OLCC Announces Proposed Rulemaking

This Halloween afternoon at 3:40 PM, the OLCC filed a notice of proposed rulemaking, available here.

According to the notice, the proposed rulemaking consists of revisions to Division 25 of Chapter 845 of the Oregon Administrative Rules which “align Division 25 with the changes made by the 2018 Oregon legislature (SB 1544) and make technical adjustments in response to lessons learned.”

Here are the Commission’s comments on the proposed new rules:

The amendments to OAR 845-025-1230 enable licensees to license unenclosed areas of a licensed premises. The change would enable licensees to demonstrate adequate security measures in lieu of having a fully enclosed facility. The Commission would maintain approval/denial on a case-by-case basis. The Commission forecasts this will provide more leeway for licensees and have a positive fiscal impact.

The amendments to OAR 845-025-1190 & 845-025-5540 enable the Commission to prescribe a time period in which an applicant for a license or a worker permit must submit required materials. Further, it gives the Commission the authority to deny applications that are missing required information, materials or fees. This would enable the Commission to lighten some of the backlog and provide service to licensees and permittees that have properly submitted all required materials. The Commission forecasts this will have a positive fiscal impact upon the industry as a whole.

The amendments to OAR 845-025-1060 and 845-025-7160 enable the Commission to charge a fee for licensees transferring package and label applications between licenses. The transfer of an application from one account to another requires staff to perform an additional review of the package or label to ensure the package or label is still in compliance with the rules. The Commission forecasts this that this will have a financial impact for some licensees; however, the packaging and labeling program is a fee-funded program.

The amendments to OAR 845-025-1015 and 845-025-1115 enable an applicant for a license to show good cause to overcome a prior criminal conviction that is a basis for license denial. The Commission forecasts that this will have a positive impact upon applicants, as they will have more clarity on how the Commission evaluates licensees ability based on prior criminal convictions.

The amendments to OAR 845-025-1430, 845-025-1440 and 845-025-1450 amend the camera coverage rules in several ways. First, the amendments to OAR 845-025-1440 clarify the Commission’s expectations around marijuana waste surveillance. Second, the amendments to OAR 845-025-1440 and 845-025-1450 propose a tiered sanction schedule for days of missing surveillance recordings per amount of missing footage and re-imagine the violation structure for violations of the camera rules due to issues within the industry. The Commission forecasts that these changes will have a positive impact upon the industry.

The amendments to OAR 845-025-2040 clarify that canopies must either be quadrilateral or that producers must use a surveyor licensed by the State of Oregon to prove that their canopies are within their licensed allowance. The Commission forecasts this will have a positive fiscal impact upon the industry, as it will provide licensees with an option to certify that their canopy is within the licensed limits regardless of shape. That said, licensees may incur costs to use this option.

The amendments to OAR 845-025-2060 reinstate the deadline of July 1, 2018 for producer applicants to qualify for the ability to bring marijuana genetics (i.e. plants, seeds, tissue cultures) into the regulated market, so long as they have submitted an application by the deadline. This concept was appropriate for the start of the market but essentially is a loophole in the seed-to-sale tracking system. The Commission forecasts that the continued allowance to bring genetics into the system will have a positive impact for applicants, as they will be able to bring new strains into the industry.

The amendments to OAR 845-025-2800 limit sales of medical marijuana in OLCC licensed retail stores to 4 oz. a day for patients or designated primary caregivers with a total allowance of 24 oz. in a month. In summer 2018, Commission became aware of large daily purchases of medical marijuana and enacted limits to curb the behavior it foresaw as possible diversion. The Commission forecasts that the proposed changes will have a positive impact upon both patients and retail stores; however, the Commission has heard significant comment on this issue and will take comments on the amounts into consideration.

The amendments to OAR 845-025-3255 sunset the shared kitchen allowance for edible makers on January 1, 2019. The Commission has found the concept to be particularly burdensome for compliance. Specifically, licensees implementing this business model have had difficulty maintaining schedules which in turn has caused trouble for OLCC enforcement staff. The Commission will allow current licensees to continue to operate and renew their licenses. The Commission does foresee that repealing this license operation type will have a potential negative impact to future applicants, but deems it necessary from a compliance standpoint to repeal the concept.

The amendments to OAR 845-025-3260 clarify the Commission’s requirements in regards to building and fire code certifications. The Commission has worked with processors and public safety officials to correctly apply the pertinent codes to these licensees. The Commission forecasts that these issues may continue to have a financial impact upon processor licensees. This is due to jurisdictional issues and the availability of personnel available to make such approvals in differing areas of the state.

The amendments to OAR 845-025-7750 clarify the Commission’s expectations of licensees around storage, security and camera coverage of marijuana waste. The Commission has adjusted the requirements for camera coverage of waste with more prescriptive language due to issues of diversion. The Commission forecasts these amendments may have an impact upon licensees.

The amendments to OAR 845-025-8520 clarify that the Commission considers a loss of access to the licensed premises a Category 1 violation, as the licensee has essentially lost control of marijuana items. The Commission forecasts that this could have an impact upon licensees who rent their location.

The proposed adoption of OAR 845-025-8575 clarifies the Commission’s practice of restricting license privileges when a licensee agrees to restrictions rather than pursue a contested case hearing. The Commission forecasts that this will have a positive fiscal impact upon licensees who face possible cancellation or a serious violation. Specifically, the rule will enable licensees to enter into an agreement with the Commission to continue to operate in a restricted manner and not lose their license.

The amendments to OAR 845-025-8580 clarify what activities are allowed during a license suspension. The Commission forecasts that these changes will help enable a licensee decide whether to pay a civil penalty or take a suspension when facing an administrative violation.

The amendments to OAR 845-025-8590 clarify how the Commission will treat a situation when the Commission discovers an unapproved interest in a license. Specifically, any individual found to have an unapproved interest in a license will be given a record of a poor record of compliance. This will be discoverable if the individual ever attempts to become licensed with the Commission. The Commission forecasts that this will have a neutral impact upon current licensees who are abiding by the law.