Business
Report: Despite Promises, Oregon’s Psilocybin Program Not Paying For Itself
A tough new report sheds light on how Oregon’s groundbreaking legal psilocybin program has fallen massively short of its stated promises.
According to Willamette Weekly, nearly three years after voters in the state approved a ballot measure to legalize it, “Oregon Psilocybin Services is nowhere near paying its own way,” despite promises from its backers that “Oregonians would get access to a life-changing compound in a safe, legal setting, and, after a two-year startup period, it wouldn’t cost taxpayers a dime.”
The outlet noted that advocates of the 2020 ballot proposal, Measure 109, asserted that the licensing fees paid “by mushroom growers, testing labs, trip facilitators and service centers would cover the costs of a new bureaucracy within the Oregon Health Authority.”
That has been far from the case.
“Fee revenue is anemic because too few people are seeking the various licenses (“Stuffed Mushrooms,” WW, May 24). Just four manufacturers, two testing labs, and eight service centers have been licensed. All three types of entities pay a one-time fee of $500 and then $10,000 a year to operate. Many more facilitators have been approved (88), but they pay only $150 up front and then $2,000 annually,” Willamette Weekly reported in a story published on Wednesday.
“So far this year, Psilocybin Services has raised just $318,419 in fees, OHA says. That’s in line with estimates by WW. Tallying the number of permits issued and multiplying by all the fees, we came up with a total of $342,425 since the program began licensing participants on Jan. 2.”
“Backers of Measure 109 said the program would cost far more—$3.1 million a year—to run. To fill at least part of that gap, Oregon lawmakers appropriated $3.1 million from the taxpayer-supported general fund for the two-year period that started July 1. OHA is betting that shroom fee revenue will pick up as the biennium proceeds, making up the rest of the shortfall,” the outlet continued.
Measure 109 passed in 2020 by a fairly narrow vote, with 50% of Oregon voters approving and 44% voting against. It made Oregon the first state in the country to legalize psilocybin.
In the spring, Oregon Psilocybin Services, a regulatory arm of the Oregon Health Authority, announced that it had awarded the state’s first license for a psilocybin service center in Eugene.
Oregon Psilocybin Services (OPS) Section Manager Angie Allbee called it “a historic moment as psilocybin services will soon become available in Oregon, and we appreciate the strong commitment to client safety and access as service center doors prepare to open.”
At the time of the announcement, Oregon Psilocybin Services offered a refresher on how the program will work.
“Under the statewide model, clients 21 years of age or older may access psilocybin services. While they won’t need prescriptions or referrals from healthcare providers, clients must first complete a preparation session with a licensed facilitator. If they meet the criteria to move forward, they may participate in an administration session at a licensed service center, where they may consume psilocybin products in the presence of a trained and licensed facilitator,” the agency explained. “Afterwards, clients may choose to join optional integration sessions, which offer opportunities to be connected to community resources and peer support networks for additional support. Once licensed, service centers can employ and/or contract with licensed facilitators who are trained in providing preparation, administration, and integration sessions to clients. Service centers will sell psilocybin products that were produced by licensed manufacturers and tested by licensed laboratories. To date, OPS has issued three manufacturer licenses, one laboratory license, five facilitator licenses, and 84 worker permits. OPS expects to issue more licenses and worker permits in the coming months.”
The state finalized the rules for the psilocybin program at the end of last year.
Albee and André Ourso, the administrator of the Center for Health Protection in Oregon, said at the time that Oregon Psilocybin Services “received over 200 written comments and six hours of comments shared in the public hearings during the November 2022 public comment period.”
“These comments helped to further refine and improve the rules, which have now been adopted as final. The final rules are a starting place for the nation’s first regulatory framework for psilocybin services, and we will continue to evaluate and evolve this work as we move into the future,” they said.
In response to this week’s report by Willamette Weekly, Oregon Health Authority spokesman Afiq Hisham urged patience.
“It takes time to build a new section in state government and to become 100% fee-based, specifically because ORS 475A is the nation’s first regulatory framework for psilocybin services and required an intensive two-year development period,” Hisham told Willamette Weekly.
Source: https://hightimes.com/news/report-despite-promises-oregons-psilocybin-program-not-paying-for-itself/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
Marijuana companies suing US attorney general in federal prohibition challenge
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
Pot Odor Does Not Justify Probable Cause for Vehicle Searches, Minnesota Court Affirms
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
-
Business8 months agoPot Odor Does Not Justify Probable Cause for Vehicle Searches, Minnesota Court Affirms
-
Business7 months agoNew Mexico cannabis operator fined, loses license for alleged BioTrack fraud
-
Business7 months agoAlabama to make another attempt Dec. 1 to award medical cannabis licenses
-
Business8 months agoWashington State Pays Out $9.4 Million in Refunds Relating to Drug Convictions
-
Business8 months agoLegal Marijuana Handed A Nothing Burger From NY State
-
Business8 months agoCan Cannabis Help Seasonal Depression
-
Business7 months agoMarijuana companies suing US attorney general in federal prohibition challenge
-
Blogs8 months agoCannabis Art Is Flourishing On Etsy