Oregon Cannabis 2023: Legislative Forecast and Report

The 2023 Oregon legislative session kicked off yesterday. It’s a regular session this year, meaning we’re in for a longer stretch– a 160 day calendar, versus the 35 day affair we see in even-numbered years.

Following November’s elections, the state government also looks quite different than the last few years, from the Governor’s office on down. For this reason, contacts I’ve spoken with in the Oregon Liquor Control Commission (OLCC) and elsewhere are reticent to forecast what may happen with cannabis laws.

For its part, the reinvigorated Oregon Cannabis Association (OCA) has voiced a request of “do no harm.” Specifically, it has also voiced opposition to any local tax increase (could be a real fight), thrown support behind social consumption (like every year; not happening) and addressing wasteful and onerous packaging requirements (a good idea).

Below, I’m going to summarize the draft bills currently teed up for this new session. Before I start, a similar caveat to last year: a majority of these introduced or enrolled bills will not pass. Certain early offerings will fall aside, or be consolidated into an omnibus or “Christmas tree” bill. We tend to see one of those bigger bills each session, alongside work around the edges on discrete issues.

SB 66 – Increased local marijuana sales taxation authority

This one reads similarly to 2021’s failed and controversial HB 2015 and SB 864. It increases the maximum percentage of tax that a city or county may impose on the sale of marijuana items, from 3% to 10%. The new regime would commence January 1, 2024.

Industry watchers may recall that SB 864 got close a few years back: it passed the Senate before the House Revenue Committee Chair let it drop. I wrote at the time:

One factor there may have been the extra $1B dollars contained in the state May revenue forecast, plus the $2.6BB received from the feds.

It will be interesting to watch what happens with cannabis tax increase proposals in the future, especially if state coffers run light again. A big cut of the cannabis tax revenue will be siphoned off by Measure 110 going forward. I am on record saying that cannabis taxes could go a bit higher, although for the sake of our clients I hope they do not.

Get ready for another pitched battle on local cannabis taxes here in 2023. SB 66 was filed pre-session and it’s going to get some play. Cf. HB 2505 below.

SB 326 – Illegal grow clean-up responsibility

This bill requires the owner of real property used for unlawful marijuana manufacture or production, to clean up waste upon notification from law enforcement. SB 326 is already off to the judiciary committee. It’s a fairly complex bill and a new idea as far as I can tell. I rate the chances of its passing on the low end.

SB 353 – OLCC homework

According to whatever bot summarizes these bills, SB 353 “requires OLCC to study cannabis.” After that, the bill provides that OLCC  has to submit a report including any legislative recommendations by September 15, 2024. In our experience, OLCC seems pretty busy but I suppose it never hurts for a government agency to learn more about the object of its regulation.

SB 354 – More OLCC homework

Similar deal here, but this one requires OLCC to study “illegal cannabis operations.” And then submit a similar report on the same schedule.

HB 2015 – OLCC homework

Same bill as SB 353; just the House filing. 

HB 2019 – Marijuana tax transfer

This one directs the Department of Revenue (DOR) to transfer “specified amount of moneys… to cities and counties in this state and to the State Police Accounts.” Apparently, someone thinks the police need more money given the added enforcement directives passed in recent sessions. More interestingly, HB 2019 attempts to re-allocate funds to counties around the state, based upon the “volume of marijuana produced, processed and sold at wholesale and retails” in each.

Political considerations aside, HB 2019 will almost certainly create a “fiscal impact”, which means it is destined for the Ways & Means committee. A lot of bills go there to die; but this one has a puncher’s chance in my estimation.

HB 2020 – OLCC, know thyself

This one requires OLCC to study “the commission.” And then submit a report on itself, including any legislative recommendations by September 15, 2024.

HB 2377 – OLCC homework

Same bill as SB 345 and HB 2015. This just needs to be cleaned up.

HB 2505 – Increased local marijuana sales taxation authority

This one is identical to SB 66 above, and pre-filed by the same two legislators. It’s just the House submission.

HB 2515 – Motion detection camera systems; age verification scanners; kids on site

This bill allows licensed cannabis producers, wholesalers, processors and retailers to use motion detection camera systems at a licensed premises. It also allows retail licensees to use age verification scanners, instead of performing physical inspections of customer IDs. (The information obtained would be used and retained “only for the purposes of verifying a person’s age.”) Finally, in what is likely a nod to rural producers, HB 2515 contains an unrelated provision allowing children of marijuana business owners onto a licensed premises if a “wall or similar barrier” is in place.

HB 2516 – Direct sales from small farms

This one would allow for certain licensed producers to sell directly to customers, bypassing retailer licensees altogether. The producers would have to qualify as “small-scale” licensees as later defined by OLCC. Interesting!

It also contains a provision which allows licensed wholesalers to sell or transfer cannabis to licensed retailers at trade shows.

HB 2517 – Hiring agreement exemption

A niche bill. It exempts cannabis business from “first source hiring agreement requirements in enterprise zones.” If you’d like to read more on this scintillating topic, go here.

HB 3048 – Law enforcement grants

This bill directs the Oregon Criminal Justice Commission to award grants through the Illegal Marijuana Market Enforcement Grant Program to the Department of State Police, cities, counties and community-based organizations; in order to chase unlawful cannabis production and distribution. More focus on bad actors here; less on helping industry directly.

HB 2931 – OLCC homework

Same bill as SB 345 and HB 2015 and HB 2377. This just needs to be cleaned up.

HB 2932 – OLCC homework

Same bill as SB 345 and HB 2015 and HB 2377 and HB 2931. Again, clean up needed.

HB 2949 – Local hemp regulations

This bill gives regulatory carte blanche, it seems, to cities and counties that wish to adopt “reasonable regulations” on most anything related to hemp production. For example, localities could limit “the manner in which a grower could produce industrial hemp.” A city or county could also limit where the hemp could be grown; when the site could operate; etc. All of this seems unnecessary, especially in the context of a beaten-down industry where Oregon has a real chance to be a leader.

HB 3049 – Hemp product labeling for human or animal consumption

This one directs OLCC to establish and annual registration program and labeling requirements for any industrial hemp commodity or product that contains cannabinoids, and is intended for human or animal consumption. Some of the requirements would include, e.g.: name and type of product; manufacturer identification; ingredients; net weight; serving size; potency. Seems like a good idea if implemented correctly.

What happens next

Stay tuned to the Canna Law Blog for updates on all of this. We plan to report any big developments during this session. We’ll also write our annual “wrap up” summary sometime after the session concludes on June 25.

Finally, in the meantime, to catch up on recent Oregon developments and the general state of affairs, check out the following recent posts:

• Reviewing the New Oregon Cannabis Rules
• Oregon Cannabis: State of the State

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Biden Mentions Freeing Prisoners with Cannabis Convictions in MLK Day Speech

On Jan. 16, President Joe Biden spoke at a Martin Luther King Jr. Day breakfast event in Washington D.C., which was hosted by the National Action Network. In his speech, he briefly included a mention of consumers in prison for cannabis convictions. “And one other thing about equal justice. I’m keeping my promise,” he said in his speech. “No one—I’ll say it again—no one should be in federal prison for the mere possession of marijuana. No one.”

“In addition to that, they should be released from prison and completely pardoned and their entire record expunged so that if they have to ask, ‘Have you ever been [convicted]?’ You can honestly say, ‘No.’”

During his speech, he also mentioned his efforts to help release Brittney Griner, the all-star WNBA athlete who was detained and sentenced in Russia for possessing a small amount of cannabis oil. “And we brought Brittney Griner home just in time for Christmas.  And we have more to bring home as well,” he said briefly.

Biden appears committed to his promise to prevent citizens from being convicted and sent to federal prison for cannabis crimes, especially since his initial announcement in October 2022. Previously, Biden signed an infrastructure bill in November 2021, which included improvements for cannabis studies. In December 2022, he signed a bill called the Medical Marijuana and Cannabidiol Research Expansion Act which “establishes a new registration process for conducting research on marijuana and for manufacturing marijuana products for research purposes and drug development.”

Earlier this month, the U.S. Sentencing Commission (USSC) voted to propose an amendment that would redefine simple cannabis possession in order to help guide judges preceding over cannabis possession cases. The USSC also released a report on Jan. 10 which analyzes data on cannabis possession sentences. During Fiscal Year 2021, 4,405 people received extra points on their criminal history record because of a cannabis possession conviction, and 1,765 entered a “higher criminal history category” because of that conviction. The report also found a decline in the number of people convicted for federal simple possession, from 2,172 in Fiscal Year 2014 to just 145 in Fiscal Year 2021.

The USSC initially estimated in an October 2022 report that 6,577 people could potentially receive pardons.

Biden’s pardon announcement in October has led other state governors to take similar action. Kentucky Gov. Andy Beshear announced that he would be exploring statewide weed pardons, and later signing an executive order in November to allow medical cannabis use. More than 1,450 Arizona residents with federal cannabis possession convictions were pardoned on Oct. 25, 2022. 

Oregon Gov. Kate Brown issued more than 45,000 pardons in November 2022. “We are a state, and a nation, of second chances. Today, I am taking steps to right the wrongs of a flawed, inequitable, and outdated criminal justice system in Oregon when it comes to personal marijuana possession,” Brown said in a statement. “For the estimated 45,000 individuals who are receiving a pardon for prior state convictions of marijuana possession, this action will help relieve the collateral consequences arising from these convictions.”

Most recently, Pennsylvania Gov. Tom Wolf granted 369 pardons on Jan. 12, which adds to a total of 2,540. “I have taken this process very seriously—reviewing and giving careful thought to each and every one of these 2,540 pardons and the lives they will impact,” Wolf said. “Every single one of the Pennsylvanians who made it through the process truly deserves their second chance, and it’s been my honor to grant it.”

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Can you smoke shrooms?

Everyone is talking about shrooms and all the ways they can be consumed. But can you smoke shrooms? That's up to you.

The post Can you smoke shrooms? appeared first on Leafly.

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Cali Sober cannabis product picks for 2023

Flowers, dabs, and edibles to stay Cali Sober in 2023.

The post Cali Sober cannabis product picks for 2023 appeared first on Leafly.

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Reviewing the New Oregon Cannabis Rules

In November 2022, the OLCC adopted and amended a suite of cannabis rules that became effective January 1, 2023. You can download the changes here and read our previous coverage of many of these changes here, here, here, and here. Now that Oregon’s new cannabis rules are effective, let’s take a look at some of the important changes to the rules governing the Oregon industry.

Change in business structure

Oregon cannabis M&A continues at a decent pace despite a relatively sluggish 2022 in terms of sales to consumers. Our M&A practitioners remain heavily involved in several major deals. The OLCC’s new rule changes impact how marijuana businesses may be bought and sold.

1. The rules governing filing notice and receiving approval for changes moved from OAR 845-025-1160 to 845-025-1165.
2. Until March 31, 2023, the notification requirements for the addition or person who would be an “applicant” remain the same. Licensees must submit a notification form to the Commission prior to making any business structure change.
3. Beginning April 1, 2023, licensees must receive approval before the addition or removal of a person meeting the qualification of an applicant. A licensee automatically receives conditional approval after five days if a determination is still pending. This amendment is a significant change to the way buyers and sellers of marijuana businesses have proceeded for the past few years. Our thoughts (good and bad) are here. (Note: that link concerns the draft rule before the OLCC added the conditional approval “after five days” language to the proposed rule; but several other issues we identified remain in the rule as adopted).

Violation classifications

Violations of the rules governing the Oregon marijuana industry are determined by the “category” of the violation ranging from Category I to V. For several years, many of the rules did not identify the specific category for a rule violation. The OLCC has now assigned a violation category to each rule to increase transparency.

The OLCC has also amended a rule (OAR 845-025-8590) identifying factors that may aggravate or mitigate the default sanction for a particular rule violation. These changes are important to be aware of in any situation where a licensee has, or may have, violated a rule that could lead the OLCC to issue a charging document.

Product recalls

The OLCC made several modifications to OAR 845-025-57690 to more specifically direct licensees on the reporting, execution, and managing of a cannabis product recall. As the OLCC explained in a recent bulletin:

A licensee may conduct a recall for cannabis products that may present a threat to public health and safety, that are in violation of administrative rules, or for quality assurance purposes. Licensees should report a recall to the OLCC within 24 hours of initiating a recall. During a recall, the licensee undertaking the recall is required to notify the licensees that have effected product(s) in their inventory about the concern; the recalling licensee should also provide to impacted licensees information on next steps for isolating the product from further distribution or retail sale, whether that is returning it to the manufacturer, destroying it, or something else.

The new rules clarifies several things including, but not limited to:

• What information should be included in recall notices to help impacted licensees collect data and details when reporting a recall;

• What information should be reported on the licensee’s distribution list to businesses in possession of the recalled product;

• No later than 48 hours after a recall notice has been issued, impacted retail licensees should notify consumers of the recall; and

• A licensee recalling products should be continuously checking with licensees in possession of the recalled product to ensure receipt of the recall notification and that the appropriate recall response is being followed.

En fin

Stay tuned for further discussions on Oregon’s new cannabis rules and their impact on the local industry. And in the meantime, here’s a link to a redlined document showing each of the changes to the rules and regulations governing marijuana in Oregon. Finally, for an overview of many of the changes that occurred, take a look at: Oregon Proposed Cannabis Rules: Mixed Bag

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Pennsylvania Gov. Wolf Pardons Over 2,500, Nearly 400 for Nonviolent Cannabis Offenses

Many Pennsylvania residents with nonviolent cannabis offenses will be given a second chance, and the most recent batch of pardons is a promising and much-needed signal of relief.

In a Jan. 12 announcement, Gov. Tom Wolf granted 369 additional pardons, bringing his total to 2,540. Nearly 400 of those pardons were provided under an expedited review process for nonviolent cannabis-related offenses.

“I have taken this process very seriously—reviewing and giving careful thought to each and every one of these 2,540 pardons and the lives they will impact. Every single one of the Pennsylvanians who made it through the process truly deserves their second chance, and it’s been my honor to grant it,” said Gov. Wolf. 

“A record prevents positive forward motion in a person’s life, and can spark a repetitive cycle of defeat. I firmly believe that with restored rights, pardoned Pennsylvanians prove themselves by stepping up and giving back to our communities.”

These 2,540 pardons are the most granted by a governor in the history of Pennsylvania. Before Gov. Wolf, Gov. Ed Rendell held the record with 1,122 pardons granted.

Among Gov. Wolf’s pardons, 395 of those were part of the expedited review process for nonviolent cannabis-related offenses and 232 were a part of the PA Marijuana Pardon Project.

In 2019, the Board of Pardons introduced and Lt. Gov. John Fetterman authorized the Expedited Review Program for Nonviolent Marijuana-Related Offenses, a program to speed up the pardon application process for people with nonviolent cannabis possession or paraphernalia convictions. 

PA Marijuana Pardon Project is a one-time, large-scale pardoning project for people with select minor, non-violent cannabis criminal convictions. The project is spearheaded by Gov. Wolf and former Lieutenant Gov. Fetterman, and was announced on Sept. 1, 2022, providing a faster way of the process.

“Nobody should be turned down for a job, housing, or volunteering at your child’s school because of some old nonviolent weed charge, especially given that most of us don’t even think this should be illegal,” Fetterman said at the time. Fetterman now serves as U.S. senator from Pennsylvania after assuming office on Jan. 3.

In legal terms, a pardon constitutes total forgiveness by the state for a ​criminal conviction, regardless of whether ​the sentence included time in prison, and allows for expungement of the related criminal record. Applying for a pardon is free for individuals seeking clemency, and the change was made during the Wolf Administration. Under the administration, the pardons process was modernized so that the application process is more streamlined, and the application fees are now waived. The application can be downloaded online and the process does not require a lawyer.

A report released in 2020 by the Economy League of Greater Philadelphia—analyzing 10 years of pardons data—found that pardons contributed $16.5 million to Pennsylvania’s economy over the past decade at “no cost to anyone.”

The governor has shown consistent support for cannabis over the past several years, after coming around to it more recently. On Twitter in 2021, Gov. Tom Wolf reiterated his call to end pot prohibition in Pennsylvania. It’s a change in tune for Wolf, who in 2017 said that Pennsylvania wasn’t ready to legalize recreational pot use. Two of Pennsylvania’s neighbors, New Jersey and New York, helped push the state into adopting its own cannabis market.

Gov. Wolf has served for two terms in his leadership role. The governor’s Priorities for Pennsylvania is helping to fuel Pennsylvania’s economic comeback, and the latest round of pardons is helping to further improve his image.

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MLK Day: Cannabis and Civil Rights

Happy MLK Day!

Time to catastrophize just a bit. Last year at this time, I kicked off this post by writing:

If Martin Luther King Jr. were alive today, he would almost certainly advocate to end the War on Drugs. Dr. King never spoke publicly about drugs or cannabis in particular: he was assassinated in 1968, two years before President Nixon signed the Controlled Substances Act (CSA). But it is well established that the War on Drugs was and is a war on minorities and people of color. It is the antithesis of equality and justice. And it is still going strong.

Things aren’t looking much better in 2023. Recently released FBI marijuana and drug crime data, which are confusing, indicate that cannabis is still the drug war’s primary driver. This is true even if simple possession arrests may be decreasing. Conservatively, local law enforcement officials clocked over 170,000 arrests for possession of cannabis in 2021 (the most recent year of published statistics). Texas is the nation’s leading culprit, followed by Tennessee and North Carolina.

These arrests are not for cartel activity, or any form of distribution or marijuana “trafficking”. Many, many people are trafficking the plant nonetheless. My law firm has worked with thousands of them over the years. We’ve helped them acquire state and local licenses, raise money, buy and lease real estate, pay each other, sue each other, etc. They’ve got cart blanche; and very few of them are minorities or people of color.

The catastrophizing part comes in when you start to understand that the tide won’t go out anytime soon. Many of the bigger states have made their moves as to cannabis, and Congress and the Biden administration, including through the President’s recent pardons, have badly missed the mark. As I wrote last year:

I am terribly, terribly disappointed in our leadership on this. Most of our leaders are cowards, starting at the very top. On the campaign trail, Joe Biden pledged to “decriminalize the use of cannabis and automatically expunge all prior cannabis use convictions.” That promise sits moldering right here on the “Black America” page of his website.

Friends, I just checked and it’s still up. You can read it– after clicking through a donations request.

In any case, the chances of Biden living up to his promises, or of cannabis reform happening in the new Congress, seem like slim to none. This means we should brace for a half million or so more arrests over the next few years. Many of these arrests will be of people of color, walking around with joints and such in places like Texas and Tennessee and North Carolina.

The cognitive dissonance will continue to expand. States like New York and New Jersey, once marquee prosecutors of the drug war, have rolled out cannabis decriminalization and social equity programs that should put the Western states to shame. I doubt anyone will crack the social equity code on cannabis commerce anytime soon, but these overtures stand in stark relief to what we will continue to see in the backwaters. All the while, legal sales of cannabis will continue to march toward $80 billion in 2030.

I don’t mean to be all doom and gloom. I do mean to remember, though, that drug policy reform is a civil rights and social justice issue. Dr. King would have been all over this one.

The year is 2023 and it’s time to end the drug war, starting with cannabis.

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