As Americans are trying to overcome the crisis of overproduction of hemp

The cannabis of the two Pacific Northwest States of the United States hopes to rectify the current situation on the domestic hemp markets by amending the existing regulatory framework.

Describing the " Trends in the hemp industry " on the pages of the profile electronic edition of Ukrainian hemp breeds, it was not once explained " Why in Oregon technical hemp replaces the psychoactive ", and " What led to overproduction of CBD in Switzerland ." This material attempts to systematize the negative tendencies faced by US hemp in the period of overproduction, to orient themselves as they try to overcome these problems, and also to "calculate" other administrative-territorial units in the most economically developed   country of the world, in which there is a "hidden crisis of overproduction".

When separate US states initiated processes aimed at legislative settlement of the legal cultivation of psychoactive cannabis, lawmakers of the administrative-territorial units of the country were primarily concerned about the increase of taxes and fees, as well as the creation of various administrative restrictions (licensing rules). The last thing officials have been thinking about is what to do with overproduction of hemp raw materials.

It was with the problem of overproduction that collided in the US states of Oregon and Washington. The cannabis of the two above-mentioned Pacific Northwest States of the United States hopes to rectify the current situation on the domestic hemp markets by amending the existing regulatory framework. In the opinion of the hemp breeds of the aforementioned states, the only panacea for those who have been struggling with them is the legalization of the possibility of using hemp for recreational purposes at the federal level.

To say that in Oregon there is a problem of overproduction of hemp raw materials is a clear understatement. According to the assessment of the authorities of the aforementioned administrative-territorial unit between July 2017 and June 2018, the demand for hemp raw materials having a therapeutic effect is only 50% of the supply of legal producers. This is due to the fact that according to the requirements of local and federal laws the export / sale of hemp raw materials outside the state is prohibited. According to market experts, the amount of hemp grown in the state for retail needs will be enough until mid-2025 (this despite the fact that throughout this period, new cannabis will not grow). This is basically impossible, since the leaves and inflorescences of legal psychoactive cannabis, which for more than a year "lay in the warehouse" consumers are not interested.

Officials in the first-round attempt to bring a significant number of illegal producers (including medical companies suspected of illegally acquiring marijuana on the illegal market) on the legal market were in the first instance to blame for the overproduction of the hemp industry in Oregon.Seymama lawmakers (state capital) have begun to reduce the barriers to entry for companies that have sought to legalize their illegal marijuana crops. This was done due to a significant reduction of licensing fees and taxes levied for the acquisition of permitting documentation. In addition, officials lifted some restrictions on the number of licenses issued to enterprises for the legal cultivation of psychoactive cannabis, as well as removed restrictions that prevented investors from other states from owning a controlling stake in a business entity legally engaging in sheep breeding in Oregon. The principle of non-interference (laissez-faire) has led to an explosion in the number of licenses issued for the legal cultivation of psychoactive cannabis. Another difficulty that exacerbated common problems with the state's sheep breeding for overproduction of raw materials was the record harvest in 2017, which grew almost twofold compared to 2016. Over the past two years, demand in Oregon has not come close to the volume of supply, which has become the basis of the crisis of overproduction.

The obvious solution for a free market is to allow state suppliers to sell legally grown psychoactive raw materials to neighboring states where the use of psychoactive cannabis has been legalized. However, the United States federal government continues to consider hemp as a drug related to particularly dangerous narcotic drugs whose turnover is prohibited (in 2013, the US Department of Justice once again confirmed that the supply of legally grown psychotropic cannabis between different states is illegal).

The state of Oregon, the state of Washington (the first administrative unit in the United States to legitimize the use of cannabis in 2012) is in a similar position. Clearly there is no crisis of overproduction on this territory, as officials in Olimpia (state capital) monitor exclusively the production and sale of hemp raw materials. Their statistical indicators do not take into account such a position as consumption. Despite the external prosperity of an extremely low retail price, it is an obvious sign that the crisis of overproduction of hemp raw materials also came to the territory of the state of Washington. For example, the average price per gram of high-quality hemp in Seattle (state's largest city) is about $ 10 (California is about $ 13).

Washington state officials issued about 1,500 licenses for producers and processors of hemp raw materials to local companies. A huge number of licensees involves the production of such a quantity of cannabisa, which can not be formally sold through established retail chains. In order to minimize their losses, a significant number of enterprises specializing in the legal cultivation of psychoactive cannabis significantly reduced the area of ​​crops or stopped growing the plant at all. At present, less than half of all licenses issued to local cannabis use in the state. Among other things, the problems of companies specializing in legal cultivation and processing of psychoactive cannabis are exacerbated by the fact that the state has forbidden local hemp farmers to invest their financial resources in the development of this sector of management in other US administrative units.

The same administrative constraint also has a significant impact on the development of Oregon hemp breeds (due to the federal ban on the export of raw materials and "hemp capital" between states).

Comment of Association "Ukrainian technical hemp"

The legislators of both states make every effort to correct the above-mentioned problems. Oregon cannabis loses hope for the possibility of exporting between states, working with state lawmakers to remove the above restrictions by 2021. Their efforts are focused on reintroducing a change in the regulatory framework, giving the governor the opportunity to conclude agreements with other states on the direct involvement of Oregon's "hemp capital" in the development of cannabis in other US states. These changes to state legislation were first rejected by Oregon legislatures in 2017.

Representatives of the legal hemp industry in the state of Washington are keen to change the regulation of licensing mechanisms. The issue of reducing the number of legal producers, as well as the cessation of the mechanism for transferring the license of a new company after the bankruptcy of the parent entity, is worth the matter. The state's major trading corporations, like Oregon, are lobbying for a ban on "hemp capital" investments outside the state.