Unlicensed Cannabis Cultivation in Oregon: Legislation is Bolstering Enforcement, but More Action is Needed

Regions of robust, legal cannabis cultivation, such as the State of Oregon, are seeing a surge in unlicensed cultivation activities that are threatening legal markets, harming the local environment, and creating serious labor and humanitarian concerns.

Consequences of Unlicensed Cultivation in Oregon

Unlicensed cultivation sites are rampant throughout the counties of Deschutes, Jackson, and Josephine in Oregon. Operated chiefly by organized crime, these grows work under the guise of a legal hemp farm. Hemp farms do not require an Oregon Liquor Control Commission (OLCC) license, nor do they have the same canopy size restrictions as cannabis grows. Also, since cannabis closely resembles hemp, it is easy to physically hide. Though hemp farms do require authorization from the Oregon Department of Agriculture(ODA), most are unlicensed in this facet as well.

The state-wide consequences of unlicensed grows are numerous. For instance, unlicensed cultivators pose a threat to local environments by not adhering to regulations surrounding water rights. Water sources can be illegally siphoned dry, crippling local ecosystems and surrounding agriculture. Further, since unlicensed grows are considerably bigger than their licensed counterparts, the market value of legal flower decreases, crippling even the larger tier licensed cultivators.

The most unfortunate aspects of unlicensed cultivation are the humanitarian issues they encompass. Farm laborers may be working against their will or under poor and inhumane conditions. In addition, nearby locals are often bribed for cooperation or threatened if they ask questions. While some landowners may be genuinely unaware of the illegal activity occurring on their property, many are simply compensated for their complacency.

Enforcement Successfully Bolstered by Legislation, but Challenges Remain

In 2018, the Oregon Legislature passed Senate Bill 1544, creating the Illegal Marijuana Market Enforcement Grant Program. The program was developed to provide funding to law enforcement agencies to combat the illegal cannabis market. Since the bill was aimed at Oregon’s entire illegal cannabis market, unlicensed grows encompassed only a few elements of the program’s overall focus.

However, in 2021, the Oregon Legislature passed House Bill 3000, which added an additional $3 million to the grant program to focus on illegal cultivation and distribution operations, as well as Senate Bill 893 and Senate Bill 5561. The former bill was directed specifically at the humanitarian issues associated with these operations, while the latter bill provided $20 million in one-time funding to specifically address both the increasing number of illegal cultivation sites as well as the humanitarian crisis.

The increased funding and enforcement capacity has led to numerous successful seizures and shutdowns since the start of 2022, but authorities note persistent challenges. Illegal grows and those associated with their operations can be difficult to track and sometimes dangerous to approach if they are armed. The increased funding is in part meant to acquire new members of law enforcement, but recruitment remains low. Further, unlicensed operators will often abandon a site they feel is being monitored by law enforcement, and just move on to a new location.

Unlicensed Cultivation: An Underestimated Problem

Illegal cannabis cultivation poses consequences that are more far reaching than one might initially think. The funding and human resources required to monitor and halt unlicensed cultivation is extensive and may be unsustainable. The humanitarian issues they pose can also create additional strain on law enforcement and social systems.

Illegal cultivation remains an underestimated threat to legal cannabis markets, and, though efforts are currently ramped up to address the problems in Oregon, to what extent they will prevent illegal grow operations is still to be determined.

How Can Sapphire Risk Help?

Tony Gallo and the team of experts and consultants at Sapphire Risk Advisory Group have worked in the Oregon cannabis market and are familiar with the industry’s unique challenges. Follow us on social media to stay up to date with more Oregon cannabis industry updates!