22 August 2016
The Oregonian reports
Kleinkopf is one of nearly three dozen Oregon Liquor Control Commission staffers working to review hundreds of applications for marijuana licenses. The agency, created in 1933 to control alcohol distribution and sales after Prohibition was repealed, is adjusting to its new mission: regulating marijuana.
The liquor commission has been swamped with applications – more than 1,300 and counting – from people hoping to operate a legal cannabis business in the state. So far, the state has licensed about 200 marijuana businesses, almost all of them marijuana growers.
The state expects to take until the end of the year to process all existing applications.
Incomplete applications and extensive local approvals have delayed the state’s review process, said Steven Marks, the liquor commission’s executive director.
The state allows growers to request a waiver from some security requirements — and that process at first was time-consuming, with many outdoor growers in rural southern Oregon asking for exceptions, he said. Outdoor producers argue some of the requirements are unnecessary at rural or remote locations.
“It’s going smoothly, but it’s a slower pace than expected,” he said.
It’s not just producers flooding the state with license applications. The liquor commission is charged with licensing processors who turn the plant into edibles and oils, wholesalers, retailers, labs that will test for pesticides and potency and researchers. In Oregon, people can hold multiple licenses so growers can also process or sell marijuana.
Growers were the priority, as state officials hoped to avoid the problem that Washington encountered when it opened stores in 2014 without enough marijuana flowers. But that scenario isn’t likely to be repeated in Oregon, Marks said.
Licensed marijuana producers already are harvesting their plants and stockpiling dried flowers while they wait for labs to come on line and stores to open.
So far 5,000 pounds of marijuana have been harvested by licensed producers, according to the state’s marijuana tracking system, which monitors the program from seed to sale. The state cautioned that the total refers to freshly harvested plants and isn’t marijuana in a dry, usable form. Of that, 700 pounds is intended for the marijuana seed market.
Marks said he expects the state to roll out its recreational market with a handful of stores opening Oct. 1. Medical marijuana dispensaries planning to convert to the new recreational system have until the end of the year to make the switch. Marks expects many will wait so they can clear out their existing inventory first.
“It’s going to be a prelude not a crescendo of retailers,” he said.
Like Washington and Colorado, Oregon’s approval process is daunting and detailed, with one busy staffer estimating that it takes between 45 to 60 days to review everything the state requires.
The agency created a dozen inspector positions statewide to process marijuana applications; but hiccups in hiring have left only eight filled. Officials pulled from the agency’s alcohol enforcement staff, assigning another 26 staffers to help comb through marijuana applications.
That work includes running detailed criminal background checks into applicants and their business partners. The state also requires that applicants file site plans and security systems, along with where they’ll get water to irrigate and what products they’ll use on their plants.
Also time-consuming: digging into the financing of these newly legitimate businesses.
“We have to verify: Did it come from a bank? Did you take out a loan? Did you get a loan from grandma? And then we have to contact grandma and get the information on grandma,” said Denise Byram, a longtime investigator on the agency’s liquor enforcement side who now works on marijuana applications.
Some businesses have complicated ownership setups, which the state is supposed to untangle and investigate before issuing a license.
“We have some with five, six, seven, eight layers of corporations we are dealing with,” Byram said.