Industrial hemp will take a bite out of Oregon's outdoor cannabis in 2019

Hemp is set to eat into Oregon’s 2019 outdoor cannabis production, potentially slowing the state’s accumulation of excess cannabis inventory that now exceeds 1 million pounds of unsold product. From 2016 to 2018, the number of licensed hemp producers in Oregon jumped from 13 to 584. Statewide acreage devoted to hemp production likewise more than doubled to 7,808 acres last year from 3,469 in 2017. We’re poised to see that number climb higher now that the 2018 Farm Bill has granted hemp federal legality that still eludes cannabis.

It’s not just Oregon jumping on the hemp bandwagon, either. Hemp production is booming across the country. Nationwide acreage devoted to hemp production tripled from 25,713 acres to 78,176 in 2018. Tennessee just reported an 1,100% increase in licensed hemp farmers. And the Iowa Senate overwhelmingly approved new industrial hemp rules 49-1 this week.

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How to solve a problem like the cannabis supply chain

“The black market had many drawbacks but it did a better job of balancing supply and demand nationally than the regulated market has so far.” This line from the Stamford Advocate resonated with me today as I was digesting the day’s feed of cannabis news. As we continue to adjust to an over-supplied Oregon market sitting on a million pounds of unsold inventory, it’s easy to reminisce about what we lost in the transition to recreational cannabis markets.

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SAFE Banking Act brings new life to federal banking for cannabis companies

Federal cannabis banking solutions took another small step towards reality last week when the House Financial Services Committee approved the SAFE Act (Secure and Fair Enforcement) 45-15 for a vote on the House floor. With widespread Democratic support, the bill, introduced by Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA) is expected to pass the House easily. The bill’s fate in the Republican controlled Senate is less certain, but bipartisan support may drive Senate Majority Leader Mitch McConnell to at least allow the bill to the Senate floor for a vote.

The SAFE Act would be a boon to the cannabis industry. Legal (state, if not federal) cannabis businesses have had limited access to state chartered credit unions for a few years, but the possibility of federal criminal liability for money laundering has kept big banks out of the cannabis game. And in states with limited banking options, that means many cannabis businesses are still dealing in cash, with all of the associated risks that large cash transactions bring.

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