having a national brand is tough right now due to the inability for legal states to export and import cannabis,” Robinson said. “Consumers want more consistency, and understandably so. Hopefully this measure gets passed, becomes law, and other states follow Oregon’s lead.”

With the Senate’s passage of SB 582, Oregon is at the front line for the battle to legalize cannabis imports and exports between states. If enough states pass cannabis export reform legislation, that could help tip the scales at the federal level, too.

If the measure does pass, Oregon’s cannabis exports may even one day go international. In his annual 4/20 call with reporters last month, US Sen. Earl Blumenauer, an Oregon Democrat, teased the idea of a North American cannabis compact—an international agreement that could one day open the door to legal cannabis trade between the US, Canada, and Mexico.

“The person who’s chairing the [Senate] Trade Subcommittee, I’m bringing some people together to talk this through,” Blumenaur said. “It’s something that needs to be unpacked. We’re kind of busy right now in a variety of areas, but it’s something I plan on exploring.”