Oregon's Cannabis Industry Could Be More Vulnerable Than Ever

News Article
Two employees at a cannabis shop in Portland stand behind their shop counter and take out cannabis from a jar and weigh it on a scale
Portland is the first in the country to allocate cannabis tax revenue to relieve the industry's impacts of robberies, COVID-19, and wildfires

PORTLAND, Ore.—On Wednesday, Dec. 1, the City of Portland’s Cannabis Program reported to City Council that since March 2020, a total of 200 cannabis retail establishments have been burglarized—an average of 10 burglaries a month—with many establishments being hit multiple times. 

Wednesday's council presentation referenced Oregon Liquor and Cannabis Control (OLCC)’s data  that shows a 115% increase in Portland burglaries in 2020 compared to 2019. Furthermore, data shows that the frequency of burglaries has not declined over the last 20 months. For 2021, the City’s Cannabis program team reports an average of six new cases a month.

Unlike restaurants, retailers, gyms and professional service-oriented companies, cannabis-linked companies are unable to file insurance claims when their stores are damaged or money is stolen. Cannabis businesses are also ineligible to receive federal or state funded relief for issues related to the 2020 wildfires or COVID-19. 

During the City Council meeting, the Cannabis Program team revealed their execution plan to help cannabis recovery through the $1.33 million Cannabis Emergency Relief Fund (CERF).

Wednesday's vote is historic as Portland becomes the first government jurisdiction in the country to allocate cannabis tax revenue to help cannabis businesses and workers as they continue to endure the impacts of robberies, COVID-19, and wildfires.

City Council approves $1.33 million in Cannabis tax revenue toward Portland’s recovery
Portland City Council voted to approve the Office of Community & Civic Life’s Cannabis Program to direct a one-time allocation of $1.33 million in Cannabis tax revenue for grants to locally licensed cannabis businesses and employees that have been impacted by the multiple emergencies endured in 2020 and 2021, including an uptick in burglaries, COVID-19 impacts, and wildfire-related destruction to cannabis farms and ancillary businesses.

“Cannabis businesses are required to pay taxes on their total sales, and this includes money that has been stolen. Cannabis-related businesses remain one of the few that did not qualify for COVID-related aid nor have the option to file for bankruptcy,” said Oregon Cannabis Association Interim Executive Director Meghan Walstatter. “We want Oregon to become the leading cannabis ecosystem in the country, but we have many underlying vulnerabilities that need to be addressed this year for us to succeed. We are grateful for Portland City Council’s support as the cannabis industry works to recover from multiple crisis endured this past year.”

Photo of local Portland Cannabis Store Budlandia
Photo of a Portland cannabis store in Foster-Powell neighborhood

Budlandia owner Feng (Mark) Chen and his business partners operate a 3,000 square-foot flowering farm, and most of their product goes directly into their Budlandia stores. Budlandia’s farm was within the Eagle Creek evacuation zone and endured minimal impacts from the 2020 wildfire. Unfortunately, last year, one of the Budlandia stores was burglarized twice last year.

Feng reported the break-in incidents and hardships associated with the crimes to the Oregon Liquor & Cannabis Commission office, and shared that the break-ins resulted in the loss of $30K in product and $15K in damages. The Budlandia owners also required time to close the store for repairs to the windows, new cases, and enhanced security before the doors reopened, all of which couldn’t be covered by insurance. 

“Despite record tax revenue growth for the state, 2020 and 2021 have proven to be the toughest years for the operators in Oregon’s cannabis industry,” said City of Portland Cannabis Program Supervisor Dasheeda Dawson. “Following recommendations from our Cannabis Policy Oversight Team (CPOT) 2020 Annual Report, our bureau has worked hard to pilot a much-needed 'safety net' to protect as many Portland-based cannabis companies as possible.”

“All of us in the cannabis industry want to be recognized as a legitimate and competent industry,” said Cannabis Policy Oversight Team Member Rosa Cazeres. “This year I went political and took it upon myself to meet with a variety of elected officials to demonstrate that we’re modern entrepreneurs and community healers who are invested in contributing to the region’s economy and showing the nation what an equitable and economical cannabis ecosystem could look like. We need people to pay attention to the very real problems we are facing. Our industry can’t handle another emergency, and more attention and resources are needed.”

Portland is among the first to build a cannabis “safety net” in the country
Portland's Cannabis Emergency Relief Fund is the first government-supported “safety net” cannabis recovery initiatives in the U.S. The City’s Cannabis Program worked creatively to design the country’s first fund in order to help hundreds of businesses to remain open and continue to grow their revenue, and ultimately the City's cannabis tax revenue which goes back toward community and business grants programs, like the Social Equity & Educational Development (SEED) Initiatives.

“COVID-19 affected the workforce similar to what we’re seeing in the food service, retail and hospitality industries,” said Cannabis Workers Coalition Executive Director Savina Monet. “Many owners and employees tested positive for COVID or required taking off work to care for loved ones who required care. This resulted in many stores temporarily shutting down or having reduced hours. There are 321,000 cannabis workers in the country, and thousands in Oregon’s industry are without the traditional safety net that is offered to all other non-cannabis related businesses.”

An infographic showing all of the different job opportunities offered in the cannabis industry.
Infographic of Oregon's cannabis jobs ecosystem, created by Civic Life and the Cannabis Workers Coalition, summarizes data from Leafly's 2021 Jobs Report.

“It’s truly devastating to witness this gross and repeated injustice to Portland’s cannabis businesses,” said Cannabis Licensing & Policy Coordinator Christina Coursey. “Each case has been growing more and more violent. Many employees and owners are growing fearful, small businesses owners are afraid one more time could put them out of business. We need to model what a responsible and equitable program looks like to respond to this unjust phenomenon.”

The City’s Cannabis Emergency Relief Fund will provide one-time grants of up to $25,000 for small sized licensed Cannabis businesses within Portland city limits, and up to $5,000 to cannabis industry workers economically impacted from COVID-19, vandalism, robberies, wildfire, and the residual effects of illness, trauma, and grief suffered from such impacts. 

In addition to the $1.33 million for CERF, the City’s Cannabis Program will also provide up to $200K in waivers from prior year licensing fees for businesses to stay in compliance and not endure further economic hardship. 
“Since the onset of the COVID-19 pandemic, small businesses have dealt with many difficulties as they fight to survive, and our local cannabis industry has had to deal with unique challenges," said Civic Life Commissioner-in-Charge Jo Ann Hardesty. "These include being ineligible for federal relief dollars and operating under federal laws that often force shops to operate in a cash only environment – making them frequent targets of burglaries. This gap has compelled the City to action and I’m proud of the work by the Office of Community & Civic Life to create a safety net for our cannabis industry and workers through the Cannabis Emergency Relief Fund.”

With Wednesday's City Council vote, Civic Life will now need to work with three community partners --NuLeaf ProjectThe Initiative and, the Oregon Cannabis Association--to implement the grant administrative process. Grant applications are expected to open on Feb. 1, 2022. 

View the CERF presentation to City Council on YouTube (scroll to find Agenda Item 833).

For more information on how to apply for the Cannabis Emergency Relief Fund, visit: portland.gov/civic/cannabis/CERF.