ALERT: Oregon Cannabis Licensees Prepare for Water Inspection

Upon information and belief, it appears that the Oregon Water Resources Department (“OWRD”) is conducting an inspection of all licensed marijuana and hemp growers in Oregon. These unannounced visits appear to be part of a larger operation to ensure OLCC and ODA licensed growers are not violating any of the new water right laws created this last legislative session via House Bill 4061. Licensees should take these inspections seriously and prepare all documents needed to show their legitimate water right interests, as violations can lead to severe administrative and civil penalties, and potential penal sanctions.

 

Growers who purchase water from suppliers at distribution locations for irrigation or nursery purposes should immediately prepare records regarding those purchases in the likely event of an audit by OWRD. House Bill 4061 requires that these purchasers:

A) Keep records of:

  1. The date and location of the purchase.
  2. The date on which the water is delivered.
  3. If hauling water for another person, the name and contact information of the person to whom the water will be delivered and the date of the delivery.
  4. The quantity of the water.
  5. The intended use of the water, including the type of plant for which the water is intended to be used.
  6. The location at which the water is used.

B) Retain the records for at least 12 months after the water is delivered to the location of use.

C) Upon request by law enforcement or the Water Resources Department, immediately provide the records.

Water suppliers should likewise prepare for an audit and compile all documents necessary to protect themselves from potential civil or criminal liability. HB 4061 provides the following requirements water suppliers must follow when selling water to the public at authorized distribution locations:

A) Maintain records of the water sales that include:

  1. The name and contact information of the person that purchased the water.
  2. The date of the sale.
  3. The quantity of the water
  4. The license plate number of the vehicle used to haul the water.

B) Retain the records for at least 12 months after the sales.

C) Upon request by law enforcement or the Water Resources Department, immediately provide the records.

The timing of this sweeping operation is likely due to OWRD receiving $5 million in grant funding from the Oregon Illegal Marijuana Market Enforcement Grant Program. OWRD’s operation is likely the first of many inspections that other administrative agencies will soon conduct now that they are in possession of additional funding. Hemp growers should be on the lookout for ODA presumptive testing inspections, and all industry licensees should prepare for more scrutiny from law enforcement.

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