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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 Williams is the first U.S. attorney to issue such guidance after Attorney General Jeff Sessions rescinded the Obama administration's guidance on pot-friendly states in January.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.

Confirmed Cases: 12438

Reported Deaths: 237
CountyConfirmedDeaths
Multnomah296672
Marion189354
Washington189221
Umatilla10418
Clackamas100628
Malheur4002
Union3692
Lincoln3615
Lane3093
Deschutes2680
Yamhill2059
Linn18210
Jackson1810
Polk17912
Jefferson1680
Morrow1541
Klamath1381
Wasco1171
Benton1156
Hood River1060
Douglas640
Josephine571
Clatsop550
Columbia540
Coos540
Lake240
Crook181
Tillamook160
Wallowa150
Baker120
Curry90
Sherman50
Gilliam20
Harney20
Grant10
Unassigned00
Wheeler00

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 333357

Reported Deaths: 7089
CountyConfirmedDeaths
Los Angeles1363573824
Riverside25748550
Orange25255424
San Diego19929422
San Bernardino19502307
Fresno828288
Imperial7977136
Alameda7976148
San Joaquin698870
Kern660198
Santa Clara6542167
Tulare5942152
Sacramento571483
Stanislaus497351
Contra Costa485290
San Francisco459050
Ventura424653
San Mateo4045112
Santa Barbara393131
Marin370232
Kings297039
Monterey279018
Solano207528
Merced188412
Sonoma181916
Placer111411
San Luis Obispo10065
Yolo92928
Madera8938
Santa Cruz5693
Napa5184
Lassen4280
Sutter4034
San Benito3622
Butte3384
El Dorado3070
Shasta2006
Yuba1983
Glenn1760
Humboldt1654
Nevada1631
Mendocino1320
Lake1211
Colusa1130
Tehama1071
Tuolumne730
Calaveras670
Del Norte610
Mono521
Siskiyou410
Amador400
Inyo351
Mariposa321
Plumas190
Alpine20
Trinity20
Sierra10
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