Golden Leaf Holdings (GLH-Cse) Nov 15, '16 is providing the following update to shareholders regarding the current state of the cannabis industry in Oregon and the changes under way in the recreational adult use market.
Oregon's recreational market surpassed $160 million in sales from the beginning of January through the end of September 2016, and Marijuana Business Daily and its Marijuana Business Factbook 2016 forecasts Oregon's market to reach $180 to $200 million by year end. However, oversight of the recreational, adult-use market is now transitioning to the Oregon Liquor Control Commission (OLCC), resulting in a decrease in the state sales tax from 25% to 17% and an increase in customer purchase limits.
As a result, sales estimates for the recreational market in Oregon could prove conservative. GLH is pleased to announce that it is in the process of applying for the required licenses in order to take advantage of this opportunity.
Marion County Elections
On November 8, 2016, citizens in Marion County, Oregon voted against the sale and production of marijuana for either medical or recreational purposes. This ban is expected to go into effect on or around January 1, 2017. As described in GLH's previous press release dated October 17, 2016, the topic of Marion County has been discussed since the implementation of the Marion County Ordinance last year, and GLH has taken necessary steps to minimize any impact that a ban would have on its business.
Due to the result of this vote, the Company will focus its operations and expansion plans at a Portland-based facility leased in Multnomah County for recreational production. GLH is in the process of applying for wholesale distribution and recreational processing licenses and determining the expected timeline for receipt of these licenses.
The Recreational and Medical Marijuana Market in Oregon
Currently, recreational adult users can purchase products either through a medical marijuana dispensary or a new recreational dispensary.
The Oregon Health Authority (OHA) is overseeing the state's early adoption of the recreational marijuana sales, allowing medical dispensaries to conduct sales to recreational adult users through December 31 of this year. Starting January 1, 2017, only medical marijuana card holders can buy product in medical dispensaries.
The OLCC is responsible for the recreational market and licensing. Currently, dispensaries have an option to become recreational or medical which has to be declared by end of the year. If a facility becomes a recreational dispensary, it can sell products to both recreational consumers and medical marijuana patients (who have medical marijuana cards). In the same dispensary, an individual can buy different dosed amounts of products depending upon whether they are a recreational adult user or medical marijuana customer.
Recreational dispensaries can only buy, source, and sell products from licensed recreational growers, processors, and wholesalers (managed by the OLCC).
Medical dispensaries can only buy, source, and sell products from entities who are registered under the medical marijuana program (managed by the OHA).
GLH Recreational Licensing and Timeline
The Company is in the process of applying for a recreational wholesale and recreational processor license for its Portland location. In order to sell either under a wholesale or processor license, GLH will have to receive a license from both the OLCC and the City of Portland. The company expects to receive its wholesale license within the next 30 days.
With a wholesale license, GLH will be able to buy and sell flower and oil from other processors, which then could be repacked in Golden-branded packaging.
In order to actually process (extract and refine) cannabis oil at the Portland location, the Company needs to receive its recreational processor license. GLH expects to receive its processor license within the next 60 days, contingent upon getting the relevant regulatory and city approvals.
About Golden Leaf Holdings
Golden Leaf Holdings Ltd. is one of the largest cannabis oil and solution providers in North America. It's a leading cannabis products company in Oregon built around recognized brands. GLH leverages a strong management team with cannabis and food industry experience to complement its expertise in extracting, refining and selling cannabis oil.
For further information, please contact:
Canadian Investor Relations:
Paul Searle
Investor Relations, Golden Leaf Holdings Ltd.
T: 778.240.7724
E: psearle@goldenleafholdings.com
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