OLCC Action on Governor Brown’s Vaping Executive Order

Commission Will Meet to Pass Emergency Temporary Rules

OREGON: The Oregon Liquor Control Commission (OLCC) will meet next week to act on the Executive Order on the Vaping Public Health Crisis issued today by Oregon Governor Kate Brown.  The Governor’s order directs the Oregon Health Authority (OHA) and the OLCC to enact a temporary ban on the sale of flavored vaping products, as well as other sources or additives that public health investigators link to the vaping-related illness.

Governor Brown emphasized protecting Oregonians’ health as the primary focus of her action, by removing possibly unsafe products from the marketplace, discouraging vaping by children and youth, and reducing human exposure to potentially dangerous chemicals.

Brown further encouraged Oregonians to stop using vaping products until more is known about the cause of the respiratory illness.  The Governor also called on the Federal Drug Administration (FDA) to step in to regulate flavored vaping products and additives.

The order directs both agencies to enact a 180-day ban on all flavored vaping products and to develop plans within 90 days to address consumer warnings about the dangers of vaping, vaping product ingredient disclosure, product safety tests of vaping equipment, improved health care provider reporting of vaping lung injuries to OHA, and creating a statewide prevention and education campaign aimed at discouraging the use of vaping products.

The Governor is also asking the agencies to develop proposals for long-term solutions to present to the Legislature during the 2020 legislative session.  Governor Brown will include the OLCC in a Vaping Public Health Workgroup tasked with studying the vaping illness crisis and making recommendations to the legislature.

“We will act quickly on the Governor’s directive to address this growing public health crisis,” said Steve Marks, OLCC Executive Director.  “The OLCC will utilize the real-time findings of public health officials here in Oregon and across the country as they continue their investigation into the cause of the vaping respiratory illness outbreak.  We’ll let scientists guide us as we contemplate taking additional actions with a measured approach.”

The OLCC Commission will act on temporary rules proposing to ban licensed marijuana retailers from selling any cannabinoid (marijuana and hemp) products containing any flavor, including non-marijuana terpenes.  In this interpretation the OLCC does not include terpenes derived from marijuana as a “flavor.”  The temporary rule will also prohibit licensed processors from manufacturing or distributing those same products.

After the Commission acts the OLCC will provide further guidance to licensees about taking inventory of flavored or non-marijuana terpene-containing products, removing them from retail store shelves and setting those items aside.  The OLCC will make compliance checks at licensed processors and retailers to make sure affected product is not being offered for sale.

Washington Medical Marijuana After July 1

By Aaron Pelley and Anne van Leynseele

Many clients and potential clients have been asking NWMJLaw about the changes coming to Washington State’s medical marijuana system when the new laws take effect on July 1, 2016. Specifically, we have been asked how the collective garden statute being repealed will affect patients and Farmers’ Markets.

Farmers’ Markets

Across Washington State there are Farmers’ Markets where medical cannabis patients can obtain their medicine without donating to a shop with high overhead, the savings is passed to the patients. These markets have become popular over the last five years because they allow the patients, in most cases, to connect with the grower and gain valuable information about the particular strain they are receiving. The biggest benefit to patients is the price comparison; where a requested donation for 3.5 grams can be as high as $60 dollars at some dispensaries, it is usually $25 dollars directly from the vendor.

Also, patients can choose the grower they like and access a wealth of information. Currently, the defensibility of these markets is under the collective garden model (RCW 69.51a.085). The statute allows up to 10 qualifying patients to participate in one garden. This not only applied to markets, but to access points and “large scale” medical grows. However, the section fell silent on the amount of time the patient must be a member of the garden to be considered a “true member.” So for most markets interested in operating with the least amount of risk, the best method was to rotate members in and out of the garden/vendor. For example, a patient would be sign in at 10:42am conduct their donation, accept their cannabis, and sign out of the garden at 10:45am, leaving space for the next patient to then come “into the garden” as a member.

Under the new system, RCW 65.51a.085 will be repealed and replaced with a medical cooperative model. This marks the end of Farmers’ Markets, Access Points, and “large scale” medical grows. The new medical cooperative garden model changes the system. The biggest change to farmers’ markets specifically by limiting both membership and timelines.

Beginning July 1, 2016, up to four patients who are registered in the DOH database can join together to form a cooperative garden. Patients or designated providers who participate in a cooperative may grow the total number of plants authorized for the participants (6-15) with no more than 60 plants total per tax parcel. The cooperative must be registered with the state and include the names of all participants. If a patient no longer participates in the cooperative, they must notify the LCB within 15 days of the withdrawal from the cooperative. Furthermore, additional patients may not join the cooperative for 60 days starting from the date of notification of the exiting member. This means the basis for the farmers’ markets has been removed. In the eyes of law enforcement anyone participating is just selling pot and can be convicted with little or no defense available.

If you were looking to find a way to serve patients in a market setting as the designated provider, by providing for multiple patients, that was also done away with in 2011. A designated provider may not serve more than one patient within a 15-day period. Simply put, as a market, your options have run out.

Collective Gardens and Scaled Grows.

Over the years, patients, defense attorneys, and even prosecutors got morecreative to address the astonishing number  of patients needing access to an adequate supply of cannabis. Not all patients are able to grow their own cannabis due to medical issues or simply because they lack the skill needed. Standard collective gardens allowed up to 10 patients to come together to grow a maximum of 45 plants. This model allowed large scale grows to operate and ensure every patient could have an adequate supply of RCW 69.51a.085 fell silent on the boundaries of a collective garden. Since a collective garden could only have 45 plants, it became practice that multiple collective gardens could exist on the same property as long as each garden was distinguished from the others.

As of July 1, 2016 this section of the law will be repealed, leaving large scale grows illegal. The collective garden statute is replaced with a new medical cooperative garden model where up to four patients who are entered in the database can join together to form a cooperative garden. Patients and designated providers who participate in a cooperative may grow the total number of plants authorized for the patient (6-15 plants each) and no more than 60 plants total. The cooperative must be registered with the state, include the names of all patients, and located at the home of one of the participating patients. The garden is subject to inspection at any “reasonable” time to ensure compliance with the new limits.

Dispensaries (Access Points)

Since the early 2000s patient access points, commonly know as dispensaries, operated despite repeated bans, raids, polite robberies, and city or county enforced shut downs. The repeal of RCW 69.51a.085 from the Collective Garden Statute will effect the medical marijuana supply chain as it applies to dispensaries. Similar to the Farmers’ Markets model, dispensaries relied on rotating members in-and-out of their collective gardens or some operate as a designated provider. Patients would walk in to the access point/dispensary, have their recommendations verified through an online verification with no need to disclose their qualifying condition, and then signed into the garden to obtain their medical cannabis for their qualifying condition. With the repeal of collective garden statute, the entire medical system is being folded into the recreational market. If they could meet the standard, dispensary owners opted to obtain an LCB license with a medical endorsement or now must close their retail store.

After July 1, 2016, access points will be placed back into the category of outlaws. The legal defense that was artfully crafted over the years is now set to expire and the arguments and tactics that have kept countless people out of jail will expire with them.

Actions that Can Cause Legal and Business Problems

In sum, there is a concise list of activities that should end by midnight June 30, 2016.

• Selling cannabis at farmers’ markets on a “rotating-member model”

• Collective or large scale medical grows

• Any 502 licensee or 502 applicant or license holder should understand the risk to their license should they continue to grow illegally

This memo is made available by NWMJ Law for educational purposes only as well as to provide a general information and a general understanding of the law, not to provide specific legal advice. By providing this letter there is no attorney client relationship between you and NWMJ Law. This letter should not be used as a substitute for legal advice from a licensed attorney in your state.

NWMJLaw Bootcamp Series: Employee Management And Conflict Resolution

WASHINGTON: As the industry evolves and businesses get past the initial pressures of getting licensed and through the first few months of operations, we see two issues emerge that are worth an in-depth exploration.

This week in Seattle, Aaron Pelley and Anne van Leynseele of NWMJ Law will lead an open discussion with stories from the frontline about employees and conflicts. This event, held Tuesday, June 21st at the MJBA Seattle June monthly meetup.

The third in a business bootcamp  for Washington’s licensed cannabis business owners, the discussion will cover a wide range of situations that arise in these areas including: hiring and firing; how to set employee performance standards; NDA and non-compete contracts; AVN risks; and partnership disputes. Do not miss these two seasoned cannabis attorneys as they share real world situations and offer their sound advice on how to avoid troubles and tips on solving problems before they cause damage to your company.