The Oregon Senate approved Senate Bill 582. SB 582 would allow Oregon to enter into agreements with other states where cannabis is legalized and export product to those markets. However, the allowances of the measure would only become active in light of a change in federal policy, which does not appear as if it will be forthcoming this year. As a result, even if SB 582 is passed into law in the coming weeks or months, Oregon’s surplus inventory will almost certainly be forced by law to remain in-state into 2020, if not longer. The bill will now move to the state House for consideration.
Still, the passage of SB 582 may result in Oregon market participants altering their approaches to production, processing, and inventory management. With the ability to export in the future secured – at least in the eyes of their state’s government – cultivators that have scaled back production in recent growing seasons may feel more confident in farming cannabis to process into extracts and other more stable products for sale in the future.
Official sales and unsold inventory figures from the Oregon Liquor Control Commission (OLCC) indicate that significantly more plant material was processed into extracts and other products in Q1 2019 compared to Q3 2018. Additionally, April’s monthly harvest volume was up notably year-over-year for the first time in at least six months.
Again, it is highly unlikely that the passage of SB 582 will open up new markets for Oregon’s cannabis producers and processors in 2019. Yet it may impact the decisions of growers and processors in the near term, potentially resulting in greater available supply for in-state buyers ahead of out-of-state exports being permitted.