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Oregon's Prosecutor Points to Massive Pot Overproduction Problem

The black market for marijuana is thriving in Oregon and an oversupply of weed from growers is flowing to more than two dozen states where pot remains illegal, a top federal law enforcement official said Friday.

Posted: May 18, 2018 3:40 PM

By GILLIAN FLACCUS , Associated Press

PORTLAND, Ore. (AP) — The black market for marijuana is thriving in Oregon and an oversupply of weed from growers is flowing to more than two dozen states where pot remains illegal, a top federal law enforcement official said Friday.

U.S. Attorney Billy Williams said the state has a "significant overproduction" problem and that he would prioritize enforcement of overproduction, interstate trafficking, organized crime and cases involving underage marijuana use and environmental damage from illicit pot farms.

The comments, which echoed those he made earlier this year, were included in a memo that outlines his plans for enforcing federal drug laws in a state with legalized marijuana. Williams is the first U.S. attorney to issue such guidance after Attorney General Jeff Sessions rescinded the Obama administration's guidance on pot-friendly states in January.

"As the primary law enforcement official in Oregon, I will not make broad proclamations of blanket immunity from prosecution to those who violate federal law," he wrote.

Sessions asked federal prosecutors to determine marijuana policies for their districts, prompting Williams to convene a summit in Portland earlier this year to discuss the state's oversupply problem. At the time, Williams also penned an editorial that described a glut of marijuana making its way out of the state illegally and called for action by local and state leaders.

Those in the marijuana industry reacted with cautious optimism to the memo and said it didn't seem to change federal marijuana policy in Oregon.

"I think that's already what law enforcement was focusing on and we need to crack down on the illegal grows out there, which is not good for the legal market either," said Brent Kenyon, who runs a consulting business that helps entrepreneurs set up pot businesses.

"I applaud him for not wasting any taxpayer dollars on trying to mess with the legal system as it's set up."

The state currently has nearly 1 million pounds (453,592 kilograms) of marijuana flower in inventory, a staggering amount for a state with a population of 4.1 million people. That doesn't include 350,000 pounds (158,757 kilograms) of marijuana edibles, tinctures and concentrates.

The retail price for a gram of pot has fallen about 50 percent since 2015, from $14 to $7, according to a report by the Oregon Office of Economic Analysis. Legal growers and retailers alike have felt the sting.

The true amount of marijuana leaving the state is hard to pin down, said Beau Whitney, a senior economist at New Frontier Data, a national cannabis analytics firm.

The state has 21 million square feet (195 hectares) of legal marijuana growing and a $1 billion market statewide, he said. Of that, about one-third — or about $300 million — is diverted to the illegal market within the state, but it is not clear how much is leaving Oregon, he added.

The amount being grown legally is "more than enough to handle all of the demand in Oregon and so to me, it's no wonder that there's excess supply in the space. What people choose to do with it, it's tough to estimate," Whitney said.

"They're saying, 'If you're exporting, then we're going to come down on you."

To that end, Williams said Oregon needs to do a better job at gathering data about the marijuana industry and devote more resources to enforcement and oversight. Federal prosecutors have finite resources in Oregon, he wrote, and they will "strategically consider" which cases to pursue, in some cases favoring asset forfeiture and other civil punishments over criminal prosecutions.

Entrepreneurs who have successfully navigated the oversupplied market said they hoped Williams' approach wouldn't jeopardize their state-legal businesses. William Simpson, founder of Chalice, will soon open his seventh retail store in Oregon and is hoping to expand into California, Nevada and Canada.

"I'm fearful with this oversupply it basically puts a lot of people in a desperate situation ... and it forces them to do illegal things. What that's going to do is bring a microscope by the federal government over the state of Oregon," he said.

"It can put the whole thing in danger. I think we're past that point, but we definitely don't want to give them a reason to rethink that."

____

Flaccus is a member of AP's marijuana beat team. Follow her on Twitter at https://twitter.com/gflaccus. Follow complete AP marijuana coverage: https://apnews.com/tag/LegalMarijuana

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 139355

Reported Deaths: 1904
CountyCasesDeaths
Multnomah29403466
Washington19370183
Marion16840250
Clackamas12186142
Lane8850113
Jackson723497
Umatilla702874
Deschutes528341
Yamhill333851
Linn322950
Malheur321755
Polk259940
Klamath256848
Josephine186836
Benton184614
Douglas180547
Jefferson173925
Union115817
Wasco112723
Columbia108218
Lincoln104417
Coos102116
Hood River99423
Morrow96810
Clatsop7185
Crook66914
Baker5835
Tillamook3732
Curry3275
Lake2605
Grant2171
Harney1906
Wallowa1003
Gilliam531
Sherman480
Wheeler201
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Cases: 3235045

Reported Deaths: 38268
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San Bernardino2685421719
Riverside2668492970
Orange2391752768
San Diego2300662421
Santa Clara991741278
Kern91119591
Fresno863361084
Sacramento846531194
Alameda71298906
Ventura67066546
San Joaquin60545844
Contra Costa55593492
Stanislaus49500803
Tulare43574542
Monterey38434261
San Mateo34510356
San Francisco30734293
Santa Barbara27149267
Solano27141118
Imperial25745510
Merced25743332
Sonoma25160251
Kings20223161
Placer18034188
San Luis Obispo17151161
Madera14068175
Santa Cruz13088136
Marin12067166
Yolo11276146
Shasta10144132
Butte9865136
El Dorado824566
Sutter812984
Napa807050
Lassen530916
San Benito523851
Yuba522730
Tehama456446
Tuolumne351241
Nevada339473
Mendocino332236
Amador307433
Lake272932
Humboldt265227
Glenn202822
Colusa19079
Calaveras171323
Siskiyou150413
Mono11454
Inyo105329
Del Norte8783
Plumas6185
Modoc3924
Mariposa3575
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