Late Thursday afternoon last week, the Oregon Liquor Control Commission approved temporary administrative rules for Oregon’s recreational marijuana program, culminating a months-long process that involved input from numerous OLCC appointed committees, industry stakeholders, concerned citizens and even legislators. It seemed everyone had something to say.
Before landing on these final rules, the OLCC circulated a couple of drafts earlier in the month. Until Thursday, however, there were some key, unresolved issues in the proposed rules, including for grow size limits and wholesaler regulation. There was also some very specific but problematic treatment on the residency requirement issue. You can find our earlier take on each of those evolving topics here.
Ultimately, the rules coalesced in a form acceptable to most of the industry. There is some continued grumbling with regard to the residency requirements (which are likely unconstitutional, as we wrote here), but the OLCC did its best within the confines of HB 3400, adding a last minute provision that if an applicant does not meet the 51% Oregon-owned threshold “the Commission will hold that application under review until after the 2016 Oregon Legislature adjourns.” OAR 845-025-1115. It is now widely believed that the residency requirements will be struck in the next legislative session and we see this “application hold” as a green light to out of state investors with an interest in Oregon’s cannabis industry. This also creates doubt about how deeply the OLCC will dig in its residency review. Given this new rule, it seems less likely the OLCC will exhaustively audit background corporate documents, though an applicant without these documents is definitely increasing its risks.
As to grow site limits, a Tier I license for indoor growers allows these “producers” to cultivate up to 5,000 square feet of canopy space. Tier II producers may cultivate between 5,001 and 10,000 square feet of canopy. For outdoor producers, a Tier I license allows cultivation of up to 20,000 square feet, and a Tier II licensee can cultivate between 20,001 and 40,000 square feet of canopy (or nearly an acre). Note that the Tier II limit is smaller than what is allowed in Washington, where Tier III licensees may grow up to 30,000 square feet of designated plant canopy.
Other notable additions to the rules include a provision that allows Oregon Medical Marijuana Program cardholders employed at OLCC licensed stores to consume medical marijuana in those locations. This final draft also allows businesses to deliver marijuana to people 21 and older and to transport up to $100 worth of marijuana to a primary residence, provided the order is received before 4pm on the day of delivery, and not delivered past 9pm. Note though that the deliverer must have a retail license.
Because these rules are 77 pages long, there is far too much to cover in one post, and there is much left off here. We will be writing about these rules as applicable to each class of licensee in the weeks and months ahead. For now, entrepreneurs should begin preparing their application packages. Due to the intensive requirements as to that process, it is finally time to knuckle down.