5 ms·

I grew up in Ashland (visiting there right now, in fact) and have family who funded one of the first marijuana companies in the state. Some problems were bad b

I grew up in Ashland (visiting there right now, in fact) and have family who funded one of the first marijuana companies in the state. Some problems were bad behavior from legal growers, but I'd argue the bigger problems were caused by regulatory and oversight failures from OLCC and enforcement of existing laws on illegal grow operations. 1) OLCC allowed for way too many grow license at first. For a state of 4.3 million, you have a serious upper bound to how much the legal market can support. There was some discussion about weed tourism, and a bit of work to allow legal interstate sales between Washington and California, but nothing really materialized. 2) A plant could produce $500+ in product, but it cost tens of thousands of dollars per acre just to get your plants in the ground. That's not including harvesting, drying, trimming, and storage. Given that there's no crop insurance, if anything goes wrong you're easily a couple hundred thousand in the hole. 3) OLCC often added regulations mid-grow, after it was impossible to effectively respond. This included things such as dropping the batch size for a test (which costs hundreds of dollars per run) down to 10lbs per batch. This sort of uncertainty, the oversupply of licenses, and the huge up getting operational costs made it financially impossible for a lot of farms to break even. I don't condone it, but I do understand why a lot of folks under reported yield and sold part of their harvest in other states. 4) A lot of the truly bad actors we're organized crime rings moving in (Russian mob and Yakuza from what I heard). They got a hemp license and grew marijuana illegally (usually having a few hemp plants in case a state tester came to the grow site). Local law enforcement knew about it, but they were literally out manned and out gunned. The feds eventually offered support, but it took a while. Folks understandably freaked out, but OLCC mainly used the mob as a pretense to try to wrestle hemp regulation away from the ODA (which they have been trying to do for years) rather than acknowledge that this was an enforcement problem, not a regulatory problem.

jefftk 4y ago
On (1) I'm don't see how limiting the number of growers was, or should have been, within OLCC's role. When governments try to match supply to demand this way it generally goes very poorly in the best case (ex: certificate of need requirements for opening hospitals, federal marketing orders limiting production) and runs into regulatory capture in the worst case (ex: increasing the entry requirements for professions to boost wages). The people best included to make good decisions on how much to produce were the growers and their investors, with their own time and money on the line.
- mind-blight 4y ago
  Whether you agree with it or not, OLCCs role is to regulate the entire market - including supply and demand. They do the same thing with liquor. Oregon is a controlled liquor state where everything sold has to move through the government. I think they're draconian and heavy handed, but it's absolutely part their job. Philosophically, I agree with limiting the supply via regulation and licensing for at least the first few years. Everything else was already highly regulated: it's a schedule 1 substance that can't be sold out of state and can only be sold to 21+ in state. Some of the biggest players in the existing black market were the Mexican cartels, and they absolutely were trying to take advantage of the legal status to hide illegal activity. Nothing about that market says it will go well with an immediate free-for-all. Long-term that may be ok, but short term that was just unrealistic
dsfyu404ed 4y ago
>you have a serious upper bound to how much the legal market can support. Demand is very much elastic in response to price.
- mind-blight 4y ago
  That's true until the market is saturated. Most consumers aren't going to double their consumption if price falls by half - unless you're basically an addict, there are diminishing returns to consumption. Oregon grew way more than the state would ever consume, regardless of price for multiple years.
  - dsfyu404ed 4y ago
    Saturated at what price point though? Until you can get high as cheaply as you can get your hands on a six pack of beer I don't thing we'll see demand plateau.
    - mind-blight 4y ago
      Some years, I'd argue you would struggle to move all of the product if it was even free. I don't think you understand just how much weed was produced in Oregon. You're speaking generally, so don't know if you're taking into consideration the specifics of the Oregon market. Total US demand has very little impact on the legal Oregon market, except to encourage more legal growers to sell part of their crop black market in other states. Oregon produced so much that even releasing the pressure valve that way didn't stop the market from cratering. And, at the very least, the market was saturated below the break even point for production. The retail price didn't completely crater because dispensaries limited the supply based on their location, but a lot of producers could not move their product in the legal market and were left twiddling they're thumbs
jMyles 4y ago
I love Ashland. The lithia water is some of my favorite water I've ever encountered. I have occasionally wondered: is it possible to buy land there with a well that produces that amazing water? I have looked around the area of emmigrant creek and the gun range, from which the water is apparently piped? I'd love to know more about this. I think about this water often.
- alexose 4y ago
  This makes me so happy. I'm not sure I've ever met anyone who actually enjoys Lithia water! I'm not the expert, but you might check out Colestin. There was once a resort there built during the heyday of "healing" mineral waters. Land is cheap, although it is quite remote and extremely prone to wildfire. https://www.livinggoldpress.com/TakingtheWaters.htm https://www.livinggoldpress.com/TakingtheWaters.htm
alexose 4y ago
Hey Ashlander! I'm out in the Applegate (as you probably could have guessed). Thank you for adding some more nuance to my post. I agree with everything you've written here. It matches my understanding of what happened despite my earlier oversimplifications. There were compounding problems, but I think the story to be told is one of ineffective regulation and underenforcement. The regulators just didn't have a complete understanding of the industry, which introduced loopholes large enough to drive a Mexican cartel-sized truck through. Better representation from industry might have helped, but it's hard to say. In their defense, the market changed underneath everyone. Keep in mind that there was virtually no public awareness of CBD until after it became legal to farm (https://trends.google.com/trends/explore?date=all&geo=US&q=cbd https://trends.google.com/trends/explore?date=all&geo=US&q=c...). The wink-wink nudge-nudge "hemp" growers knew this, and moved with incredible speed to farm as many acres as possible before the regulators caught up. Somewhat like flooding a small town with Bird scooters in the middle of the night. I'm not saying the industry was perfect beforehand, but it was mostly fine until it became clear that there would be a 1-3 year window for growers to extract maximum profits. At this point the whole valley got ground up in the mighty garbage disposal of capitalism.
- mind-blight 4y ago
  I was guessing either out there or one of the ones vineyards just outside Ashland :). > The wink-wink nudge-nudge "hemp" growers knew this, and moved with incredible speed to farm as many acres as possible before the regulators caught up. That's super fair. The ODA wasn't culturally equipped to tell whether a company was a cartel front or a legitimate business. Really nice folks, but way outside anything they had experienced. I don't think OLCC would have done any better though. The regulatory response also made 0 sense to me: grandfather in existing hemp growers and block anyone new. That just locked in the people they were trying to get rid of > it was mostly fine until it became clear that there would be a 1-3 year window for growers to extract maximum profits. At this point the whole valley got ground up in the mighty garbage disposal of capitalism. Oof. That, sadly, hits the nail on the head. The folks who were in it for the long term or more than just the money got eaten alive, and then the bubble popped.

jefftk 4y ago

On (1) I'm don't see how limiting the number of growers was, or should have been, within OLCC's role. When governments try to match supply to demand this way it generally goes very poorly in the best case (ex: certificate of need requirements for opening hospitals, federal marketing orders limiting production) and runs into regulatory capture in the worst case (ex: increasing the entry requirements for professions to boost wages). The people best included to make good decisions on how much to produce were the growers and their investors, with their own time and money on the line.

mind-blight 4y ago
Whether you agree with it or not, OLCCs role is to regulate the entire market - including supply and demand. They do the same thing with liquor. Oregon is a controlled liquor state where everything sold has to move through the government. I think they're draconian and heavy handed, but it's absolutely part their job. Philosophically, I agree with limiting the supply via regulation and licensing for at least the first few years. Everything else was already highly regulated: it's a schedule 1 substance that can't be sold out of state and can only be sold to 21+ in state. Some of the biggest players in the existing black market were the Mexican cartels, and they absolutely were trying to take advantage of the legal status to hide illegal activity. Nothing about that market says it will go well with an immediate free-for-all. Long-term that may be ok, but short term that was just unrealistic

dsfyu404ed 4y ago

>you have a serious upper bound to how much the legal market can support. Demand is very much elastic in response to price.

mind-blight 4y ago
That's true until the market is saturated. Most consumers aren't going to double their consumption if price falls by half - unless you're basically an addict, there are diminishing returns to consumption. Oregon grew way more than the state would ever consume, regardless of price for multiple years.
- dsfyu404ed 4y ago
  Saturated at what price point though? Until you can get high as cheaply as you can get your hands on a six pack of beer I don't thing we'll see demand plateau.
  - mind-blight 4y ago
    Some years, I'd argue you would struggle to move all of the product if it was even free. I don't think you understand just how much weed was produced in Oregon. You're speaking generally, so don't know if you're taking into consideration the specifics of the Oregon market. Total US demand has very little impact on the legal Oregon market, except to encourage more legal growers to sell part of their crop black market in other states. Oregon produced so much that even releasing the pressure valve that way didn't stop the market from cratering. And, at the very least, the market was saturated below the break even point for production. The retail price didn't completely crater because dispensaries limited the supply based on their location, but a lot of producers could not move their product in the legal market and were left twiddling they're thumbs

jMyles 4y ago

I love Ashland. The lithia water is some of my favorite water I've ever encountered. I have occasionally wondered: is it possible to buy land there with a well that produces that amazing water? I have looked around the area of emmigrant creek and the gun range, from which the water is apparently piped? I'd love to know more about this. I think about this water often.

alexose 4y ago
This makes me so happy. I'm not sure I've ever met anyone who actually enjoys Lithia water! I'm not the expert, but you might check out Colestin. There was once a resort there built during the heyday of "healing" mineral waters. Land is cheap, although it is quite remote and extremely prone to wildfire. https://www.livinggoldpress.com/TakingtheWaters.htm https://www.livinggoldpress.com/TakingtheWaters.htm

alexose 4y ago

Hey Ashlander! I'm out in the Applegate (as you probably could have guessed). Thank you for adding some more nuance to my post. I agree with everything you've written here. It matches my understanding of what happened despite my earlier oversimplifications. There were compounding problems, but I think the story to be told is one of ineffective regulation and underenforcement. The regulators just didn't have a complete understanding of the industry, which introduced loopholes large enough to drive a Mexican cartel-sized truck through. Better representation from industry might have helped, but it's hard to say. In their defense, the market changed underneath everyone. Keep in mind that there was virtually no public awareness of CBD until after it became legal to farm (https://trends.google.com/trends/explore?date=all&geo=US&q=cbd https://trends.google.com/trends/explore?date=all&geo=US&q=c...). The wink-wink nudge-nudge "hemp" growers knew this, and moved with incredible speed to farm as many acres as possible before the regulators caught up. Somewhat like flooding a small town with Bird scooters in the middle of the night. I'm not saying the industry was perfect beforehand, but it was mostly fine until it became clear that there would be a 1-3 year window for growers to extract maximum profits. At this point the whole valley got ground up in the mighty garbage disposal of capitalism.

mind-blight 4y ago
I was guessing either out there or one of the ones vineyards just outside Ashland :). > The wink-wink nudge-nudge "hemp" growers knew this, and moved with incredible speed to farm as many acres as possible before the regulators caught up. That's super fair. The ODA wasn't culturally equipped to tell whether a company was a cartel front or a legitimate business. Really nice folks, but way outside anything they had experienced. I don't think OLCC would have done any better though. The regulatory response also made 0 sense to me: grandfather in existing hemp growers and block anyone new. That just locked in the people they were trying to get rid of > it was mostly fine until it became clear that there would be a 1-3 year window for growers to extract maximum profits. At this point the whole valley got ground up in the mighty garbage disposal of capitalism. Oof. That, sadly, hits the nail on the head. The folks who were in it for the long term or more than just the money got eaten alive, and then the bubble popped.