A Vape Ban Would Crush Oregon Cannabis Oil Extractors. Gov. Kate Brown May Do It Anyway.

Oregon’s cannabis industry was already reeling from oversupply. One bright spot was oil extraction.

CBD vape pen. (WeedPornDaily.com)

Gov. Kate Brown is poised to make a decision she says may shield thousands of Oregonians from a potentially life-threatening product.

The state's cannabis farmers wish she wouldn't.

The announcement by health officials last week of a second Oregon death in an outbreak of respiratory illnesses has pressed the governor to the brink of issuing a six-month ban on all vaping products. Some public health experts say that's the responsible choice: Even if vaping-related illnesses remain rare, the fog surrounding their cause means Brown can protect the most people with a blanket ban.

"Given that we have a product that's associated with deaths, it seems like it's reasonable to stop sales of that product until we are clear whether there's a way we can prevent further injury or deaths," says Dr. Tom Schaumberg, a Portland pulmonologist.

In some states, governors might worry about outraging the tobacco lobby by banning Juul cartridges. But Brown has little reason to care about that: She's a Democrat who isn't up for re-election. Instead, she must weigh the public health benefits of a ban against the possibility of crushing Oregon's beleaguered cannabis industry.

Take for example East Fork Cultivars, a cannabis farm in Southern Oregon. In the coming weeks, it will harvest and ship roughly a thousand pounds of cannabis to extractors that will turn the plant into oil used in vaping cartridges.

"We're counting on that money to get us through the most expensive time for all farms, which is harvest season," says Nathan Howard, who co-owns the farm with his brother, Aaron. "We are counting on those deals to go through—a lot of farms are."

Oregon's cannabis industry was already reeling from oversupply, which sent the price of weed into a nosedive from which it's just starting to recover ("Too Much Weed," WW, March 19, 2018). One bright spot was oil extraction—which  allowed producers with surplus flower to instead extract oils for vapes and edibles, giving them a higher profit margin.

Data shows the oils and extract market in Oregon constitutes about 30 percent of the cannabis industry's $643 million in annual sales.

Both victims of vaping-related deaths used pens loaded with cannabis oil. That's a blow to consumer confidence and to pot growers—who have never before confronted a death so closely tied to their product. Data from the Oregon Liquor Control Commission shows that concentrate and extract sales have dropped by roughly 20 percent from August.

A ban by Brown? That would be crushing.

"It would 100 percent impact everyone, from the dispensary all the way down to cultivation," says Amy Margolis, a lawyer specializing in cannabis. "I'm certain I'm right. We're a symbiotic industry, so it's hard to find a product that doesn't touch everything else."

As Brown weighs her legal options, the entire cannabis industry—the farmers, the oil producers, the shops and consumers—holds its breath.

(Justin Tyler Norton)

Most of the lung illnesses due to vaping have been caused by a buildup of fatty oil particles in the lungs, causing patients to suffocate. Health professionals are in agreement: Oils shouldn't be inhaled in copious amounts into the lungs, because they aren't equipped to dispose of fatty buildups.

Most health officials believe the deaths are probably caused by additives in the oil cartridges. But the U.S. Centers for Disease Control and Prevention still haven't narrowed down the suspects to any particular product—or even to only tobacco or cannabis vapes.

That means Brown faces pressure to make a decision—but with limited information.

Massachusetts banned all vaping products for four months, and four other states have or will ban flavored vape products.

The Oregon Health Authority presented Brown with six options to quell the illnesses. One of those is a six-month temporary ban on all vaping products. Brown's office says it is consulting the Oregon Department of Justice about what it can legally do.

That means the state wants to know if it can make a ban hold up in court.

Andrew DeWeese, a cannabis lawyer, says Brown could use executive powers to declare a state of emergency. But DeWeese says the cannabis industry will fight back if a ban is imposed.

"Because there are so many companies in Oregon that have substantial revenue streams coming from vape products," he says, "those companies might take the position that the state of emergency declared goes beyond what powers the governor has to declare that emergency."

WW spoke with three cannabis oil producers in the state. They all fear a ban would partially cripple their business.

Kevin Walsh, who owns the CO2 Company, says a blanket ban on vaping products would eliminate about 60 percent of his cannabis oil business. His products are in over 300 stores in Oregon.

"It's scary for us," Walsh says. "We have other [products] that would hopefully fill that void. But there would probably be some layoffs, for sure."

For smaller companies like Walsh's, shifting away from producing oils isn't an option. The equipment is costly and production is vastly different.

Rick Brown is the president of Orchid Essentials, a multi-state producer that generates a significant portion of its revenue from cartridges sold in over 200 stores in the state. Though he says his business would survive a vaping ban, he adds that the governor would be punishing companies that have complied with state regulations without knowing the true source of the illnesses.

"We feel it would be an overreach, without really knowing what they're dealing with," says Brown. '"It would certainly be harmful to the industry."

Howard of East Fork Cultivars fears a ban would only drive people back to the unregulated black market for cartridges and "further the epidemic."

Retailers are less worried about the ban and how it would affect sales—because Oregon pot users are loyal and would simply move to using flower, they say—but a ban, they add, would eliminate about a third of their product inventory in stores.

WW spoke with five cannabis shops in Portland. None of the shops have pulled products from their shelves, citing confidence that their products do not contain harmful additives.

"If there were issues with any of the products on my shelves, I would've pulled them," says Meghan Walstatter, who owns Pure Green in Northeast Portland. "But I source all those products."

At a Nectar location in Southeast Portland, an entire wall and one of three large glass display cases are adorned with vaping products such as cartridges and vials filled with cannabis oil in flavors like Lemon Blossom and Orange Cream.

Dave Alport, who owns Bridge City Collective, tells WW that after hearing of the illnesses, he requested ingredient lists from the 11 cartridge companies he buys from.

"The response was overwhelmingly positive," Alport says. "We didn't have a response from anyone saying they had additives in their cartridges…that was a relief for us."

None of the shops say they've noticed a drop in overall sales, and only one—Alport's shop—says vaping sales dropped but customers simply shifted their dollars to other cannabis products, like flower. Vape sales dropped by 31 percent over the past five weeks at his store, Alport says.

"This is what happens when you don't have the federal government involved and it's left up to the states," says Alport. "If they want us to sort this out on our own, we're going to have these hiccups along the way. If they could get their act together, we could have uniform regulations for the industry that are safer for everyone."

Mark Pettinger of the OLCC says without clear scientific evidence of what's causing the illnesses, a blanket ban may be the only option.

"I think it's a fast-moving situation," he says, "and we'll just have to be adaptable and flexible and convey to our licensees that first and foremost this is a public health issue, not a regulatory issue or a reflection on the way they do business."

The governor's office says it's engaging in talks with stakeholders, including those from the cannabis industry, before making a decision.

"Gov. Brown takes threats to public health very seriously," says her spokesman Charles Boyle, "and any action taken on vaping will prioritize safeguarding Oregonians' health."

Willamette Week’s reporting has concrete impacts that change laws, force action from civic leaders, and drive compromised politicians from public office. Support WW's journalism today.