Oregon: OLCC Rules Update Oct. 2022

SOURCE:

CIA/ORCA Update Email


October 26th, 2022

 

OLCC Rules Update

Oct. 2022

On October 3rd the OLCC sent out the notice of its proposed rules on “Marijuana & Hemp 2022 Legislation Implementation & Technical Updates“.

Yesterday – Tuesday Oct 25th – was the public hearing for people to provide verbal comments, details for how to participate are below.

Monday Oct. 31st 12:00pm is the deadline for written public comments, which you can submit by emailing nicole.blosse@oregon.gov.

Here is the link to the proposed rules package: 

Marijuana & Hemp 2022 Legislation Implementation & Technical Updates

The CIA/ORCA team is reviewing all the rules and crafting our response that we will submit on behalf of our members. We encourage every licensee to review the rules and submit comments to the OLCC if you feel strongly about a proposed rule change(s).

There are some very good changes in this package and there are changes that some will find concerning and/or disruptive to established business models and relationships.

The OLCC’s summary with additional CIA/ORCA notes is in the next section to help direct you to the biggest changes.

Please reach out to us with questions, concerns, or ideas about the proposed rule changes at – Staff@oregoncannabisretailers.com. Licensee feedback is always appreciated and helps ensure that our response is comprehensive and effective.

Helpful Tips:

This is a very long rules package at 173 pages however many of the changes aren’t going to be relevant to most licensees so you don’t have read everything. Here are some tips to help if you have not reviewed rules before.

1) A large portion of the changes deal specifically with HB 3000 and Hemp so you can skip those changes if they are not relevant to you.

2) Skim for changes – Everything that the OLCC added is underlined and everything they deleted is strikethrough so you can skim/skip the text that is normal and focus on the proposed changes.

3) Focus on rules that are relevant to your license type and skip everything else if you don’t have time.

4) Use the summary and notes below and don’t hesitate to ask us for help.

OLCC’s Summary of Proposed Rule Changes

with CIA/ORCA Notes in RED:

Rule changes due to legislation:

1. House Bill 4016 section 6 and House Bill 4074 section 3 amend ORS 475C.105 to provide that the Commission may allow a marijuana retailer to relocate to another premises if the Commission becomes aware that a school was located within 1,000 feet at time of licensure. This amendment requires a change to OAR 845-025-1160, implemented through adoption of OAR 845-025-1180.

Section 845-025-1180(9) on page 27 covers the changes relating to schools. In the past the OLCC had to deny a renewal application if a license was within 1000 feet of a school. This change allows the licensee to find a new location. 

2. House Bill 4074 section 4 amends ORS 475C.269 to require individuals who perform certain kinds of work on behalf of a laboratory licensee to hold a worker permit issued by the Oregon Liquor and Cannabis Commission (OLCC). This amendment requires a change to OAR 845-025-5500.

Section 845-025-5500 rule changes are found on page 103.

OLCC initiated rule changes to address technical issues: 

1. Amending definitions of terms, correcting errors, making minor clarifications, removing language that no longer applies, updating references to rules and statutes, and correcting language to conform to administrative rule conventions.

These rule changes are found throughout the document.

2. Specifying violation categories for violations that were not previously categorized, establishing categorizations and penalty caps for packaging and labeling violations, and specifying a process for licensees to request a letter of good standing from OLCC.

The violation category level changes are found throughout the document. The easiest way to skim through them is to search for the term “Category”. Most of these category changes reflect the OLCC either lowering the severity of a violation or clarifying what levels uncategorized violations where.

*Important* Section 845-025-7170 on page 134 addresses the new penalty caps for packaging and labeling. The new max penalty is $500,000 for the most serious violations. This is an important section for licensees to review.

*Important* Section 845-025-8706 on page 162 addresses how business can get letters of good standing from the OLCC for submission to other states where a licensee is applying.

*Important* Section 845-025-8590 on pages 158-160 address how the OLCC will be using mitigating and aggravating factors in violations.  The total level of mitigation allowed has been increased to %30.

3. Updating license denial criteria. Includes allowing denial for certain types of illicit cannabis activity, allowing denial for co-location with an Oregon psilocybin product manufacturer or service center license, and allowing greater flexibility around denial for co-location with other marijuana licenses under certain circumstances.

Section 845-025-1115 on pages 17-19 are where most of these changes are found.

4. Updating laboratory and testing rules to require laboratories to retain samples, specify that relevant agencies may request material from laboratory samples, clarify that laboratory licensees share the same responsibilities as other licensees in certain circumstances, and prescribe a corrective mechanism when audit testing shows significantly different potency than the original compliance test.

*Important* Section 845-025-5760 on page 107 addresses the changes relating to when the OLCC may require the relabeling of cannabis and cannabis products because of audit testing showing different potency than the compliance test. 

Everyone should review Section 845-025-5760.  Its purpose is to address issues with inflated/unreliable testing results, however these changes also create new financial risks for businesses relating to the cost of being forced to relabel a batch of cannabis or cannabis products.

Sections 845-025-5000 to 845-025-5060 on pages 98 to 101 cover many of the other changes relating to labs.

5. Adopting a rule that modifies how processing is recorded in the Cannabis Tracking System (CTS).

*Important* Section 845-025-7575 on page 141 covers these changes. This is an important section for processors to review as it changes their Metrc reporting regulations.  If adopted it is important to note that this change does not go into effect until April 15th and the OLCC will be working with processors before then to help them understand the change in procedure.

6. Amending product recall rules to describe the process for a licensee conducting a recall.

*Important* Section 845-025-5790 on pages 108 and 109 cover these changes. These are new rules, however this was described as the OLCC’s basic policy on recalls. Thus these changes are about adding clarity for licensee’s regarding their responsibilities in the case of a product recall. That being said the requirements in the proposed changes are comprehensive and should be reviewed. 

7. Clarifying the duration for which license is issued for an approved initial or renewal application and clarifying that renewal applications must always be submitted annually to keep a license active.

Section 845-025-1190 on pages 29-30 cover most of these changes.

8. Clarifying the requirements for testing of hemp and hemp items by OLCC licensees and OLCC industrial hemp certificate holders.

Sections 845-025-2750 to 845-025-2785 on pages 60-67 covers these changes.

9. Amending and clarifying the process for change of ownership, change of location, and change of business structure requests.

*Important* Sections 845-025-1160 to 845-025-1180 on pages 22-28 cover these changes. If you are working on buying, selling, or changing the business structure you should review sections 845-025-1165(3), 845-025-1170(3),  845-025-1170(6).

10. Removing the fee for a producer licensee to obtain a medically designated canopy registration and clarifying the immature plant transfer privileges for producers with a medically designated canopy registration.

Section 845-025-2500 and 845-025-2550 on pages 57-60 covers these rule changes along with other changes for the medical cannabis program. 

11. Updating privileges, prohibitions, and requirements for retailer licensees related to discounts, consumer sales area, walk-up and drive-up windows, and on-site delivery.

*Important* These are important changes for Retailers to Review!

*Important* Section 845-025-2800 on pages 69-71 covers the rule changes relating to retailer discounts. The specific language is on page 70 in 845-025-2800(4)(i). This change should allow more pricing flexibility for retailers and enable loyalty programs.

Section 845-025-2840 on page 73 covers the changes relating to the consumer sales area.

*Important* Section 845-025-1300(1)(g) on page 38 and Section 845-025-8520(11)(a) on pages 153 addresses walk-up and drive-up windows. Specifically, these changes allow walk-up window sales however they ban drive-up window sales. Walk-up and drive-up window sales had been allowed through temporary rules for the last two years. If you want drive-up windows to be allowed make sure you submit comments to the OLCC.

*Important* Section 845-025-2885(4)(e) on page 75 explicitly bans delivering cannabis to a car (drive-up) if there is someone under 21 in the car.

12. Adopting a rule to allow marijuana transfers between state and tribal licensees.

Section 845-025-7725 on page 147 covers these changes.

13. Amending the labeling rules in divisions 25 and 26 to clarify requirements for labeling of hemp products and labeling of very small containers.

Section 845-025-7030 on pages 126-128 covers the labeling changes for very small containers with the specific language on 127 at 845-025-7030(11).

Sections 845-025-7000 to 845-025-7190 on pages 119-136 and 845-026-7000 to 845-026-7070 on pages 168-173 cover most of the hemp labeling changes.

14. Clarifying and detailing the recall process for violative products.

(See “6.” Above)*Important* Section 845-025-5790 on pages 108 and 109 cover these changes. These are new rules however this was described as the OLCC’s basic policy on recalls. Thus these changes are about adding clarity for licensee’s regarding their  responsibilities in the case of a product recall. That being said the requirements in the proposed changes are comprehensive and should be reviewed.

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