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(Watch) Portland Pot
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America is smack dab in the middle of a major drug, business, and legal experiment. Odds are you live in a state where recreational marijuana has become legal in the past few years or is the target of an intense lobbying effort to make it so. Yet possessing or selling marijuana technically remains a crime everywhere under federal law, punishable by prison time and fines. Today we take measure of a movement that’s not quite like any that’s ever happened before in the U.S.
The following is a transcript of a report from “Full Measure with Sharyl Attkisson.”
Watch the video by clicking the link at the end of the page.
Myron Chadowitz started Essential Farms, a small organic marijuana farming operation in 2015 in rural Eugene, Oregon two hours south of Portland.
Sharyl: How many people did you have at your peak?
Myron Chadowitz: 22 people. We were doing a million in sales. We were, we were doing great. You know, were we making money? No, but we were seeing there’s an avenue ahead.
But his dreams of the high life went up in smoke in March of 2023 when Oregon started requiring growers to test pot for a certain type of mold. It put him out of business before the state decided a few months later that the tests weren’t necessary, after all.
Chadowitz: The law’s gone. But here we are. Laid off everyone. It is just me and Shane. What’s to stop the state or federal throwing another regulation out of the blue that we’re gonna have to adapt to that maybe we won’t be able to? And it’s like, ‘Can I do this any longer?’ And as a businessman, I said, ‘I’ll take the loss. I’m, I’m done.’
His is one of countless hard luck stories that can be found among dreamers who once saw legal marijuana as America’s new green rush.
24 states and Washington, DC have now legalized recreational marijuana. Even more states—39 plus DC— allow medical use.
Sharyl (on-camera): Pot has been legal for recreational use here in Oregon longer than most anyplace else. The story of how it’s working out almost ten years in— is complicated and depends on who you ask.
Mike Getlin helped start up the Cannabis Industry Alliance of Oregon and now does PR for Nectar Markets, the largest recreational cannabis dispensary chain in Oregon. The expert joint rolling team rolls about 5 million doobies a year.
Sharyl: What’s the history of legalized marijuana in Oregon?
Mike Getlin: We had a medical, one of the first medical programs in the country and then in 2016 we rolled out adult use across the state and have been growing ever since.
Sharyl: If you had to give the whole effort statewide a grade in terms of success, whatever that means, what would you say it is at this point?
Getlin: I think we get an A for the amount of legal market adoption. The number of Oregonians that choose to get their cannabis products from legal sources is probably the highest in the country. We definitely get an A+ for the best products around. And I think we get an A for minimizing any public health or safety harms. We probably get about a C- for the business climate, and the ability of the regulatory infrastructure to modernize and adapt.
Wherever we’ve gone at Full Measure to report on legalized marijuana, we’ve found a decidedly mixed bag. The promise was less crime, more tax revenue and business opportunities, and no black market.
Yet the black market has thrived in states that legalized pot. And foreign cartels have expanded their territory. On our 2020 visit to California, it was estimated 75% there were still buying pot illegally. Part of the reason— high taxes drive up the price of legal weed.
Jerred Kiloh (September 2020): If you’re a cultivator, you pay a tax. When you’re a manufacturer, you pay a tax. And then once it gets to a distributor, you pay a tax. Then once it gets to the retailer, the retailer pays a tax. Then the state takes its excise tax, which is based on gross receipts. Then you have like individual gross receipts tax at the city level.
When we reported from Colorado in 2018, there had been a spike in crime and pot houses devaluing neighborhoods.
Roger Vargason (November 2018): They had cut down all the drywall in the basement. They’ve taken all the carpet out, essentially destroying the basement. So you look at a house like this, it’s over half a million dollars and it’s virtually been destroyed. Now it turns into the black market. They ship it out of state and other states are paying large amount of money for this marijuana. So everything that we were kind of told in regards to legalization that, that, you know, we would get rid of the black market, law enforcement wouldn’t be involved in, it hasn’t panned out.
Measures to legalize pot failed last November in North Dakota, South Dakota, and Florida.
A big hurdle everywhere is the confusing legal landscape. Under federal law, marijuana is an illegal drug in the same category as heroin and LSD.
Starting under President Obama, a decision was made not to enforce the law in states that legalize pot. President Trump tried to reverse that in his first term. President Biden went back to looking the other way.
Merrick Garland/Former Attorney General (May 4, 2022): The department’s view on marijuana use is that enforcement against use is not a good use of our resources.
But business owners told us they’re still hampered by federal rules that keep them out of most banks and deny them federal tax deductions even as the IRS is more than happy to collect income taxes from them.
Getlin: So yeah, the federal government has done nothing and has chosen to simply look the other way and not enforce its laws.
Sharyl: But that means you can’t use the banking system, right?
Getlin: Correct.
Sharyl: And your business expenses are not tax deductible?
Getlin: Correct.
Sharyl: What do you think needs to happen in your view?
Getlin: I think that state level and federal regulators need to start looking at this like the business that it is, like a significant contributor to our economy, and start to do the same balancing work between consumer protection and creating a stable business environment that they do in every other industry.
It’s not that there isn’t a huge appetite. A creative array of products offered by the knowledgeable budtenders at the local dispensary have tendered a collective $20 billion dollars plus in revenue, so far.
Sharyl: And the worst part, or the most challenging part?
Getlin: Trying to make a profit. You know, as someone who’s worked in the trade association world in Oregon for many years, I would say 90 plus percent of my friends’ businesses have failed. I have my farm failed that I originally started, and I was fortunate enough to be able to continue my work in the industry through Nectar and through the trade associations. But the business failure rate and the type of economic damage that it has done to many of my friends and colleagues has been really tough to watch.
Chadowitz: My cousin, this is what he does. We said, ‘Let’s go down to a one person operation.’ We reduced our license down to the small second smallest you could get. And he’s, you know, scraping by doing what he loves. It’s just me and Shane, just me and my cousin. We’re the only ones left.
Sharyl (on-camera): Interestingly, multiple tobacco companies have begun to invest in cannabis companies and are supporting groups lobbying for legalized pot. For more on this and other Full Measure stories, check out my podcast Full Measure: After Hours.
Watch video here.
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