Oregon lawmakers are readying the state for a future where interstate cannabis commerce isn’t just a pie-in-the-sky fantasy. The Senate Judiciary Committee advanced a bill to the Senate floor that would grant the governor authority to enter into interstate compacts for cannabis sales with other states where cannabis is legal. The bill would only become effective, though, at such time when federal laws or guidance allows for interstate transfers.
Every state that has legalized cannabis, whether medical or recreational, has to play in its own sandbox. Although the Department of Justice has taken a hands off approach to states operating legal cannabis industries within their own borders, moving cannabis across state lines is still a no-no. Yes, even for contiguous states like Washington, Oregon or California. Oregon U.S. Attorney Billy Williams has already made his opposition to Oregon cannabis exports clear.
The limits of Intrastate markets are obvious, and states where cannabis is abundant are already running into their own consumption limits. Case in point: it would take Oregon six years to consume all of the cannabis it has already produced.
Oregon is playing the long game here. The Trump administration has already taken a step backwards by rescinding the 2013 Cole Memorandum that provided DOJ guidance on legal cannabis states. Former Attorney General Jeff Sessions, whose opposition to cannabis was thankfully slowed down by, well, other concerns during his tumultuous term as AG, pulled the plug on the Cole Memorandum in 2018.
So where does that leave us now? Probably waiting until after 2021. Although informal and non-binding, the Cole Memorandum at least offered states an understanding of DOJ expectations and priorities. Current Attorney General William Barr, like his predecessor, has other preoccupations.
Legislative fixes are also a possibility, like the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act. Not going so far as to federally legalize cannabis, the STATES Act looks more like a legislative version of the Cole Memorandum, clarifying the rights of states to pursue their own rules for cannabis legalization. The bill, introduced by Sens. Elizabeth Warren (D-MA) and Cory Gardner (R-CO), does have bi-partisan support and President Trump has at least once expressed a willingness to sign it should the bill arrive on his desk.
Even if something happens at the federal level to trigger Oregon’s approval of interstate cannabis sales, other states would have to be on board, too. Very few states can produce cannabis as cheaply as Oregon, or as plentifully, which puts Oregon in at an advantage that could price out other states’ producers. What incentive does California have to allow importing Oregon cannabis at the expense of neutering its own producers?
And then there are issues of quality control, tax revenues, and modes of transport that would need to be ironed out. That kind of framework would require massive regulatory cooperation between states, and those conversations haven’t even started yet.