Cannabis Equity Licenses in Oregon Address Reparations for War on Drugs

On April 8, 2021, the Oregon House Committee on Judiciary opened the floor to discussions of HB 3112, the Oregon Cannabis Equity Act (the Act)The Act addresses harm from the War on Drugs in Oregon by creating opportunities in the state’s regulated cannabis marketplace and providing automatic expungements of cannabis-related offenses. In addition, the Act creates a new Oregon Liquor Control Commission (OLCC) cannabis equity license and an advisory board to provide oversight during the implementation of the Act.

The Act includes affirmative-action measures with respect to Oregon’s cannabis regulation and funding allocations designed to address historical racial disparities in criminal law enforcement and other forms of discrimination that have limited economic and wealth creation opportunities for communities of color. (The HB 3112 Legislative Report explores the legal criteria and provides factual support for this race-based affirmative-action program. It is available here.)

Like the name suggests, the Act is a comprehensive piece of legislation that seeks to improve social equality both within and by virtue of Oregon’s thriving cannabis industry. For example, the Act creates a Cannabis Equity Fund to allocate money to (1) “community programs and partners that support landownership, homeownership, and income building through jobs and entrepreneurship for individuals who are American Indian, Alaska Native, Black, Hispanic or Latinx” and (2) “programs that support cannabis businesses owned by individuals” belonging to those minority groups.

The Act also addresses inequities created by law enforcement of cannabis-related crimes by funding the automatic expungement of criminal records affecting more than 20,000 Oregonians. On the regulatory front, it would require OLCC directors and staff involved in the regulation of marijuana to receive “equity training” at least once every six months.

Additionally, a Cannabis Equity Board (the Board) would supervise the implementation of a new cannabis equity license program. More broadly, the Board would “provide equity oversight of the cannabis industry” throughout Oregon, including cannabis-related funding and tax revenue allocations. The Board would consist of nine members (each member appointed to 4-year terms by Oregon’s governor and confirmed by the senate) from seven stakeholder groups:

  1. Equity operators
  2. Medical marijuana cardholder representatives
  3. Licensed health care provider representatives
  4. Public health representatives
  5. Cannabis producers, processors, and retailers
  6. Local equity experts and leaders
  7. Representatives from community-based organizations that support individuals are American Indian, Alaska Native, Black, Hispanic, or Latinx.

The Act requires at least five Board members to be disinterested, meaning that at least five Board members must have no financial or property interest in premises where cannabis is sold, ownership of stock in a cannabis corporation, or profits from any individual who applies for a cannabis equity license.

The Board would be responsible for monitoring the implementation and effects of the OLCC’s equity license program. An “equity liaison” at the OLCC would be required to provide quarterly reports to the Board with demographic and other information relating to the Cannabis Equity Licenses.

Cannabis Equity Licenses

The cannabis equity licenses would take effect on August 22, 2022. This new license would be available to applicants that are at least 51% owned by an individual who:

  • has been convicted of a cannabis-related crime (in any state) and has an income that does not exceed the area median income for the individual’s county of residence (as determined by the Oregon Housing Stability Council;

or

  • is American Indian, Alaska Native, Black, Hispanic or Latinx, or is a member minority group that “through empirical evidence that is subject to review by the Cannabis Equity Board, shows historically disproportionate community arrest rates for marijuana-related crimes” at the same level as the aforementioned minority groups.

For two years after its issuance, the equity license holder would be prohibited from transferring more than 49% of its interest in the equity license, except to another individual who also qualifies for an equity license.

The Act also requires the OLCC to: (1) issue a “provisional license” to any qualifying equity license applicant prior to obtaining a land use compatibility statement (LUCS) under ORS 475B.063; (2) provide technical assistance and similar support (directly or through third-party partners) to equity license holders; (3) cap equity license fees at 60% of the fees associated with other OLCC marijuana licenses; and (4) collect and make public anonymized demographic information of licensees.

Other New Cannabis Licenses

Applicants who qualify for an equity license would also be eligible to apply for the following new types of license:

  1. Cannabis On-Premises Consumption License (check back later for more on proposed rules regarding on-premises consumption license license).
  2. Cannabis Delivery License Eligibility (the proposed law allows marijuana delivery to a residence or hotel statewide (except possibly opt-out jurisdictions), but not college dorms)).
  3. Shared Processing License (allows a licensee to process marijuana edibles, concentrates and extracts, at a shared processing facility)
  4. Share Processing Facility License (allows a licensee host those who hold a shared processing license)

Like the equity license, the laws governing these four additional license types would take effect on August 22, 2022. Applicants who do not qualify for an equity license, however, would not be allowed to apply for any of the other new cannabis licenses mentioned above until 2032.

Green Light Law Group is carefully monitoring the legislative journey of this bill, and will provide an update if and when the Cannabis Equity Act is signed into law.

You can contact Ramsey Chamie at info@gl-lg.com or 503-488-5424.

Source:  https://greenlightlawgroup.com/blog/cannabis-equity-licenses-in-oregon-and-more-inside-the-new-cannabis-equity-act

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