On Thursday, October 18, the OLCC circulated their proposed new rules (revising OAR Chapter 845, Division 25) ahead of the October 22 meeting for the Rules Advisory Committee. Although not yet adopted, it’s worthwhile to review the contemplated revisions to be best prepared for upcoming changes.

The OLCC described these revisions as a “response to both legislative changes passed during the 2018 session of the Oregon Legislature and technical revisions due to lessons learned.” The revisions are comprehensive, revising and adding to many sections of the OAR rules.  Some revisions codify review procedures, such as stating what constitutes “good cause” for overcoming denial of applications. Others add enforcement mechanisms, restrictions, and penalties, apparently aimed at curbing diversion, addressing known areas of noncompliance, and strengthening the enforceability of the rules.

Here are some of the highlights of the proposed rules:

  • More Ways to Get Denied– There would be three new reasons given for denying applications or renewal applications:
    • “Has not submitted all fees, forms, documents and information required to act on a renewal application within the time frames in these rules or as specified by the Commission[;]”
    • “Is required to but has not registered with the Oregon Secretary of State. Entities which are required to register with the Oregon Secretary of State include corporations, limited liability companies, limited liability partnerships and limited partnerships;” and
    • “The Commission determines any unenclosed areas create a compliance risk or other risk to public health and safety.”
  • Immaculate Conception Rule Unchanged – The start-up inventory grace period (allowing acquisition of initial inventory from any source within the State of Oregon) would not be renewed under this amendment package. As it stands, only those whose complete applications were submitted by July 1, 2018 will be able to take advantage of this rule; others will have to get their inventory from OLCC-licensed sources.
  • Inhaled Cannabinoid Product Daily Limit – In addition to limits on usable marijuana, extracts, and other cannabinoid products, retailers would be prohibited from selling at one time or in one day more than five grams of cannabinoid product intended to be inhaled (“cannabinoid product” to be defined as “usable marijuana, cannabinoid extracts and cannabinoid concentrates that have been combined with an added substance”).
  • Limitations on Shared Lots for Producers and Shared Kitchens for Edible/Topical Processors– The rules would only allow multiple producers on the same tax lot and allow edible/topical processors to share kitchens (under certain conditions) only if they were licensed before January 1, 2019. Further, such producers and processors would be unable to transfer their licenses and the OLCC would deny any change in business structure requests. In other words, these arrangements are being phased out.
  • License Restrictions– New rule 845-025-8575 (Restricting License Privileges and Conduct of Operations) would enact a standard for the OLCC restricting privileges and operations, a process for the OLCC issuing restrictions with a right of the licensee to contest in a hearing, and a penalty for failing to adhere to the restrictions for its duration.

The full proposed amendments can be found here.

If you’re looking for counsel for your cannabis regulatory compliance, we can help! Contact our office at 541-306-4441 to schedule your initial consultation today.