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

 

 

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.

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.

OLCC Rules Advisory Committee Meeting – Marijuana Licensing Streamlining Rules Package

***Please note that the meeting begins at 9:30 AM***

OREGON: This past fall the Commission implemented temporary rules to expedite and refine the recreational marijuana licensing process. The proposed amendments integrate a more efficient licensing process and reduce required documentation that must be submitted as part of a license application. Applicants will still be required to satisfy the same substantive requirements to receive a license. The Commission’s proposed rule language that will be discussed can be found here:

Due to the outbreak of COVID-19, we are holding Rules Advisory Committee meetings virtually. Please note that invited committee members and OLCC are the only persons allowed to participate in the discussion. Please be respectful and mute your phone.

 

To listen to the meeting, use the call-in information below;

 

Date and Time:       9:30am – 12:30pm, Wednesday, December 16th, 2020

Location:                 Virtual

 

To listen to the meeting, dial: 1 (571) 317-3122; Access Code: 258-917-013

 

OLCC discusses COVID Impacts to the Hospitality Industry

Advocates for Industry Support with Legislative Changes

Reaches Settlements over Social Distancing Infractions

OREGON:  The Oregon Liquor Control Commission opened its regular monthly meeting on November 19, 2020, by learning about the slump in Oregon’s brewing industry, which is similar to the impacts felt in other alcohol industry sectors and the hospitality industry as a whole.  A representative from the Oregon Brewers Guild provided an overview of the effect of the COVID-19 pandemic on the brewing industry including: a downturn in sales, the impact of brewers transitioning to canning, and the subsequent cost increases with canning related to overall market shortages in aluminum cans.

Commissioners continued their ongoing discussion about the overall difficulties currently faced by the alcohol industry, especially the bottom-line impact of the freeze period and the issue of “cocktails-to-go.” The OLCC has updated its “Freeze Period” FAQs – find them here on the OLCC website under the COVID-19 Resources tab, click on the Business Continuity Information – Alcohol link.

OLCC alcohol licensees continue to contact staff and individual Commissioners to voice support for allowing licensed bars and restaurants to sell cocktails-to-go, which is currently prohibited by law, and requires action by the legislature to change. Commissioners Kiauna Floyd, Hugh Palcic, Matt Maletis and Jennifer Currin emphasized that the hospitality industry needs to work with Oregon legislators and fellow licensees to change the law; only then will the Commission be able to create rules giving bars and restaurants the privilege to sell cocktails-to-go.

At the same time that the Commission has been working to reduce regulatory and financial burdens on the industry, the OLCC has had to ensure that licensees are following face covering, and social distancing guidelines. That was reflected in settlement agreements with two licensees that had failed to follow those requirements, and received immediate license suspensions.

“I really liked how these were handled,” said Paul Rosenbaum, OLCC Commission Chair “I hope other licensees understand that we’re serious about the enforcement of these regulations.”

The Commission subsequently approved those two alcohol stipulated settlements.

Coos Speedway (L) in Coos Bay, engaged in activity that violated the Oregon Health Authority’s (OHA) Statewide Mask, Face Shield, Face Covering Guidance issued on July 24, 2020, when it failed to require its patrons and employees to wear appropriate face masks, face shields, or face coverings at the premises. The licensee has accepted responsibility and has agreed to serve a 33 day suspension and pay $2,475 civil penalty, in addition to the time served under the order of immediate suspension which ran from August 20, 2020, to October 7, 2020. Licensee is Hwy 42, LLC; Drake Nelson, Managing Member; Kimberly Nelson, Member.

Top of the Bowl (F-COM) in Drain, engaged in activity that violated the Oregon Health Authority’s (OHA) Statewide Mask, Face Shield, Face Covering Guidance issued on July 24, 2020, when it failed to require its patrons and employees to wear appropriate face masks, face shields, or face coverings at the premises. In addition, Licensee engaged in activity that violated OHA’s Phase Two Reopening Guidance for Restaurants and Bars, issued on July 24, 2020, when parties of patrons were not required to maintain at least six (6) feet distance between one another; employees failed to maintain at least six (6) feet distance from patrons while taking orders or providing services; and frequent disinfecting of touch points was not implemented. The licensee has accepted responsibility and has agreed to serve a 50 day suspension in addition to the time served under the order of immediate suspension which ran from September 29, 2020 to November 19, 2020. Licensee is Top of the Bowl, LLC, and Jamie Hennricks, Managing Member.

The Commission also approved one alcohol stipulated settlement licensing agreement.

Craving Cave (F-COM) in Ashland, since 2015, Applicant has been convicted of seven motor vehicle violations. In the absence of a restriction, the violations would provide a basis for denial of the F-COM application. Under the proposed settlement agreement, Applicant agrees to accept a restriction on the license, stating that Applicant will not be convicted of driving while suspended, driving uninsured, operating a vehicle without driving privileges, driving in violation of restrictions, or a similar conviction, in the State of Oregon or in any other state. Applicant is Cravingcave, LLC; Adrian Gonzalez Hernandez, Managing Member.

OLCC Approves Recreational Marijuana License Stipulated Settlements

Receives updates on Portland’s Cannabis Equity program, Voter-approved ballot measures

OREGON:  At its regular monthly meeting on November 19, 2020, the Oregon Liquor Control Commission approved eight recreational marijuana license stipulated settlements. Additionally, the City of Portland’s Cannabis Policy Oversight Team (CPOT) provided the Commission with an update on the Portland Cannabis Program.

CPOT reviewed its efforts to make equity the center of all decision-making efforts related to cannabis regulation, including ensuring that patients should have access to cannabis for medicinal purposes. CPOT is also reworking its cannabis grant program to focus on distributed funding to BIPOC recipients.

OLCC staff provided assessments of how two ballot measures approved by Oregon voters earlier this month could impact the agency.

Measure 109, which establishes a program for the therapeutic use of psilocybin mushrooms directs the Oregon Health Authority (OHA) to enter into an agreement with the OLCC to use the state’s Cannabis Tracking System (CTS) to prevent psilocybin diversion from therapy program. OLCC has initiated conversations with its CTS vendor the OLCC has deferred further action, until OHA currently busy with pandemic can begin implementing the program.

One provision of Measure 110 reclassifies some drug convictions which will impact the evaluation process of OLCC licensee and permitee applicants. Currently the OLCC rarely makes a license or permit decision based solely on drug convictions, but there are differences between the OLCC’s alcohol and recreational marijuana licensing and permitting criteria that will now be reconciled; this might require the OLCC to enter into rulemaking.

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):

LA MOTA (#28CC) in Portland will serve an 18-day recreational marijuana retailer license suspension OR pay a fine of $2,970 fine for two violations.

Licensee is: La Mota, LLC, Co-Licensee; Aaron Mitchell, Member; Rosa Cazares, Co-Licensee.

VIBRANT HIGHS will surrender its marijuana processor license suspension for one violation.

Licensees are: OGX, LLC; Paul Luttrell, Member; Jonathan Showker, Member; Kathy Cook, Member.

 LA MOTA FRONT AVE in Portland will serve a nine-day recreational marijuana retailer license suspension OR pay a fine of $1,485 fine for one violation.

Licensees are: La Mota Front Ave, LLC, Co-Licensee; Aaron Mitchell, Member; Rosa Cazares, Co-Licensee.

EVIO LABS MEDFORD in Medford will surrender its recreational marijuana laboratory license suspension for four violations.

Licensees are: Smith Scientific Industries, Inc.; Anthony Smith, President/Director/Stockholder; William Waldrop, Secretary/Director; EVIO, Inc., Stockholder; Lori Glauser, Director/Stockholder; William Waldrop, Director/Stockholder.

MR NICE GUY RETAIL in Corvallis will serve a 10-day recreational marijuana retailer license suspension OR pay a fine of $3,630 fine for two violations.

Licensees are: MNG Holdings, LLC; Michael NG, Member; Patrick Martin, Member.

MR NICE GUY RETAIL in Salem will pay a fine of $280 for one recreational marijuana retailer license violation.

Licensees are: MNG Holdings, LLC; Michael NG, Member; Patrick Martin, Member.

NECTAR in Salem will serve a seven-day recreational marijuana retailer license suspension OR pay a fine of $1,155 fine for two violations.

Licensees are: Nectar Markets, LLC; Nectar Holdings, Inc., Member; Jeremy Pratt, President/Director/Stockholder; Jeffrey Johnson, Vice-President; Michael Olson, Secretary/Treasurer.

ALBION FARMS will serve an 18-day recreational marijuana producer license suspension OR pay a fine of $2,970 fine for two violations.

Licensees are: MediRec, LLC; Vandaly Industries, Inc., Member; Eric Buckner, President.

OLCC Notice of Public Hearing: Marijuana Additives

Notice of Public Hearing: Marijuana Additives

Date and Time:      Monday, November 16, 2020, 2:00 – 3:00 p.m.

 

Location: Virtual Meeting and via Telephone

To listen to, or participate in, this Public Hearing please call: 1 (571) 317-

3112 and enter access code: 497-665-445#

 

In order to offer oral comment, please email: OLCC.rulemaking@oregon.gov, no later than 9:30 am on Monday, November 16, 2020. The hearing will end at 2:15 pm, if no interested parties have emailed to offer comment by 9:30 am; or 5 minutes after the last oral comment has been recorded into the record.

 

Presiding Officer:  Madeline Kane

Phone: 503-801-5322

Email: olcc.rulemaking@oregon.gov

 

Notice of Proposed Rule-making, including Statement of Need and Fiscal Impact

This rule package updates the requirements for inhalable cannabinoid products that use non-cannabis additives. The rules are being amended to address technical fixes, define and clarify the requirements for non-cannabis additives in inhalable cannabinoid products, and require more transparent ingredient labeling in order to better enable informed choice by consumers. These rules are intended to reinforce the Oregon Liquor Control Commission’s ability to protect public health and safety, by specifying the standards for non-cannabis additives being used in inhalable cannabinoid products related to disclosure of ingredients and declarations of intended use.

 

All written comments must be received by 5:00 p.m. on Monday, November 23, 2020.

Oregon: OLCC Commission Greenlights Solution For Streamlining License Applications

Commission supports “fix-it ticket” approach for minor compliance violations

Marijuana license stipulated settlements approved

OREGON: At its regular monthly meeting on October 15, 2020, the Oregon Liquor Control Commission moved forward with plans to streamline the agency’s recreational marijuana licensing process and adjust compliance and enforcement activity through a Verification of Compliance (VOC) program. The Commission also approved five marijuana violation stipulated settlement agreements.

OLCC has been challenged to timely issue marijuana licenses since April 2016, due to the continued interest in the recreational market. Personnel and technology support have not kept pace with license applications that quickly shot past the initial projection of 800 licenses and now number more than 2,300.

As the industry has matured, the agency’s ability to regulate it has evolved and the OLCC has modified its licensing process several times in an attempt to streamline. This latest licensing process adjustment attempts to make it easier for applicants to begin operating before the final approval of changes in ownership and financial interest changes in a licensed business.

Likening the existing license process to a freeway that squeezes from 10 lanes down to two, the Chair of the Commission cautioned that efficiencies made through continuous adjustments to the licensing process would not be enough to address the long term licensing challenge.

“We’re not kidding ourselves, if we don’t get the manpower, the back end is going to be two lanes regardless of the ten lanes up front,” said Paul Rosenbaum, OLCC Chair. “If we don’t get the budget, we’re not going to solve this issue.”

For now, this licensing catch-up attempt will be similar to past efforts where staff were reallocated to the licensing division. Under this push to catchup, 16 OLCC staff members will be temporarily reassigned to licensing.

In addition to approving a temporary rule allowing the license process change, the Commission also initiated the permanent rulemaking process, which will expand the scope of the streamlining, as well as provide an opportunity for industry input.

The Commission also initiated the permanent rule making process for the new Verification of Compliance (VOC) program. The VOC program, which launched October 1, 2020, provides licensees with an opportunity to fix problems and avoid more severe penalties.

See Recreational Marijuana Program Compliance Education Bulletin 2020-05 for more information on the Verification of Compliance program.

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):

GREENRIDGE AGRONOMY will serve a 65-day recreational marijuana producer license suspension OR pay a fine of $5,775 AND serve a 30-day license suspension cfor six violations.

Licensee is: GreenRidge Agronomy, LLC; Stanley Tamiyasu, Member; Brandon Pierson, Member.

HEALING GREEN DISPENSARY in Independence will surrender its marijuana retailer license suspension for two violations.

Licensees are: Healing Green, LLC; Michael Hecht, Member.

KAYA FARMS (#A8DF) will surrender its recreational marijuana processor license suspension for two violations.

Licensees are: Sunstone Marketing Partners, LLC; Robert Frey, Member/Manager.

KAYA FARMS (#035C) will surrender its recreational marijuana producer license suspension for three violations.

Licensees are: Sunstone Marketing Partners, LLC; Robert Frey, Member/Manager.

UPMQUA GREEN CROSS in Roseburg will surrender its recreational marijuana retailer license suspension for seven violations.

Licensees are: Umpqua Green Cross, LLC; Edward Allen, Member.

OLCC Streamlining Marijuana License Applications

Temporary Rule Changes

OREGON:  On October 15, 2020, the Commission adopted temporary rules intended to provide relief to the industry and allowing OLCC greater flexibility in the processing of marijuana license applications. The main changes implemented in these temporary rules are:

  • Revising the definition of who needs to be identified as an “applicant” for the license, including raising the threshold from the 10% to 20% ownership.
  • Changing license application requirements, including reducing the amount of information and documentation which was previously required.
  • Modifying when OLCC may request fingerprints for a background check to once per license year, rather than specifically in conjunction with a renewal application.
  • Applicants can change the location of their proposed licensed premises prior to licensure, except for Producers who are prohibited by law from making that type of change until January 2022.
  • Changes to notification and pre-approval requirements when licensees make changes to business structures or financial interests (see below).
  • Simplified paperwork requirements for Producer propagation endorsement and medically designated canopy registration.

In the coming months, the Commission will go through a permanent rulemaking process to finalize the rules, making adjustments based on feedback from the industry and other stakeholders. Anyone wanting to provide comment or input on proposed rules should subscribe to OLCC’s email updates to stay apprised of the most recent activities, including dates and deadlines for public comment.

 

License Application Streamlining

In light of the current licensing backlog, Commission staff have been developing a comprehensive strategy to improve the processing time frame for all licensing actions. The agency believes that implementing the flexibility afforded by this temporary rule package and making internal process adjustments will significantly reduce the time it takes staff to evaluate each license application. The goal is to make the entire licensing process more efficient, timely, and predictable.

There are three main features that characterize the agency’s new streamlined approach to licensing:

  1. Collecting fewer documents as part of the license application.
  2. Relying on the applicant’s attestation that they have provided complete and accurate information.
  3. Giving the applicant the responsibility for knowing and understanding the laws and rules around marijuana licenses, and ensuring that their business will comply with those rules.

As part of the streamlining process, OLCC will ask applicants to complete updated paperwork which aligns with the temporary rule. We recognize that many applicants have already filled out and submitted paperwork for the license application, but the new set of paperwork is straightforward and will significantly reduce the time it takes OLCC staff to evaluate the license application.

Under the streamlined licensing process, a complete application will typically include:

  • An Application Packet for the appropriate license type. These forms have been streamlined to collect the minimum necessary amount of information. They also now include attestations that OLCC staff will rely on to be accurate when determining whether a license can be issued.
  • A Marijuana Applicant Questionnaire, along with an Individual History form for each individual who qualifies as an “applicant” for the license. The Applicant Questionnaire replaces all of the business structure forms that OLCC has historically collected. OLCC license investigators will no longer routinely collect detailed paperwork describing the structure and ownership of the business and analyze that information to determine which individuals and legal entities are “applicants.” Instead, it is the responsibility of the business to completely and accurately identify all “applicants.” The investigation process will not routinely consider other persons with a “financial interest,” although OLCC retains the authority to do so if necessary.
  • A map or sketch of the proposed premises and a floor plan for any indoor areas. New Premises Map Instructions are available that identify what information needs to be included on the map and floor plan. OLCC staff will rely on the applicant’s attestation that the map and floor plan(s) are complete and accurate.
  • A Land Use Compatibility Statement (LUCS). This requirement has not changed. An application must include this form, signed by the local government where the proposed premises is located, showing that the proposed license type is not a prohibited use at the proposed premises.

OLCC staff will continue to evaluate each applicant’s relevant criminal history and their record of compliance when previously licensed before issuing a license.

If an applicant has previously submitted fingerprints for a background check with another marijuana license application, OLCC staff will use the results of that license investigation rather than having the person submit new fingerprints. If an applicant has not previously submitted fingerprints, they will need to do so before the application is assigned to a license investigator.

OLCC will continue to contact applicants to confirm that they are prepared to complete the licensing process within 60 days before assigning them to a license investigator. As part of this contact, OLCC staff will provide instructions for applicants to submit fingerprints.  Do not submit fingerprints until you have received these instructions from OLCC staff.

The licensing timelines established in OAR 845-025-1135 still apply:

  • An applicant must complete the application process within 60 calendar days of being contacted by their license investigator.
    • If an applicant does not complete the process in 60 days and has not previously been in a “hold” status, the OLCC will un-assign the application and place it on hold until the Commission is able to reassign it; the reassignment will NOT take place until after other applications have been processed. Due to the volume of other license actions waiting to be processed, there could be a significant wait time before the OLCC reassigns the application.
    • If an applicant does not complete the process in 60 days and has previously been in a “hold” status, the application will be deemed incomplete and inactivated.

 

OLCC Suspends Marijuana Laboratory Licensee

Marijuana Products Tested At Unlicensed Location

OREGON: On September 21, 2020, the Oregon Liquor Control Commission (OLCC) issued an Order of Immediate License Suspension to the recreational marijuana lab licensee of Ecotest Labs in Phoenix, OR.  Ecotest Labs must not exercise any license privileges, or engage in any delivery or receipt of marijuana items, at the licensed premises, or any other premises until further order by the OLCC.

The immediate suspension was based on a series of violations which the OLCC used to determine that Ecotest’s continued operation represents a serious danger to the public health and safety. The licensee for Ecotest Labs is Proper Rental Management, LLC.

On July 23, 2020, the Oregon Environmental Laboratory Accreditation Program (ORELAP) informed the Commission it had suspended some of Ecotest’s testing accreditations for failing to meet required testing procedures and standards. ORELAP also suspected testing equipment had been relocated from the licensed premises in Phoenix, OR to an unlicensed location in Hillsboro, Oregon, where unregulated testing was taking place, and that testing results were being entered into METRC, the OLCC’s Cannabis Tracking System (CTS). In response, the OLCC launched an investigation.

The licensee told OLCC inspectors they had been experiencing problems with their accreditation, but had been recertified. The licensee also confirmed that since August 16, 2020, they had been transferring marijuana product to their unlicensed location in Hillsboro, while justifying incorrectly that ORELAP rules allowed for such transfers.

Upon further review of the licensee’s METRC accounts, OLCC discovered that Ecotest continued to conduct testing at this unlicensed, unaccredited Hillsboro location despite being informed by both OLCC and ORELAP that this activity was not permissible. At that point-in-time, the licensee had NOT submitted an application for a new location or for a change of location.

On September 2, 2020, OLCC expanded the investigation to include other state agencies: ORELAP, Oregon Health Authority and Oregon Department of Agriculture. Ecotest Lab – Immediate Suspension September 30, 2020.

On or about September 9, 2020, Ecotest’s licensed lab, located in Phoenix, was destroyed by the Almeda wildfire. Since then the licensee has not had a licensed premises where it could operate an OLCC approved lab, but had continued to test marijuana products through the unlicensed location in Hillsboro.

The licensee informed the Commission that it would be permanently moving its’ lab operations to the unlicensed Hillsboro location, and because the loss of the licensed location in Phoenix was caused by wildfire, it was not required to have OLCC approval, which is incorrect. OLCC staff then noticed that the licensee continued receiving marijuana samples and entering lab test information into its METRC account, which indicated that the licensee was continuing to operate at the unlicensed Hillsboro location.

The OLCC will be working to help recreational marijuana licensees impacted by wildfires, including expediting relocations according to required OLCC rules. However, some of the violations charged to Ecotest occurred before the licensee was impacted by wildfire, which impacts the business relocating and legally resuming testing of marijuana products.

Based on the initial investigation, the OLCC determined there was enough evidence to warrant the immediate suspension of Ecotest’s laboratory license. The OLCC investigation is continuing, and the licensee is entitled to exercise their administrative hearing rights to challenge the OLCC’s actions.

The OLCC has identified at least 160 affected licensees that received marijuana product tested for potency by Ecotest on or after August 21, 2020, and the agency will work with those licensees on a remedy to have the product re-tested. The OLCC has placed an administrative hold in CTS to prevent further distribution of product tested by Ecotest. Any potency tests conducted by Ecotest on or after August 21, 2020 will require retesting by an accredited, OLCC licensed laboratory for potency.