SALEM-Medical marijuana dispensary owners pleaded Thursday with legislators to allow them to sell to recreational pot users once the drug becomes legal on July 1.

“We don’t know a single dispensary doing well in this over-saturated market,” said Meghan Walstatter, who along with her husband Matt owns a dispensary in Northeast Portland.

She called early sales of recreational marijuana a “much-needed lifeline” for the dispensaries.

The Oregon Health Authority has approved licenses for 310 dispensaries and another 93 are pending, according to a June 12 tally

In Portland, more than 130 dispensaries have been approved, and one consultant, Sam Chapman said only a small number are making money.  He said it could lead to a big shakeout with only a few large businesses left standing.

“If we truly want to keep this a craft industry and we want to empower the mom and pop businesses to be able to survive in this industry, we need to have early recreational sales,”  said Chapman, who works with many marijuana firms.  “A lot of these businesses are starting to drown.”

The House-Senate marijuana committee is considering legislation that would allow dispensaries to sell a limited number of marijuana products to recreational users while the Oregon Liquor Control Commission gears up its own retail network.

OLCC officials have said they won’t be ready to license retailers until the latter half of 2016, more than a year after possession of marijuana becomes legal for 21-and-over adults. Many dispensary owners say they hope to eventually move into the recreational business.

The OLCC’s slow start to retail sales – the Measure 91 initiative legalizing marijuana contemplated sales taking place as early as January of 2016 – has led several lawmakers to say that recreational users should have a legal way to buy marijuana starting as close to July 1 as possible.

“We need to ensure we take every reasonable step to stop black market sales,” said Sen. Floyd Prozanski, D-Eugene, calling for “as early a start as we can” to recreational sales.

The Wallstatters, who grow medical marijuana and own the Pure Green dispensary on Northeast Sandy Boulevard, were among several industry representatives who said the state should  try to help preserve locally owned businesses while they are waiting for the OLCC to establish a full-scale recreational marijuana market.

Matt Wallstatter, a founding member of the Oregon Cannabis PAC, said a gold-rush fever attracted several people into the dispensary business once the state began licensing them in early 2014 and overall legalization of marijuana appeared on the horizon.

A lot of people thought, “it’s marijuana, it’s going to be lucrative” and jumped into the business without much further thought, he said.

Wallstatter said dispensaries are now limited to a market of about 71,000 medical marijuana cardholders, and the ability to serve the adult market could more than double their sales.

Under amendments being considered by legislators, recreational users would be limited to buying no more than a quarter-ounce of dried marijuana and would not be able to purchase many of the other products that dispensaries carry, in particular marijuana-laced foods.  Legislators debated Thursday over whether they should start sales before they are able to get a tax system up and operating, which could delay a temporary sales program until the fall.

Some marijuana business representatives also urged legislators to allow early sales of a variety of other marijuana products, including seeds and extracts, a concentrated form of the drug.

Donald Morse, director of the Oregon Cannabis Business Council, said he didn’t think many dispensaries would survive regardless of whether the Legislature approves early sales.

“I just feel bad for the little guys coming in and thinking they’re going to get rich,” said Morse, who also owns Southwest Portland’s Human Collective dispensary, which opened well before dispensaries were licensed by the state.

Morse said he thinks there will be a surge in demand after July 1 and that many people will obtain pot from friends who have medical marijuana cards and that it is better to provide consumers with a legal way to acquire it.

Rep. Ann Lininger, D-Lake Oswego, said after the meeting that “we’re not trying to eliminate natural competition in the market, but we are trying to discourage the black market.”

She said she did not want to rush into an early sales program that did not end up operating smoothly.

“I want an early start,” she said, “not a reckless start.”

–Jeff Mapes

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