Let’s look at the Oregon Kratom Consumer Protection Act

On June 26, Oregon’s state senate passed HB2646, the Oregon Kratom Consumer Protection Act. Governor Kate Brown is expected to sign this bill into law, making Oregon the 6th state to place regulations on kratom vendors to hopefully ensure adult access to pure, uncontaminated kratom.

Like other KCPAs, this bill places an age restriction on sales of kratom – this time it’s 21. It prohibits the sale of all kratom that is adulterated or contaminated with a “dangerous nonkratom substance” that “affects the quality or strength of the kratom product to such a degree as to render the kratom product injurious”. It prohibits the sale of kratom containing “any synthetic alkaloids” or kratom with a level of 7-hydroxymitragyinine that is greater than 2% of alkaloids.

The Oregon Department of Agriculture (ODA) will have to write up standards for labeling, testing, and registration procedures and fees.

This bill is different from other KCPAs in that it has distinct definitions for a kratom “processor” and a “retailer”. The bill requires kratom “processors” to register with the ODA. HB2646 defines a processor as:

…a person, excluding a retailer, that:
(a) Sells, prepares, processes, manufactures, distributes or maintains kratom products;
or
(b) Advertises, represents or holds out as being a person that sells, prepares, processes,
manufactures, distributes or maintains a kratom product.

A “retailer” is:

…a person that sells, distributes or exposes for sale kratom products to individuals for personal consumption.

So according to this bill, a retailer does not prepare, processes, or manufacture kratom. Should the KCPA pass, an Oregon kratom retailer will be limited to sourcing tested, unadulterated, uncontaminated kratom products obtained solely from a processor who is registered with ODA. Nothing stated in the bill explains whether a processor can be from out of state and still register in Oregon. However, the Fiscal Impact of Proposed Legislation report states “ODA has discovered only five known processors of kratom”. One can assume these are located in Oregon.

A retailer may not sell, distribute or expose for sale a kratom product sold, prepared, processed, manufactured, distributed or maintained by a processor that is not registered with the department.

On the one hand, the distinction between processors and retailers may be a good thing for small vendors who can sell kratom they purchase in bulk without having to set up their own processing facility, much like a chicken slaughterhouse is subject to USDA inspection, but a vendor selling that USDA-approved chicken at market is not. On the other hand, restricting the supply to registered Oregon processors, instead of allowing retailers to source tested, uncontaminated kratom from elsewhere, may be damaging to the kratom retail business. What incentive would five processors have to sell to retailers instead of simply selling direct to Oregon consumers themselves?

Oregon made national news back in 2018 for the very low price of legal cannabis in the state. Originally, Oregon’s legalization law allowed for not only home grow, but a low barrier of entry into the grow market in hopes of eliminating the illegal market. This led to an overabundance of supply and cheap prices, which of course is great for consumers but bad for big business. So in 2020, Oregon created higher barriers of entry into the legal pot business (giving an advantage to bigger businesses of course), and prices, according to the business press, improved (increased).

We won’t know exactly how HB2646 will pan out until ODA works out the details, but hopefully Oregonians will have access to uncontaminated, tested kratom at a price that’s not artificially inflated by excessive limitations on the number of kratom processors to choose from.

The ODA will receive an additional $1,099,977 from Oregon’s General Fund to implement this new law, and the maximum limit for payment of expenses has been increased by $304,964 for Oregon’s Department of Justice to assist ODA in that implementation.

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