As Oregon struggles with an oversupply of marijuana on its recreational market, it has emerged that the law under which adult-use marijuana was legalized bans the sale of cannabis byproducts out of state.
This information was revealed by Caleb Mata, the CEO of Oregon Genetics. Mata raised this issue when he was speaking at a listening event organized in July by the Oregon Liquor Control Commission (OLCC).
OLCC says that under the current law in the state, every product that is derived from marijuana is regarded as marijuana, and that is why it cannot be legally transported or sold out of state. This rule also applies to cannabis byproducts, such as the terpenes Mata talked about, which don’t contain any THC.
Mata believes that the state trapped itself when it passed such a provision in its law because the marijuana industry will struggle to survive if such clauses remain in the laws regulating the industry.
He is convinced that allowing the cannabis industry in Oregon to sell terpenes (cannabis flavors that can be obtained by distilling the plant) and other byproducts free from THC may provide a lifeline to fixing the glut on the Oregon marijuana market.
Terpenes attract high prices online because they can be added to CBD products in states where marijuana is still illegal. The current practice has been to use terpenes which have been extracted from other plants, but marijuana terpenes are distinct and offer a better experience to the users of the products in which these terpenes have been added.
The market for terpenes is unlikely to face the same oversupply challenges that the market for cannabis flower and related products is facing for two key reasons.
The first, as already mentioned, is that marijuana is still illegal in many states and those provide a regular market for terpenes to be added to CBD products.
Secondly, terpenes are volatile and are usually lost as marijuana concentrates, oils and other extracts are being processed. These flavors must then be added after the extraction process, and that means that there will always be a market for the terpenes.
Hugh Palcic, an OLCC commissioner, admitted that Caleb Mata and other members of the industry have a legitimate concern which can only be addressed by reviewing the existing law so that necessary amendments can be made. He added that OLCC is open to any ideas and recommendations that could be beneficial to the industry in Oregon.
It isn’t yet clear to industry analysts how marijuana industry players like Green Hygienics Holdings Inc. (OTCQB: GRYN) and Hemptown USA regard the long-term viability of the market for marijuana terpenes.
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