Welcome the ninth annual “State of the State” post on Oregon cannabis. I feel like an old man. As compared to 2023, things this year were pretty mellow. That’s not to say, however, that we don’t have trends, intrigues, controversies, mysteries, etc., worth writing about. Let’s dive right in.

Sales and market data

According to OLCC data, retail sales between January 1, 2024 and November 30, 2024 clocked in at $881 million. That is remarkably consistent with 2023, where we saw $874 million over the same 11-month span. If things remain steady for the next couple of weeks, Oregon should avoid a third consecutive drop in annual sales.

Prices are also relatively static. The median price per gram in the extract/concentrate category was $15.83/gram in November, floating from $15.36 to $16.00 throughout the year. For “usable marijuana”, which includes dried flowers and leaves, prices fluctuated from $3.89/gram to $3.57/gram last month.

October saw Oregon’s largest METRC harvest, ever, with 5,733,288 pounds reported. I’m sure the illicit market had a bumper year too; weather is the same for everyone and the enforcement paradigm is static. Anyway, the October numbers equal 900,000 more pounds than the same month in 2023. Consumers may benefit, but that can’t be great for pricing.

As far as what people are actually buying at OLCC shops:

• 2% of purchases are for usable marijuana
• 25% are extracts/concentrates
• 7% are edibles/tinctures
• 10% are “inhalable product with non-cannabis additives”
• 4% is “other”; and
• 6% is industrial hemp commodity products.

Yes, that equals 100%. In 2023, I noted a “years-long trend of usable marijuana sales decreasing per capital in favor of other categories.” The trend continued in 2024 (usable marijuana sales dropped another 2.5% year over year). Last year, I wrote that “my impression is that near-term growth may be limited to select SKUs and product categories.” Still feel that way.

Licenses and licensing

Our years-long OLCC licensing moratorium was made permanent in 2024 (more on that below). Overall, license numbers declined marginally across the board. Here’s a table showing current numbers as compared to 2023, which I wrote “was the first year I saw license numbers fall since the 2016 roll-out of the adult use program.”

It’s good to see numbers dropping, I suppose. Most would agree that we have too many licenses across all categories– except perhaps for labs and research. Expect numbers to continue on a modest downward trend in 2025.

Industry limping along

In the last few State of the State posts, I’ve talked about businesses struggling. We’re still helping people sell or even walk away from things we helped them buy not long ago. In 2023, the big liquidation story was the Chalice receivership. In 2024, insolvency and cannabis receivership actions are still a regular occurrence. The largest of 2024 was the Tumalo receivership, which we structured here in the office, and which remains ongoing. We’re working on a few others as well: some are voluntary, and others, well, not so much.

Consolidation is still a fact of life in Oregon cannabis, with larger operators opportunistically picking up assets, mostly at retail. A majority of buy/sell transactions, however, seem to involve new market entrants and naked licenses. In these deals, a seller will relinquish its rights to an OLCC license in favor of a replacement license for the buyer— sometimes at the same location and sometimes in a new spot. Pricing on these transactions, which are styled as asset purchase agreements, has remained steady in each license class. That said, pricing can be negotiable.

Most of the bigger players are still around. A couple of people have asked me how that could be the case with a chain like La Mota, whose legal issues metastasized into a statewide controversy, and resulted in unwelcome tax compliance rules for OLCC retailers. The answer is simple: La Mota probably reached a deal on payment plan with the Department of Revenue. Elsewhere, we haven’t seen anything to convince us, one way or the other, that OLCC is making an effort to treat small businesses the same as the larger operators— a problem area we highlighted in 2023. That said, let’s see what happens with the labs.

OLCC chasing testing labs on THC inflation

On September 25^th, OLCC sent enforcement notices to seven testing laboratories. I explained at the time that OLCC had:

Propos[ed] license cancellation in some cases and suspension or fines in others. The notices center on alleged THC inflation, and extend back to instances identified in 2023. We only have eleven labs in Oregon accredited to do this mandatory work, so OLCC chasing seven of them is a big deal.

This saga is still ongoing, and none of these cases are resolved to my knowledge. For considered and lawyerly reasons, I’ll reserve further comment on this one, beyond all that I’ve already said.

New OLCC rules and legislative changes

Various rules took effect in 2024, due to legislative changes this spring and an initiative vote in the fall. Here are the four biggest developments for me, in chronological order:

Licensing Moratorium

Oregon finally made its licensing moratorium permanent, when Governor Kotek signed House Bill 4121 on March 20, 2024. This means the only way to acquire a cannabis license in Oregon is to find someone willing to sell. That will likely be the case forever, based on unreachable “new license triggers” in HB 4121, and the fact that the legislature won’t reverse this new law.

Hemp Vendor License Requirement

This one took effect July 1. At that time, I wrote that the rule was “very broad and likely to catch people off guard.” That proved to be the case in my experience, including with respect to OLCC— I ended up writing them on September 30 after stumbling across incorrect FAQs on the topic. My guess is that a large number of Oregon businesses are still unaware of the license requirement, and therefore not compliant, and that it doesn’t really matter because enforcement is sparse or nonexistent.

Labor Peace Agreements

This one has been a scramble, with many licensees having to find a way to comply on short notice. The short story is that due to Ballot Measure 119, which passed in November, all OLCC licensed retailers, processors and labs must provide a signed labor peace agreement (LPA) with a bona fide labor organization, to renew or apply for an OLCC license. I still believe BM 119 is legally problematic, but someone needs to challenge it to obviate the LPA requirement.

Presumptive Hemp Testing Rules

The Oregon Department of Agriculture (ODA) issued a temporary administrative order following on HB 4121, which defines presumptive marijuana under its testing rules, outlines procedures for marijuana disposal, and outlines violations of ODA hemp licensure more generally.

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We can expect to see more changes, as always, in 2025. OLCC is currently in rulemaking to implement HB 4121, to start. The 2025 legislative session next year is also a long one, lasting from January to June. I’ll write my usual session preview sometime in January, lest this post become extremely long. For now, the Cannabis Industry Alliance of Oregon (CIAO) has listed out is legislative priorities here.

Odds and ends

• 2024 must have been a welcome reprieve for OLCC, which remained mostly out of the spotlight after a trying year in 2023.
• Not much is going on with ODA and the hemp industry, beyond what I mentioned above.
• Shout-out to CIAO, which was organized and effective in its first full year as Oregon’s consolidated, cannabis trade group.
• Local cannabis banking is getting easier all the time. Most recently, we built out a cannabis banking program for Central Willamette Credit Union, the newest Oregon service provider.
• I’m still pessimistic about a federal cannabis banking bill, but I’m hopeful for federal rescheduling. A move for marijuana to Schedule III would do away with punitive tax code provision IRC § 280E – hopefully in calendar year 2024. That development would immediately increase margins for Oregon cannabis businesses, across the board.
• Also at the federal level, this was our last year with Earl Blumenauer, Congress’s greatest ever cannabis advocate.

Oregon cannabis: that’s a wrap

Let me know in the comments if you think I missed anything worth mentioning, or shoot me an email. There is always something. In the meantime, here’s hoping for smooth sailing for Oregon cannabis in 2025.

For previous posts in this series, check out the following:

Mushroom drops, often referred to as mushroom tinctures or extracts, have gained significant popularity in recent years due to their potential health benefits. These liquid extracts harness the power of medicinal mushrooms, which have been used for centuries in traditional medicine systems around the world. This comprehensive guide will explore what mushroom drops are, their benefits, how they are made, the different types of mushrooms used, and how to choose the right product for your needs.

What Are Mushroom Drops?

Mushroom drops are concentrated liquid extracts derived from various species of mushrooms known for their medicinal properties. They are typically made using a dual extraction process that combines alcohol and water to extract the beneficial compounds found in mushrooms. This results in a potent tincture that can be easily consumed and absorbed by the body.

 The History of Medicinal Mushrooms

The use of mushrooms for medicinal purposes dates back thousands of years. In Traditional Chinese Medicine (TCM), mushrooms like Reishi (Ganoderma lucidum) have been revered as “herbs of immortality” and are believed to promote longevity and health. Similarly, in other cultures, such as those in Japan and Native American traditions, various mushrooms have been used for their healing properties.

Benefits of Mushroom Drops

Mushroom drops offer a range of health benefits due to the bioactive compounds they contain. Here are some of the most notable benefits:

1. Immune Support

Many medicinal mushrooms are known to enhance immune function. For instance, Turkey Tail (Trametes versicolor) contains polysaccharopeptides (PSP) that stimulate immune response and may help fight infections.

 2. Cognitive Enhancement

Lion’s Mane (Hericium erinaceus) is renowned for its neuroprotective properties. Studies suggest it may promote nerve growth factor (NGF) production, potentially improving cognitive function and memory.

3. Stress Relief and Mood Enhancement

Reishi is often called the “mushroom of immortality” and is known for its adaptogenic properties, helping the body cope with stress and promoting relaxation.

4. Antioxidant Properties

Mushrooms like Chaga (Inonotus obliquus) are rich in antioxidants, which help combat oxidative stress in the body, potentially reducing the risk of chronic diseases.

 5. Anti-Inflammatory Effects

Many medicinal mushrooms exhibit anti-inflammatory properties. For example, Cordyceps has been shown to reduce inflammation and improve energy levels.

How Are Mushroom Drops Made?

The preparation of mushroom drops involves a careful extraction process to ensure that the beneficial compounds are effectively captured. The most common method is dual extraction:

 Step 1: Sourcing Quality Mushrooms

The first step in making mushroom drops is sourcing high-quality mushrooms. Look for organic varieties that are sustainably harvested to ensure purity and potency.

 Step 2: Drying the Mushrooms

Once harvested, mushrooms are typically dried to preserve their active compounds. This also makes them easier to work with during extraction.

Step 3: Alcohol Extraction

The dried mushrooms are soaked in high-proof alcohol (usually ethanol) for a specified period. This process extracts alcohol-soluble compounds such as triterpenes and other beneficial phytochemicals.

 Step 4: Water Extraction

After the alcohol extraction, the mushroom material is then boiled in water. This step extracts water-soluble compounds like polysaccharides, which are crucial for immune support.

 Step 5: Combining Extracts

The final step involves combining both extracts into a single tincture. This dual extraction method ensures a broad spectrum of beneficial compounds is available in each drop.

 Different Types of Medicinal Mushrooms Used in Drops

There are numerous types of medicinal mushrooms that can be used in drops, each offering unique health benefits:

 1. Reishi (Ganoderma lucidum)

Benefits: Known for its calming effects, Reishi is often used to reduce stress and improve sleep quality.

Active Compounds: Triterpenes, polysaccharides.

2. Lion’s Mane (Hericium erinaceus)

Benefits: Promotes cognitive function and nerve health.

Active Compounds: Hericenones, erinacines.

 3. Turkey Tail (Trametes versicolor)

Benefits: Supports immune function and gut health.

Active Compounds: Polysaccharide K (PSK), polysaccharopeptides (PSP).

 4. Chaga (Inonotus obliquus)

Benefits: Rich in antioxidants; supports overall health.

Active Compounds: Betulinic acid, polysaccharides.

5. Cordyceps (Cordyceps sinensis)

Benefits: Enhances energy levels and athletic performance.

Active Compounds: Cordycepin, adenosine.

Methods of Consumption

Mushroom drops can be taken in several ways:

• Mixed with Water or Juice: Add drops to a glass of water or juice if you prefer not to take them directly.

• In Smoothies or Foods: Incorporate into smoothies or recipes for added nutrition.

Choosing High-Quality Mushroom Drops

With the increasing popularity of mushroom supplements comes a variety of products on the market. Here’s how to choose high-quality mushroom drops:

 1. Check Ingredients

Look for products that contain pure mushroom extracts without fillers or additives like rice flour or mycelium unless specified as part of the formulation.

2. Look for Dual Extraction

Ensure that the product specifies a dual extraction process on its label; this indicates that both alcohol-soluble and water-soluble compounds have been extracted.

3. Source Transparency

Choose brands that provide information about sourcing practices and quality control measures to ensure you’re getting a safe product.

 4. Third-party Testing

Opt for products that have undergone third-party testing for potency and purity; this adds an extra layer of assurance regarding quality.

Potential Side Effects and Considerations

While mushroom drops are generally considered safe for most people when taken as directed, there are some considerations:

Some individuals may be allergic to certain types of mushrooms; if you have known allergies, consult with a healthcare provider before use.

Medicinal mushrooms can interact with certain medications, especially immunosuppressants or anticoagulants. Always consult with a healthcare professional if you are on medication or have underlying health conditions.

Consult your healthcare provider before using mushroom drops if you are pregnant or breastfeeding due to limited research on safety during these periods.

Conclusion

Mushroom drops offer a convenient way to harness the numerous health benefits associated with medicinal mushrooms. From immune support to cognitive enhancement, these potent extracts can be an excellent addition to your wellness routine. By understanding how they are made, their benefits, appropriate dosages, and how to choose high-quality products, you can make informed decisions about incorporating mushroom drops into your life.

As always, it’s essential to listen to your body and consult with healthcare professionals when making changes to your health regimen. With proper use and understanding, mushroom drops can be a valuable ally on your journey toward better health and well-being!

MAGIC MUSHROOM CHOCOLATES, READ ON…

MAGIC MUSHROOM CHOCOLATES – WHAT ARE THEY?

On November 28, 2024, the Costa Rican Constitutional Court, known as Sala IV, made a landmark ruling that has sent shockwaves through the nation and the broader Latin American region: it struck down a proposed referendum aimed at legalizing recreational cannabis. This decision not only halts the immediate efforts to bring recreational cannabis to the ballot but also raises critical questions about the future of cannabis legislation in a country that has seen significant strides in medical marijuana and hemp legislation. This article explores the implications of this ruling, the broader context of cannabis laws in Costa Rica, and what this means for future legislative efforts.

The Constitutional Court’s Ruling

Legal Basis for the Decision

The ruling by Sala IV was grounded in constitutional law and international obligations. The court found that the proposed referendum, which sought to allow Costa Ricans to vote on legalizing recreational cannabis, was unconstitutional based on Article 7 of Costa Rica’s Political Constitution. This article emphasizes that international treaties ratified by Costa Rica take precedence over domestic laws.

The court specifically cited conflicts with several key international agreements:

1. 1961 Single Convention on Narcotic Drugs: This treaty classifies cannabis as a controlled substance and restricts its use to medical and scientific purposes.

2. 1988 UN Convention Against Illicit Traffic in Narcotic Drugs: This agreement reinforces prohibitions against recreational use of drugs, including cannabis.

3. Vienna Convention on Psychotropic Substances: Like the previous treaties, this convention emphasizes restrictions on drug use and trafficking.

The court concluded that any attempt to legalize recreational cannabis through a referendum would violate these international obligations, thus rendering such a measure unconstitutional.

Background of the Proposed Referendum

The initiative for the referendum was led by Erick González Camacho, who sought to gather enough signatures to bring the issue before voters nationwide. The proposal aimed not only to legalize recreational cannabis but also to regulate its production and sale, similar to frameworks established in other countries that have embraced legalization.

The Supreme Electoral Tribunal (TSE) had initially referred González’s request for a referendum to the Constitutional Chamber for review. However, the court’s decision effectively blocks any progress of the bill through both the referendum mechanism and legislative approval without addressing these international conflicts.

The Broader Context of Cannabis Legislation in Costa Rica

While recreational cannabis remains illegal, Costa Rica has made significant strides in legalizing medical marijuana. In 2022, after extensive debate and advocacy from various sectors of society, Costa Rica legalized medical cannabis. This landmark decision allowed patients suffering from various ailments—including chronic pain, epilepsy, and cancer—to access therapeutic products derived from cannabis.

The legalization of medical marijuana marked a significant shift in public policy and social attitudes toward cannabis. It aligned Costa Rica with other Latin American countries that have recognized the medicinal benefits of cannabis while also providing a framework for regulation and oversight.

Moreover, Costa Rica has embraced industrial hemp cultivation as part of its agricultural strategy. The Ministry of Agriculture and Livestock (MAG) has issued numerous licenses for hemp production, signaling a growing acceptance of cannabis-related industries within regulated frameworks. Hemp is seen as a versatile crop with applications ranging from textiles to construction materials.

President Rodrigo Chaves’ Stance

President Rodrigo Chaves has been an outspoken advocate for legalizing recreational cannabis as part of his broader strategy to combat crime and generate tax revenue. Chaves argues that regulating cannabis could provide safe access for consumers while cutting off profits to criminal networks that thrive on illegal drug trade.

In his administration’s view, legalization could also yield significant economic benefits:

• Tax Revenue: Legalizing recreational cannabis could generate substantial tax revenue that could be reinvested into public services such as healthcare and education.

• Job Creation: A regulated cannabis market could create jobs across various sectors—from cultivation and retail to distribution and marketing.

• Tourism: Legalization could attract tourists interested in experiencing a regulated cannabis market similar to those found in countries like Canada and certain U.S. states.

Despite these arguments, public opinion remains divided. Critics express concerns about potential increases in cannabis use among young people and emphasize adherence to international commitments as paramount. The ruling by Sala IV reflects these tensions between progressive policy initiatives and conservative legal frameworks.

Implications of the Court’s Decision

The court’s ruling signifies a substantial setback for advocates seeking to expand cannabis legalization in Costa Rica. It raises critical questions about how future legislation can navigate international obligations while addressing domestic desires for reform. For any new proposals to move forward, they would need to either align with existing treaties or involve a significant shift in Costa Rica’s approach to its international commitments.

In light of this ruling, lawmakers may consider several strategies:

1. Amendment of International Treaties: One potential avenue is advocating for changes at an international level regarding how treaties classify cannabis. However, this is a long-term strategy that would require cooperation from multiple countries.

2. Focus on Medical Cannabis Expansion: Given the court’s acceptance of medical marijuana legislation, advocates may shift their focus toward expanding access to medical products rather than pursuing recreational legalization at this time.

3. Public Education Campaigns: Educating the public about the potential benefits of legalization may help shift public opinion over time, creating an environment more conducive to future legislative efforts.

Public Response and Ongoing Debate

The ruling has reignited discussions around cannabis policy in Costa Rica. Advocates like González remain hopeful for future changes despite this setback; they argue that public sentiment is shifting toward acceptance of recreational use as societal attitudes evolve.

On social media platforms and community forums, citizens are expressing their views—both pro and con—regarding the ruling:

This ongoing debate highlights the complexities surrounding drug policy reform in Costa Rica, a nation known for its progressive social policies yet bound by traditional views on drug use.

The Economic Implications of Cannabis Legislation

While opponents often cite health risks associated with increased drug use as reasons against legalization, proponents highlight several economic benefits:

1. Tax Revenue Generation: Legalizing recreational cannabis could lead to substantial tax revenues that could be allocated toward public services such as education, healthcare, infrastructure development, and drug prevention programs.

2. Job Creation: A regulated market would create numerous jobs across various sectors cultivation, distribution, retail sales and stimulate local economies.

3. Tourism Growth: Countries like Canada have seen increased tourism due to their legalized cannabis markets; Costa Rica could potentially capitalize on this trend by attracting tourists interested in exploring its regulated market.

4. Reduction in Law Enforcement Costs: Legalization may lead to decreased law enforcement costs associated with prosecuting non-violent drug offenses related to possession or use of small amounts of cannabis.

Challenges Facing Economic Arguments

Despite these potential benefits, there are challenges facing advocates who wish to frame legalization as an economic necessity:

• Concerns Over Public Health: Opponents argue that increased access may lead to higher rates of substance abuse among vulnerable populations.

• International Obligations: As noted earlier, adherence to international treaties complicates any movement toward legalization; failure to comply could result in diplomatic repercussions or sanctions from other nations or organizations.

The Role of International Treaties

Costa Rica’s obligations under international treaties significantly impact its domestic drug policies:

1. Single Convention on Narcotic Drugs (1961): This treaty aims to combat drug abuse by controlling narcotics through strict regulations; it classifies many substances—including cannabis—as controlled drugs.

2. UN Convention Against Illicit Traffic in Narcotic Drugs (1988): This treaty emphasizes collaboration among nations to combat drug trafficking while reinforcing prohibitions against certain substances’ recreational use.

3. Vienna Convention on Psychotropic Substances (1971): Similar in nature to previous treaties but focuses more specifically on psychotropic substances rather than narcotics alone.

These treaties create a framework within which countries must operate regarding drug policy; thus far, they have largely reinforced prohibitionist approaches globally.

The Need for Reform at an International Level

Advocates for reform argue that existing international treaties are outdated given evolving scientific understandings regarding cannabinoids’ therapeutic properties:

Conclusion

Costa Rica is currently at a pivotal moment in its cannabis legislation following the Constitutional Court’s recent ruling against a proposed referendum for recreational use. This decision highlights the intricate balance between international treaties and domestic reform aspirations, a challenge that many nations face in addressing drug policy. Despite advancements in medical marijuana access and industrial hemp cultivation, the issue of recreational cannabis remains contentious and fraught with legal hurdles. Advocates continue to push for change, fueled by hope that public education campaigns and potential legislative reforms will eventually lead to responsible regulation rather than the historical prohibitionist approaches prevalent in Latin America. Navigating this complex landscape will require lawmakers to engage thoughtfully with constituents, striving to create equitable policies that honor both national interests and international commitments as Costa Rica moves forward into an uncertain yet promising future regarding cannabis use.

COSTA RICA AND CANNABIS, READ ON…

COSTA RICA APPROVES CANNABIS LEGALIZATION, NOW COMES COURT!