Portland Vies With Nearby Washington As Oregon Enters the Legal Marijuana Industry
The three young men climbing into the pickup truck close to the Oregon border cheerfully acknowledged they were about to break federal law. But they won’t be doing it for much longer.
Anthony, Daniel and Chris bustled out of a marijuana shop in Vancouver, Washington, clutching bags of weed as they headed home a short drive over the bridge to Portland, Oregon.
Crossing state lines with drugs is a federal offence but that has not discouraged the steady stream of customers from Portland taking advantage of Washington’s legalisation of recreational marijuana sales last year.
But starting on Thursday, Oregon joins Washington in permitting the sale of marijuana for recreational use to anyone over the age of 21.
“I’ve been coming across since they legalised it here,” said Anthony. “But it’ll be closer and it’s going to be much more cheaper in Portland. And I won’t have to cross the bridge. Not that I’ve ever seen the cops lining up to catch us.”
The open sale of recreational marijuana has come more swiftly to Portland than many expected. Legalisation was only approved in a ballot measure last November whereas Washington state took 18 months to open its first shops.
To speed up the process, Oregon has approved recreational sales through existing medical marijuanadispensaries, bypassing lengthy background checks which have slowed the roll-out across the state line.
But it caught off-guard many of the dispensary owners who did not expect open sales to begin until the middle of next year.
Mike Chappell, owner of Silver Stem Fine Cannabis in Portland, used to own a marijuana store in Colorado, which legalised sales last year.
He said that whereas several dozen stores opened on Colorado’s first day of legalization, “in Portland we’re looking at 130, if not more, that are eligible to sell recreational marijuana,” he said. “We have no idea what’s going to happen, if we should expect a big line on the first day. It’s going to be the first time you can access it legally within a couple of blocks of your house. ...We’re planning to see 200 customers a day if not a little more than that. But maybe nothing happens. We’re gearing up for the line but it’s unknown.”
If Vancouver, Washington, is anything to go by, Chappell’s shop is going to be busy. The three young men were shopping at the New Vansterdam marijuana shop where its marketing director, Shon Harris, said they have about 1,000 customers a day between two outlets. Nearly 300 items are listed on a “menu” from marijuana leaf to an array of edibles including sweets.
“People dabble,” he said. “People are becoming more open to the idea now that it’s been legal in Washington.”
Outside, the number plates of cars reveal the diversity of its customers. Alongside those from Washington are Oregon, Alabama and Utah plates. “We’re the closest store to PDX (Portland airport),” said Jim Mullen, co-owner of The Herbery marijuana store in Vancouver. “They come straight from the airport to here. They still have suitcases in the car. Mostly on the weekends, from everywhere.
“It’s crazy. You have the United States of America but we’re not united on this by a long shot when you can go to jail in Texas for having a joint but come here and buy it freely. You can fly with it out of PDX to any other city in Oregon, legally.”
But the bulk of Mullen’s out-of-state business comes from Portland and the start of open sales in Oregon is a threat to the income of a significant proportion of marijuana sales at shops in Vancouver.
Washington outlets will be at a disadvantage not only because Portland residents will be able to buy legally just up the road without the admittedly small risk of being arrested for breaking federal law, but also on price.
Washington imposes a tax of 37% on marijuana sales which brought the state close to $70m in revenue to July. Oregon will charge just 25% when taxes kick in in January. Until then, there will be no tax at all. That is likely to price marijuana in Portland well below that in Vancouver, although legal sales in both places are more expensive than on the black market.
Mullen said Washington marijuana stores still have one advantage. For now, only marijuana plant will be on sale in Oregon whereas he sells it in many other forms, including foods.
“Worst case scenario is we’re going to see about a 35% drop in business but there are a number of people that come over to Washington to buy edibles, concentrates and vape cartridges which are products that the Oregon stores are not going to be able to sell for another year,” he said.
Daniel said he could find cheaper marijuana on the black market but it wasn’t worth the trouble. “People are tired of being ripped off on the street. And in the shop you get a lot more variety. It’s all about the flavour, the selection,” he said.
Although the black market is cheaper, Mullen said many people don’t want to go there.
“You’ve got people who are older that smoked in college and now that it’s legal they’re getting back into it but don’t have any connections to buy. And you’ve got a great variety of products in the retail stores. You’ve got edibles. You’ve got concentrates. You’ve got flower. You’ve got 50 different strains of flower. We’re like Macy’s for marijuana. It’s not the black market. It’s safe,” he said.
Still, the marijuana business faces problems even though it is now legal under state law.
For a start, there are strict limits on advertising. Marijuana sales cannot be promoted on radio or television.
While the drug remains illegal under federal law, the Internal Revenue Service still wants its share of taxes on the business. But because marijuana is a Schedule I drug under the federal Controlled Substances Act, shops cannot claim the normal business deductions, such as rent and the cost of labour.
Major banks refuse to deal with marijuana businesses. In Oregon and Washington they bank through local credit unions but that still means they can only accept cash because the big banks control the credit card industry which creates additional security risks. Mullen thinks all this will change in time.
“There are a lot of people who don’t like it. They are paranoid about it, they think it’s still the devil’s drug. But there is an inevitably. When states are voting to legalise medicinal use, that’s a quantum leap forward from where we’ve been. I think there’s without question a groundswell across the United States for the legalisation of this product,” he said. “It’s a new industry. Someday Costco and Walmart will take over but I was hoping to get about a decade out of it for the industry to get a lot of small businesses established because this is generating so many jobs and so much revenue. It’s great not to have the big corporations involved.”