Oregon Liquor Control Commission Licensing Director Message: Marijuana Licensing Streamlining Update

January 8, 2021

A Phased Approach

Early in 2020 because interest to enter Oregon’s expanding recreational marijuana market continued to grow, it became clear that we needed a new approach for processing marijuana license applications. In response, my staff and I conducted a program evaluation in March 2020, to identify opportunities for improvement throughout the licensing program. Aside from the need for our staffing resources to grow to match the industry’s requirements (which we will continue to address with our legislative partners) we developed a formal year-long improvement strategy outlined below in three phases.

Phase 1: Streamlined license renewal process (Complete)

This included reducing the complexity of renewal applications, making licensing system updates and updating internal processes regarding renewals. Improvements to our renewal system went live August 4, 2020.

Outcome: Marijuana license renewals process times have been reduced from an average of 347 days from submission in Q4 2019, to 156 days from submission in Q4 2020. Current licensees should realize these improvements at their next renewal period occurring after August 4, 2020.

 

Phase 2: Removal of Pre-licensing Inspections and streamlining workflows (Complete)

In April 2020, the Commission eliminated the requirement to conduct pre-licensing onsite inspections before issuing a license, and during last summer we made improvements to licensing workflows by reducing redundant routine reviews of work and providing more empowerment to staff. Our evaluation showed this was taking as much as 40-50% of the processing time for new applications; these improvements removed that constraint.

Outcome: Marijuana license application process times from assignment have been reduced from an average of 168 days in Q4 2019 to the average of 61 days in Q4 2020.

 

Phase 3: Entrusting the Industry (Complete)

The overall philosophy of this change was rethinking how we address marijuana licensing. Specifically, phase 3 changes reduced the level of scrutiny for applicants who have already been vetted and previously licensed. Further, the agency reassigned personnel and added contract workers to solely focus on licensing activity. The Commission also approved “streamlining licensing,” rule changes at our October 15, 2020 Commission meeting.

Outcome: License application processing times approved during the month of December 2020, averaged 54 days from the date of assignment. These tangible changes have reduced the back and forth between applicants and the Commission.

 

The Readiness Checklist: Who’s ready? Who’s not?

In addition, we’ve implemented a new process to provide us more insight into applicants within our applicant pool by utilizing a request for assignment form (aka “The Readiness Checklist”). This process helps identify a marijuana license applicant’s desire to be assigned and enables them to self-determine their readiness to complete the license process within the required 60 day period.

As of November 16, 2020, my staff has reached out to all 881 “pre-pause” applicants, to determine their desire and readiness to be assigned. Pre-pause applicants include applications submitted prior to the June 15, 2018, pause on processing licenses. As of January 5, 2021, we have:

  • 319 or approximately 36% of the 881 applications are ready to be assigned
  • 360 or approximately 40% of applicants have said they are not ready
  • These applicants have delayed assignment by an average of 5 months.
  • 139 applicants not respond at all.
  • 49 application withdrawals.
  • The remaining 14 are in process.

As of January 6, 2021, we have assigned all applicants who’ve requested to be assigned as of that date. Additionally, as we receive requests for assignments, now we are consistently able to assign applications within two to four weeks of receiving the request for assignment form.

In addition to this progress on new marijuana license applications, we have been able to reduce the time it takes to assign change requests (e.g. location, ownership, etc.) from four to six months in Q3 2019, to approximately two months in Q3 2020. Moving forward, while we further refine our processes, our standard is to be able to assign these requests within 60 days of receiving them.

Regarding the non-responsive applicants, we’ve reached out to each one and subsequently followed up with those applicants prior to December 12, 2020 in order to provide a final opportunity for them to respond before inactivating their application.

Industry members and applicants should ensure they are monitoring any communications from the Commission and double check that the contact information affiliated with the license application is up to date.

 

The New Year: What’s next?

Earlier this year, OLCC Executive Director Steve Marks committed to reducing the backlog of license applications by one third by February 1, 2021; at the time he made that pledge that meant reducing our application pool by a total of 350 applications. The progress we have demonstrated leads me to believe we will meet, or come close to, accomplishing that goal. Should we not be able to, this will be in large part due to the number of applicants who’ve indicated they’re not ready to be assigned. As mentioned above, we are assigning applications within two to four weeks of receiving a request for assignment form. The average time to process a license application once it’s assigned was 61 days in Q4 2020; that’s a significant reduction and close to the new standard we’ve set.

With the changes we’ve made this year and at the current pace that we receive license applications, this should not be difficult to maintain going forward. These accomplishments truly deliver what the industry asked us to address, both in timeliness and predictability. We hope this serves as an example of how we will continue to work with the industry and to strive to improve and make Oregon a leader in the cannabis industry and a model for cannabis regulation.

As always, please don’t hesitate to reach out with feedback and guidance that will help us collectively make constructive improvements to the OLCC Recreational Marijuana Program.

Jason Hanson

OLCC Director of Licensing

Jason.hanson@oregon.gov

 

 

WSLCB Actions: New Permanent Rule For Certificates Of Compliance For Cannabis Business Locations And Extension Of Emergency Rules On Prohibition Of Vitamin E Acetate

January 6, 2021 Board Action

On Jan. 6, during a regularly scheduled meeting, the Washington State Liquor and Cannabis Board took the following actions:

Adopted Emergency Rules (CR-103E) Regarding Vitamin E Acetate

Emergency Rules (WAC 314-55-1055) – Marijuana Product Disclosure Form (Effective January 6, 2021)

Emergency Rules (WAC 314-55-1065) – LCB Vitamin E Acetate Prohibition (formerly LCB Vitamin E Acetate Ban) (Effective January 6, 2021)

Emergency Rules (WAC 314-55-077) – Marijuana Processor License – Privileges, Requirements and Fees (Effective January 6, 2021)

Emergency Rules (WAC 314-55-079) – Marijuana Retailer License – Privileges, Requirements and Fees (Effective January 6, 2021)

 

Adopted Permanent Rule (CR-103P)  Certificate of Compliance – location of business upon application submission)

Implementation of SSB 6206 – Marijuana Business Premise Certificate of Compliance (Effective February 6, 2021)

OLCC Recalls Contaminated Marijuana Products Sold Into Recreational Market

Product still in stores “locked” in Cannabis Tracking System to prevent new sales

OREGON:The Oregon Liquor Control Commission is issuing an immediate health and safety recall after identifying pesticide contaminated marijuana products sold through OLCC recreational marijuana licensed retailers. The OLCC has notified retailers to place a hold on all affected products.

The marijuana flower and extract products initially failed pesticide testing (for the analyte Abamectin) with a subcontracted laboratory, but the primary lab – Ecotest – marked that it passed testing in March 2020. The OLCC in September 2020 issued an immediate license suspension to Ecotest due to a number of violations, including the loss of accreditation from the Oregon Environmental Laboratory Accreditation Program (ORELAP) for failing to meet required testing procedures and standards (see OLCC press release). Later, the OLCC formally cancelled Ecotest’s license.

The contaminated marijuana originally entered the Oregon market from a medical grower transferring it into the OLCC regulated system. Oregon Medical Marijuana Program growers are allowed, with prior approval, to sell no more than 20 pounds of marijuana flower annually into the recreational system.

The contaminated product includes several strains of marijuana flower pre-rolls, and “Purple Slurry” extract. Due to the incorrect entry of results by Ecotest, when making the

Consumers can identify the affected products with the following information:

“Emerald Extracts Purple Slurry”

  • Manufactured by Emerald Treasure LLC (030-1008341A083)
  • Label Id = 2805
  • Made on 9/9/20
  • Tested by MW Labs (010-1008606C050) on 9/14/2020

Marijuana flower pre-rolls

  • Strains of “Qurkle,” “BP Oil Slick,” or “Green Crush”
  • Tested by Ecotest (010-1008170B3B6) on 3/12/2020
  • Sold from Bernie’s Universal Dispensaries in South Beach, OR

Consumers who have these recalled products should dispose of the products or return them to the retailer where they were purchased.

A table listing the retailers that sold the items and the approximate dates the products were sold is attached to the press release version of this communication, which can be found on the OLCC website.

The contamination issue was reported to OLCC on December 29, 2020 by a second processor whose extract product failed pesticide testing; their product was never sold to consumers. Using data from the Cannabis Tracking System, OLCC staff were able to verify the failed subcontracted test, trace the affected items in the system, and issue guidance to licensees to set aside the contaminated product.

Consumers who have these recalled products should dispose of the products or return them to the retailer where they were purchased.  Consumers can follow these instructions found on the OLCC Recreational Marijuana Program website to destroy marijuana on their own.

There have been no reports of illness. The possible health impact of consuming marijuana products with unapproved pesticide residues is unknown. Short and long-term health impacts may exist depending on the specific product, duration, frequency, level of exposure, and route of exposure. Consumers with concerns about their personal health should contact their physician with related questions. Consumers with questions or concerns about recalled product or pesticide residues in marijuana products are encouraged to contact the product retailer and/or the Oregon Poison Center at 800-222-1222.

Illinois Adult Use Cannabis Monthly Sales Figures 2020

ILLINOIS: The Illinois Department of Financial and Professional Regulation, Office of the Secretary, issued updated sales figures for the state’s adult use cannabis sales.

Here are the Illinois full year sales figures for 2020, broken out by monthly totals.

 

OLCC Commission Bans Some Additives from Cannabis Vaping Products

Additives linked to potential harm to cannabis consumers

More transparent ingredient disclosure required going forward

OREGON:  At its regular monthly meeting on December 17, 2020, the Oregon Liquor Control Commission banned two ingredients immediately from further use in cannabis vaping products — squalene and squalane. In addition, the Commission approved rules designed to provide better protection for cannabis consumers by requiring recreational marijuana licensees provide more transparent disclosure of, screening for, and labeling of inhalable cannabinoid products that use non-cannabis additives. The Commission also ratified five stipulated settlements.

The action taken against squalene and squalane comes in the wake of an OLCC investigation (see December 11, 2020 press release) that uncovered the use of those ingredients in cannabinoid vaping products sold in Oregon. The OLCC found that squalene and squalane were not disclosed as ingredients and were included on product labels as “natural flavors.” Studies, including one commissioned by the OLCC, have shown that squalene and squalane can produce harmful chemicals when exposed to heat and inhaled, posing potential harm to consumer health.

If the OLCC discovers any remaining products in the marketplace that contain squalene or squalane, those products will be subject to an immediate recall, a provision included in the new rules. Squalene and squalane join Vitamin E acetate on OLCC’s list of banned adulterants; as a result of the Commission’s actions, propylene glycol (PG) and triglycerides, like MCT oil, will be added to the list effective April 1, 2021.

The Commission began examining the impact of non-cannabis additives in the wake of the e-cigarette use-associated lung injury (EVALI) health crisis in mid-2019. During 2020, the OLCC held a series of discussions with cannabis industry stakeholders, public health officials and OLCC cannabis licensees to contemplate an approach for identifying and screening out non-cannabis ingredients added to cannabis products that pose a potential danger to human health. A framework for applying those standards was used to create the rules.

The approved rules will help the Commission protect health and safety by compelling greater ingredient disclosure, and to address both the acute and chronic health effects of additive ingredients when heated and inhaled by specifying the standards for non-cannabis additives being used in inhalable cannabinoid products. Because of the disclosure requirements, licensees and consumers will have greater assurance that any additives used in cannabis vape products were manufactured with the intent that they would be inhaled.

The rules take effect December 22, 2020, and the OLCC on that date will immediately begin accepting label applications under new rules for inhalable cannabinoid products. The Cannabis Tracking System (CTS) will be updated by that time to include a category for designating inhalable cannabinoid products.

Any inhalable cannabinoid products made on or after April 1, 2021, will be subject to the new rules, including no use of PG or MCT and full disclosure of additive ingredients on the item’s label. By April 1, all inhalable cannabinoid products (regardless of manufacture date) must also be tracked in CTS with disclosure of the additive mix used in the cannabinoid product.

From April 1 to July 1, 2021, OLCC recreational marijuana licensees are allowed to “sell down” any inhalable cannabinoid products made before April 1, 2021. Beginning July 1, 2021, all inhalable cannabinoid products in the marketplace must comply with the new rules and standards, and anything that does not comply, regardless of manufacture date, must be destroyed.

The Commission also ratified the following violation fines and suspensions based on stipulated settlements (detailed information on specific cases can be found here on the OLCC website):

SHADOWBOX FARMS (#1467A) will serve an 32-day recreational marijuana producer license suspension OR pay a fine of $5,280 for one violation.

Licensee is: Rogue Valley Group, LLC; Tim Winner, Manager; Artemis Group, LLC, Member; Joseph Bundy, Member; Megan Bundy, Member; Bryan Bundy, Member.

FLOWERSMITH will serve a 14-day recreational marijuana producer license suspension OR pay a fine of $2,310 for two violations.

Licensees are: Flowersmith, LLC; Samuel Felton, Member; Gavin Henner, Member

BLACK MARKET DISTRIBUTION will serve a 69-day recreational marijuana wholesaler license suspension OR pay a fine of $11,385 for three violations.

Licensees are: Black Market Distribution, LLC; Aaron Mitchell, Member; Rosa Cazares, Manager.

COPPERHEAD ORGANIC FARMS will surrender its license at the earlier of the date of transfer of ownership of the business or February 19, 2021 for four violations.

Licensees are: CH Organics, LLC; Corey Tarr, Member; Debra Davis Estate, Member.

Maine Cannabis Retailers Sell $1.4 Million In First Month Of Legal Sales

State regulators enhance online transparency dashboard with sales metrics.

MAINE:  Preliminary sales data from regulators at the state’s Office of Marijuana Policy indicate Maine’s marijuana retailers grossed approximately $1.4 million and made 21,194 transactions during the first month of retail sales. The data, which was extracted from the state’s inventory tracking system, Metrc, shows that smokable marijuana made up 76 percent of sales, while concentrates and infused products accounted for 14 percent and 10 percent, respectively.

Maine’s adult use market launched on October 9 and saw sales from six active licensees that month. An additional three adult use retailers opened their doors during the first week of November. The reporting period covers sales made from Maine’s retail sales launch date of October 9 through the end of the day on November 8, a total of 31 days.

“While it is easy to focus solely on the numbers, it is important to note that the Office of Marijuana Policy’s primary objective is maintaining the high standard of public health and safety we have set for the adult use program,” said OMP Director Erik Gundersen.“We appreciate the commitment our licensees have demonstrated to enact COVID protocols to ensure a safe launch and their continued commitment to these efforts in light of the recent spike in COVID cases in Maine.”

Adult use monthly sales totals and product types have been added to OMP’s existing transparency dashboard, available here. The initial data set includes the first month of retail sales. Beginning in December, sales information will be updated monthly with the preceding month’s totals.

Sales data are preliminary in nature, subject to further revision and have not been audited. The Office is responsible for the oversight of all aspects of legalized marijuana, including Maine’s existing Medical Use of Marijuana Program.

Governor Northam Announces Support for Legalizing Adult-Use Marijuana in Virginia

Governor says, “The time has come to legalize marijuana in our Commonwealth, and Virginia will get this right.”

VIRGINIA:  Governor Ralph Northam today announced that he will introduce and support legislation to legalize marijuana in the Commonwealth of Virginia. The announcement comes as the Northam Administration prepares to release a report on the impact of legalizing adult-use marijuana, which was compiled with robust input from government officials, policy experts, healthcare professionals, and community leaders.

“It’s time to legalize marijuana in Virginia,” said Governor Northam. “Our Commonwealth has an opportunity to be the first state in the South to take this step, and we will lead with a focus on equity, public health, and public safety. I look forward to working with the General Assembly to get this right.”

The Northam Administration is working closely with lawmakers to finalize legislation in advance of the 2021 General Assembly session. Today, Governor Northam made clear that any legislation to legalize adult-use marijuana will need to address the following five principles.

  • Social equity, racial equity, and economic equity. Marijuana prohibition has historically been based in discrimination, and the impact of criminalization laws have disproportionately harmed minority communities as result. A report of the Joint Legislative Audit and Review Commission (JLARC) issued today found that Black Virginians are arrested and convicted for marijuana use at more than three times the rate of white Virginians. Legislation should focus on undoing these harms by including initiatives such as social equity license programs, access to capital, community reinvestment, and sealing or expunging records of past marijuana-related convictions.
  • Public health. Legislation should include substance abuse prevention efforts in schools and communities.
  • Protections for young people. As a pediatrician, Governor Northam will require any legislation include protections for Virginia’s youth, including age limits, mandatory ID checks, and education campaigns.
  • Upholding the Virginia Indoor Clean Air Act. Legislation should be aligned with the Virginia Indoor Clean Air Act prohibiting indoor tobacco use, which Governor Northam championed as a state Senator.
  • Data collection. Legislation should ensure Virginia collects appropriate and ongoing information on safety, health, and equity.

In 2020, Governor Northam signed legislation that decriminalized simple marijuana possession in Virginia. The legislation also required the Secretaries of Agriculture and Forestry, Finance, Health and Human Resources, and Public Safety and Homeland Security to convene a Virginia Marijuana Legalization Work Group to study the impact on the Commonwealth of legalizing the sale and personal use of marijuana and report the recommendations of the work group to the General Assembly and the Governor by November 30, 2020.

Washington: WSLCB Notice Of Proposed Rules

October 28, 2020

Notice of Proposed Rules – WSR #20-22-042

The Washington State Liquor and Cannabis Board invites your input on proposed rules regarding marijuana license qualification and application process rules described in chapter 314-55 WAC.

This notice and other relevant rulemaking materials may be viewed at lcb.wa.gov/laws/laws-and-rules under Proposed Rules.

The Liquor and Cannabis Board encourages your participation in the rule making process by giving input on this rule. The board will hold at least one public hearing before the rules are adopted.

Public Comment

Please forward your initial comments to the Liquor and Cannabis Board by mail, e-mail, or fax by December 9, 2020.

By mail:   Rules Coordinator                       By e-mail:                 By fax:
                 Liquor and Cannabis Board      rules@lcb.wa.gov    360-664-9689
P.O. Box 43080
Olympia, WA  98504-3080

Public Hearing: December 9, 2020, 10:00 a.m.

In response to the coronavirus disease 2019 (COVID-19) public health emergency, the Board will not provide a physical location for this hearing to promote social distancing and the safety of the citizens of Washington state. A virtual public hearing, without a physical meeting space, will be held instead. Board members, presenters, and staff will all participate remotely. The public may login using a computer or device, or call-in using a phone, to listen to the meeting through the WebEx application. The public may provide verbal comments during the specified public comment and rules hearing segments.

For more information about board meetings, please visit https://lcb.wa.gov/boardmeetings/board_meetings

Vermont Governor Phil Scott OKs Bill Creating Regulated Cannabis Market

VERMONT: Governor Phil Scott today announced action on a range of bills, including the Legislature’s bill to create a regulated cannabis market in Vermont, which will be allowed to go into law without his signature.

Throughout the Legislature’s four-year push to create a regulated cannabis market, Governor Scott has consistently called for any legislation to include a plan and funding for expanded education and prevention programs for Vermont kids, a plan for highway safety and the ability for communities to prohibit retail cannabis businesses. Governor Scott said the Legislature has moved slowly toward his position in these areas.

“This new bill requires cities and towns to authorize these businesses before retail establishments may open. It ensures local zoning applies to cannabis cultivation and production. It dedicates 30% of the excise tax, up to $10 million per year, to education and prevention efforts. And the sales and use tax on cannabis would fund a grant program to expand after school and summer learning programs,” the Governor said. “Additionally, the FY21 budget includes language I proposed to move toward a universal after school network, which is based on a successful model from Iceland and is focused on preventing drug use and improving academic and social outcomes.”

The Governor also highlighted several new provisions to enhance safety on the roadways, including allowing testimony of trained officers and Drug Recognition Experts regarding impairment to be presumed admissible in court, and accepting saliva testing as evidence if performed.

Though these provisions addressed many of Governor Scott’s longstanding concerns, he also called for additional action from the Legislature to address remaining deficiencies in the bill.

“Their work is not done,” he said. “The Legislature needs to strengthen education and prevention – including banning marketing that appeals in any way to our kids – otherwise they are knowingly failing to learn the lessons of the public health epidemic caused by tobacco and alcohol.”

While recognizing that some social justice elements are included in the bill, Governor Scott also noted concerns from communities historically most negatively affected by cannabis enforcement that the bill did not do enough to ensure more equity in this new market. He encouraged legislators to revisit these concerns and work with his Administration and these communities to address them in January.

His letter to the Legislature outlines specific areas for consideration on racial equity, changes to the board appointment timeline and accountability structure, creation of a special fund for education programming and a ban on the sale of vaping products and marketing that appeal to kids.

“This has been a top priority for the majority in the Legislature for four years, but their work is not complete. They must ensure equity in this new policy and prevent their priority from becoming a public health problem for current and future generations. For these reasons, I am allowing this bill to become law without my signature,” concluded Governor Scott.

Click here to view the Governor’s letter to the Legislature regarding S.54.

Governor Scott also allowed S.119 to go into law without his signature, noting he agreed with the goals of the legislation but urged lawmakers to revisit the hastily drafted bill with additional input from marginalized communities and public safety officials.

Click here to view the Governor’s letter to the Legislature regarding S.119.

In addition, Governor Scott signed several other bills today:

  • S.24, An act relating to a report on racial equity and bias in the Department of Corrections, which accelerates work to develop a racial equity plan that will include data collection, employment and supervision of people under the custody of the Department of Corrections;
  • S. 124, An act relating to governmental structures protecting the public health, safety and welfare, which makes changes to law enforcement training and policy;
  • S.234, An act relating to miscellaneous judiciary procedures, which orders the expungement of all criminal records relating to the possession of cannabis in amounts that have been decriminalized; and
  • S.352, An act relating to making certain amendments to the Front-Line Employees Hazard Pay Grant Program, which updates the hazard pay program passed earlier this year.

To view a complete list of action on bills passed during the 2020 legislative session, visit https://governor.vermont.gov/governor-scotts-blog/2020-legislative-session.

WSLCB Issues Emergency Suspension To Okanogan County Marijuana Producer

El Rey De La Kush suspended for alleged distribution of product out of state

WASHINGTON: Washington State Liquor and Cannabis Board (WSLCB) officers today issued an emergency suspension to Tier 1 producer El Rey de La Kush (license number 428922) located in Riverside, WA. The suspension, effective immediately, is for alleged diversion of product out of the state.

On September 16, 2020, the Wenatchee Police Department notified WSLCB officers of a case they were investigating involving 4.3 pounds of marijuana that had been shipped from a residence in Wenatchee via the United Parcel Service (UPS). A search warrant was served at the residence where approximately 620 pounds of marijuana was discovered. The marijuana had WSLCB traceability system tags associated with El Rey De La Kush.

The suspect in the case, Brandi Clardy, is directly affiliated with El Rey De La Kush and listed as “Other” on the license. The licensee for El Rey De La Kush, Juan Penaloza, died in July 2020. Clardy has been operating the business since his death.

In an interview with the Wenatchee Police Department, Clardy admitted to unlawfully removing marijuana from the licensed premises for the purposes of distributing marijuana out of state

Based on federal enforcement priorities, the WSLCB’s three highest priorities for regulating Washington’s licensed marijuana operation are:

  1. Preventing the criminal element from entering the system;
  2. Keeping marijuana out of the hands of minors; and
  3. Preventing diversion of product out of state.

Marijuana products from El Rey De la Kush were actively being diverted out of a legal licensed producer/processor, to Texas, where marijuana is illegal. The blatant disregard to follow the laws established by the state of Washington for a safe and regulated marijuana market warrant the emergency suspension pending cancellation of this license.

The license will remain suspended for a period of 180 days, during which the WSLCB will pursue permanent revocation.

Emergency suspensions represent an extraordinary exercise of the state’s power and the WSLCB is mandated to ensure that an emergency suspension is reasonable, justifiable and legal. This is only the second Board-issued emergency suspension of 2020.