Last week, I spoke on an Oregon Business Magazine panel regarding the state of the Oregon cannabis industry. The event drew a diverse group of industry entrepreneurs, investors, consultants and observers, despite its 7:30 a.m. start. The panel also covered an array of topics, from state and federal regulation, to product branding and marketing, to growth opportunity areas, to outside investment. Here is a recap of each.
How are state and federal regulations impacting the growth of the Oregon marijuana market?
At the state level, Oregon is as good as it gets for a cannabis market today. Paradoxically, it isalsoover-regulated. The Oregon Liquor Control Commission (OLCC) oversees the recreational program and the Oregon Health Authority (OHA) runs the medical show. Oregon could do without two state agencies governing the comings and goings of one little plant, a point we have been driving home on this blog for a while. Nowadays, it seems like OHA is just going through the motions, perhaps with the idea that the legislature will combine the two programs in 2017. Heres hoping.
Administrative structure aside, Oregon is a welcoming cannabis theater. It was the first state to do away with residency requirements for pot business ownership, and it is the easiest state in which to acquire a recreational marijuana license. There are no limits on the number of licenses awarded in any category or overall, and no requirement that applicants be especially well capitalized or vertically integrated. If you want to run a cannabis business in Oregon, you probably can.
At the federal level, Oregon cannabis business owners have the same problems as pot ventures in other states: oppressive federal taxation, limited banking options, limited branding protection, and a lack of access to bankruptcy courts. Lets hope that, given the number of new pot states about to come online, we find some banking and taxrelief on the horizon.
How do you brand product and beat the competition?
This is a great question. From a legal and compliance perspective, it is important to remember that cannabis merchants generally cannot acquire federal trademarks. That does not mean, however, that a cannabis business should not refine, promote and try toprotect its brand. State trademark is still an option in Oregon, and licensing is a key industry concept. From the initial stages of product branding, industry players should realize that all design elements will need to conform to state packaging and labeling requirements, if the product will transfer to consumers. Advertising rules are also important.
What products and markets will see the most growth?
Consensus among the panel was that the boomer generation would continue to expand rapidly as a consumer base, and products such as edibles and topicalsand anything that neednt be smokedwould be key drivers. From our perspective, ancillary industry players, like our many clients who function as service providers, platform builders, and cannatech operators, will ...