OLCC Marijuana Advisory Committee Meeting Is Thursday July 9, 2020

OREGON: The next OLCC Marijuana Advisory Committee Meeting will take place Thursday, July 9, 2020

Due to the outbreak of COVID-19, we are holding our meetings virtually. An audio recording of the meeting will be posted on our website.

You can listen live using your phone: 1 (872) 240-3311 Access Code: 786-241-877

 

Oregon: OLCC Issues Marijuana Product Recall

Winberry Farms Sweet Leaf Blend Pre-rolls Failed Pesticide Test 

Portland, OR — The Oregon Liquor Control Commission is issuing an immediate health and safety advisory due to the identification of potentially unsafe pesticide residue on plant material used in a packaged retail marijuana product.  The product in question was cultivated by licensed marijuana producer Ard Ri and packaged for sale to retailers by licensed wholesaler DYME Distribution.

The affected marijuana flower failed its pesticide test, because it exceeded the acceptable level, known as the “action limit”, for the insecticide Imidacloprid*.  The flower was incorporated into pre-rolled joints marketed under the Winberry Farms Sweet Leaf Blend; the strain name is Trap Star.

The impacted product (see above images) has a Unique Identification (UID) number of 1A4010300022859000015892.

The OLCC has locked down the product in the Cannabis Tracking System (CTS) to prevent further distribution or sale to consumers.  The product was sold through nine OLCC licensed marijuana retailers around Oregon.  DYME distributed approximately 700 units of the contaminated pre-rolls; retailers have pulled the remaining 328 packages from their shelves.

Screenshot 2020-01-17 07.43.34The impacted Winberry Farms Sweet Leaf Products were sold from December 17, 2019 through January 8, 2020 at the following licensed retailers:

  • Spark, 5103 NE Fremont Street, Portland
  • Ancient Remedies, 2350 State Street, Salem
  • Puff Oregon, 47700 NW Sunset Highway, Manning
  • Rogue River Herbal PMC, 510 East Main, Suite C, Rogue River
  • The Joint, 3270 Market Street NE, Salem
  • Stoney Only Clackamas, 10289 SE Highway 212, Clackamas
  • Tsunami Marijuana LLC, 36412 Highway 26, Seaside
  • Track Town Collective, 3675 Franklin Blvd., Eugene
  • Green Room, 2521 NW 9th Street, Corvallis

Initial test results for the source marijuana flower produced by Ard Ri was entered into CTS by PREE Laboratories in Corvallis on December 4, 2019; the test results indicated that both test samples failed.  PREE re-analyzed one of the samples, as allowed under marijuana testing rules, on December 11, 2019 and the sample passed.  However marijuana testing rules then require a second lab to re-sample and re-test the original product That verification test never took place.

Because of PREE Laboratories’ incorrect entry of test results into CTS the tracking system designated the marijuana flower as having passed its pesticide test.  Subsequently DYME Distribution packaged and distributed the contaminated marijuana as pre-rolled joints.

The OLCC detected the discrepancy January 6, 2020 when conducting a monthly audit on products that have failed pesticide tests at the point of origin – in this case the marijuana flower.  When the OLCC initiates an administrative hold of a product it automatically puts a hold on any product produced from the original flower.

OLCC is investigating both the contamination test failure, and the licensees’ use of CTS.

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.

The Oregon Department of Agriculture maintains a guide list for Pesticides and Cannabis that be found here.

*The Oregon Health Authority is responsible for establishing pesticide and solvent action levels for marijuana testing.

 

 

OLCC Announces Spring 2017 Recreational Marijuana Workshops

OREGON: The Oregon Liquor Control Commission (OLCC), along with the Oregon Department of Agriculture, the Oregon Department of Revenue, and Franwell Metrc – the provider of Oregon’s Cannabis Tracking System (CTS), will hold Recreational Marijuana Program licensee workshops around the state in May, 2017.

The workshops will be held in Eugene at Lane Community College on May 3, in Ashland at Southern Oregon University on May 4, in Newport at the Best Western Agate Beach on May 11, and in Bend at the Riverhouse on the Deschutes on May 18th.  At this time the Oregon Department of Revenue will present only at the Newport and Eugene workshops. Registration is now open. The workshops will include program updates and information on:

  • Update on Rules & Licensee information
  • Pesticides
  • Packaging and Labeling
  • Cannabis Tracking System – Bring Your Own Device/Data (BYOD) – Metrc will answer your questions
  • Taxes: Collecting & Reporting

There will be two tracks offered, one for producers and processors, and another for wholesalers and retailers.  The content will be tailored to the license categories.

Producers/Processors  

9:30 a.m             Check-in

10 a.m.               Pesticides

10:45 a.m.          Break

11 a.m                Packaging & Labeling

12 p.m.               Lunch Break – Networking

1 p.m.                 Rules & Compliance

1:45 p.m.            Metrc

2:45 p.m.            Break

3:00 p.m.            Taxes

3:15 p.m.            General Q&A session

Wholesalers/Retailers

9:30 a.m             Check-in

10 a.m.               Rules & Compliance

10:45 a.m.          Break

11 a.m                Metrc

12 p.m.               Lunch Break – Networking

1 p.m.                 Pesticides

1:45 p.m.            Packaging & Labeling

2:45 p.m.            Break

3:00 p.m.            Taxes

3:15 p.m.            General Q&A session

The workshop is open to all licensees or their representatives; one licensee per track.  Non-licensees can register but will be waitlisted until licensees have had the opportunity to register.

Note:  Anyone who registers for the workshop, is a “no-show” and doesn’t cancel their reservation will be placed on a “no-show” list.  Anyone on the “no-show” list will be restricted from registering for future OLCC workshops until other licensees have registered. Interested parties can register here for the workshops.

WeedTraQR Seed-to-Sale Software Certified For Oregon

WASHINGTON: The Oregon Liquor Control Commission (OLCC) has approved WeedTraQR cannabis seed-‐to‐sale tracking software as a validate software provider for Oregon’s recreational marijuana program. The Seattle-based company has developed a platform that is compatible for integration with Oregon’s Cannabis Tracking System (CTS) to meet the inventory traceability needs of the state’s producer, processor, wholesaler, and research.

Operational for over two years in neighboring Washington, with a rapidly expanding roster of clients, WeedTraQR lends proven expertise and hard‐earned credibility to Oregon’s fledgling system. WeedTraQR’s software will allow recreational cannabis producers, processors, and wholesalers to electronically transmit complete and accurate inventory and sales data into the state’s mandatory CTS, saving time and reducing the risk of error.

All OLCC recreational marijuana licensees must participate in Oregon’s CTS; they can choose an approved third-party provider to integrate company sales and inventory data with the state’s system. One of only four providers validated for use by producers and processors, WeedTraQR pragmatically solves the inventory‐tracking requirement in this early industry stage, turning traceability from burden to competitive advantage by supplying clients with data analytics and other operational resources.

WeedTraQR claims to be the first ‘meta’ traceability software, reporting to the CTS in both Washington (BioTrackTHC) and Oregon (Metrc), making it an appealing option for companies with national aspirations and for those who currently license products in multiple states who want a consistent interface for all facilities.

Touted by Washington’s recreational industry as the easiest‐to‐use, most efficient and responsive inventory platform in the cannabis space, WeedTraQR will focus on producers and processors in Oregon and will also support wholesale and research licensees.

“We like that we’re taking  a platform agnostic, commodity equipment, agile SaaS model to the cannabis industry. It’s a major advantage to be able to run your grow or processing facility traceability from any mobile device, like a tablet or your smart phone, ”  said company co-founder Eric Ogden.  “We’re technology disruptors. We’re unique in that we’re aligned  with the industry first, while providing competent  and reliable governmental support and reporting.”

Oregon House Bill 4014 Signed Into Law by Governor Kate Brown

by Larry J. Brant 

As reported in my November 2015 blog post, in accordance with Internal Revenue Code (“Code”) Section 280E, taxpayers (for purposes of computing federal taxable income) are prohibited from deducting expenses related to the production, processing or sale of illegal drugs, including marijuana.

A Bit of Welcome Relief?

Measure 91, officially called the Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act, passed by Oregon voters, appears to have alleviated some of the impact of Code Section 280E as it relates to Oregon taxable income. Specifically:

  • Section 71 of Measure 91 provides that Code Section 280E does not apply for purposes of determining Oregon taxable income or loss under our corporate income tax regime. This provision sets forth no specific effective date. So, in accordance with Sections 81 and 82 of Measure 91, it became effective on July 1, 2015.
  • Section 74 of Measure 91 provides that Code Section 280E does not apply for purposes of determining Oregon taxable income or loss under our individual income tax regime. This provision of Measure 91 specifically provides that the change became effective for tax years beginning on or after January 1, 2015.

So, following the passage of Measure 91, were there any Oregon tax problems plaguing the cannibals industry? The short answer is: Maybe.

Measure 91 generally only applies to the recreational marijuana industry. Even though nothing in Measure 91 says Sections 71 and 74 are limited to recreational marijuana, maybe an argument could be made that these provisions did nothing to alleviate the Code Section 280E issue for medical marijuana business activities.

Don’t despair; Oregon lawmakers came to the rescue. The law is now clear (at least as clear as a law can be) that, with respect to the Oregon individual income tax regime, folks in both medical and recreational marijuana businesses may deduct (for Oregon purposes only) expenses that would be otherwise be nondeductible under Code Section 280E.

House Bill 4014 Is Signed Into Law

On March 3, 2016, Oregon Governor Kate Brown signed House Bill 4014 into law. The bill, which spans numerous pages, deals with several issues related to the Oregon cannabis industry, including the application of Code Section 280E to both the recreational and the medical marijuana industries.

The provisions of House Bill 4014 relating to Oregon income taxation are contained in: Sections 28, 28a and 29.

SECTION 28 of House Bill 4014 amends ORS 316.680 by adding subsection (i) providing that there shall be subtracted from federal taxable income:

“Any federal deduction that the taxpayer would have been allowed for the production, processing or sale of marijuana items authorized under ORS 475B.010 to 475B.395 but for section 280E of the Internal Revenue Code.”

SECTION 28a of House Bill 4014 amends ORS 316.680 by adding subsection (i) providing that there shall be subtracted from federal taxable income:

“Any federal deduction that the taxpayer would have been allowed for the production, processing or sale of marijuana items authorized under ORS 475B.010 to 475B.395 or 475B.395 or 475B.400 to 475B.525 but for section 280E of the Internal Revenue Code.”

SECTION 29 of House Bill 4014 provides that the amendments to ORS 316.680 by Section 28 apply to conduct occurring on or after July 1, 2015 but before January 1, 2016, and to tax years ending before January 1, 2016. The amendments to ORS 316.680 by section 28a apply to conduct occurring on or after January 1, 2016, and to tax years beginning on or after January 1, 2016.

Implications for the Oregon Cannabis Industry

What this means for the cannabis industry in Oregon is twofold:

  • For Oregon personal income tax purposes only (for tax years beginning on or after July 1, 2015 but before January 1, 2016), the prohibition contained in Code Section 280E does not apply to the non-medical production, processing or sale of marijuana. In other words, a subtraction from Oregon personal income tax is permitted by folks in a recreational marijuana business for any federal deduction a taxpayer would have been allowed for expenses related to the production, processing or sale of marijuana had there been no prohibition under Code Section 280E.
  • For Oregon personal income tax purposes only (for tax years beginning on or after January 1, 2016), the prohibition contained in Code Section 280E does not apply to the production, processing or sale of marijuana (medical and non-medical marijuana).  In other words, on or after January 1 of this year a subtraction from Oregon personal income tax is permitted by folks in bothmedical and recreational marijuana business for any federal deduction a taxpayer would have been allowed for expenses related to the production, processing or sale of marijuana had there been no prohibition under Code Section 280E.

Interestingly, House Bill 4014 does not appear to address the Oregon corporate excise or income tax regimes. Remember, Section 71 of Measure 91 clearly tells us that, after July 1, 2015, Code Section 280E does not apply to the computation of Oregon corporate taxable income.

Why did Oregon lawmakers feel the need to make it clear that Code Section 280E does not apply to the computation of Oregon individual taxable income in the case of both medical and recreational marijuana business activities (as of January 1, 2016), but did not do the same for the computation of Oregon corporate taxable income?

Oregon law clearly contemplates corporations and other entities will be used to operate marijuana related businesses. In fact, both Measure 91 and the Oregon regulations governing the local marijuana industry allow businesses to be organized as corporations (and other entities). The definition of “person” in Measure 91 includes corporations (Section 5(24)), and various parts of the regulations contemplate that marijuana licenses will be issued to corporations and other entities (e.g., OAR 845-025-1045(3).

Was this apparent omission intentional or simply as oversight by Oregon lawmakers? It certainly seems Measure 91 covers (for purposes of Code Section 280E) recreational and medical marijuana activities at both the Oregon corporate and individual income tax levels. Was House Bill 4014 necessary to clarify the elimination of the application of Code Section 280E for Oregon income tax purposes?

It will be interesting to see how the Oregon Department of Revenue interprets House Bill 4014 and Measure 91 in this regard. Time will tell.

An Observation

One interesting observation about Measure 91 is that the clear language eliminating the application of Code Section 280E for Oregon individual and corporate taxation is not expressly limited to marijuana activities. Arguably, it eliminated the application of Code Section 280E for Oregon income tax purposes in all instances (including the sale or distribution of illegal drugs). It appears House Bill 4014 removes that interpretation of the law in the instance of the Oregon individual tax regime as it expressly limits the application to marijuana, but its silence as to the Oregon corporate tax regime leaves that interpretation alive. I hope this was not the legislature’s intent.

Oregon’s First Week Of Recreational Pot Sales Tops $11 Million

OREGON: After just one week of recreational marijuana sales, Oregon dispensaries have raked in an estimated $11 million.

That figure could mean the state’s estimate is shockingly low for how much money it’ll make when pot taxes kick in this January.

At Nectar on Northeast Sandy Boulevard and 33rd Avenue, they’re restocking the shelves a lot this week.

“We’re seeing about 500 people a day,” said Nectar owner Jeff Johnson. Dispensary owners and customers are reporting Oregon’s first week has gone very well.

You Can Now Buy Marijuana Legally In Oregon

OREGON: It’s high time!

At 12 a.m. on Thursday, it became legal for medical dispensaries across Oregon to sell marijuana, seeds and immature plants to anyone over the age of 21. Excited customers lined up outside dispensaries in Portland, waiting for the clock to strike midnight.

One of them was Davia Fleming, 29, the first in line outside Shango dispensary and therefore one of the state’s first legal cannabis customers. For her, legalization means more than her ability to smoke without fear of prosecution. Cannabis keeps her stable, she said.

<span class='image-component__caption' itemprop="caption">Davia Fleming waits outside Shango dispensary in Portland, where she'll be one of Oregon's first legal marijuana customers.</span>
ANDY CAMPBELL / THE HUFFINGTON POST
Davia Fleming waits outside Shango dispensary in Portland, where she’ll be one of Oregon’s first legal marijuana customers.

“What a great night! It’s legal!” she said. “I have ADHD so it makes thinking processes a little chaotic, and I discovered that marijuana kind of helps organize me and my creative functions.”

Oregon Marijuana Laws: The Status Of Residency Requirements After HB 3400 (Part 4)

By Dave Kopilak

OREGON: In Part 3 of this series, I discussed the residency rules for Ballot Measure 91 businesses that the Oregon Liquor Control Commission (“OLCC”) distributed to members of the Rules Advisory Committee on August 14. The OLCC has not yet made any changes to those rules. However, there is some news to report.

On September 3, Amy Margolis and I met with Steve Marks (Executive Director) and Jesse Sweet from the OLCC to discuss the residency rules. The purpose of the meeting was not to debate the merits of the OLCC’s policy decisions regarding residency. Rather, we were there to: (1) find out what the OLCC’s policy was in the first place; and (2) discuss ways in which: (a) the language in the rules could be clarified; and (b) certain common business organization structures could be specifically addressed. Our firm’s only goal was to attempt to assist the OLCC in making the rules as clear as is reasonably possible, so that license applicants will have some relative certainty (before they file their applications!) that their business organization structures are permissible under the rules. We informed the OLCC that our firm does not support residency requirements and that, in fact, we were reserving the right to assist one or more of our clients in challenging the residency rules.

OLCC’s Current Policy

We were informed that the OLCC’s policy is as follows:

  1. Ownership – 51% of the ownership interests must be owned by two-year Oregon residents.
  2. Management – 100% of the individuals who are directly involved in the operation or management of the business must be two-year Oregon residents.

Albany, Oregon Considers Permanent Ban On Recreational Marijuana

OREGON: Albany City Council members may not be not averse to pursing a permanent ban on recreational marijuana.

The council on Wednesday voted to ban temporary sales of recreational pot at medical dispensaries, with two of six councilors, Ray Kopczynski and Dick Olsen, dissenting.

The vote could be a harbinger of greater plans to ban the drug permanently.

“My gut feeling is that there may be an attempt to try to do that,” Kopczynski said of the possible move.

Beyond Kopczynski’s assessment, documents from the council seem to suggest such a move is possible.

Oregon Dispensaries Prepare For Legal Marijuana

OREGON:  The Oregon Health Authority says there over 300 registered medical marijuana dispensaries in Oregon.

Emerald City Medicinal is one of 19 in Eugene that can legally start selling recreational marijuana to adults as of Thursday, October 1st.

Measure 91, passed by voters in 2014, allows the sale of recreational marijuana at medicinal dispensaries.

Customers are legally allowed to buy seven grams of marijuana, which is a quarter of the one ounce legal carrying limit.

Emerald City says the cost of seven grams depends on the type of cannabis.

It says there are thousands of varieties out there to choose from.