Update of the Oregon 2021 Legislative Session

Cannabis was a hot topic during Oregon’s 2021 legislative session. Although only 8 of the over 30 bills introduced were signed into law, some of these will have a significant impact on the industry, including a sweeping change in how Oregon regulates hemp. Below is a summary of the more notable bills that passed:

Senate Bill 96 (SB 96) and House Bill 3000 (HB 3000)

These two bills signal a significant shift in the oversight and regulation of the Oregon hemp industry with amendments to Revised Statute (ORS) 475B. Section 1 of ORS 475B gives the Oregon Liquor Control Commission (OLCC) the authority to regulate and establish legal standards within the cannabis industry. SB 96 expands this authority to include establishing testing standards for industrial hemp-derived vapor items. While the OLCC has not yet set standards for hemp-derived vapor items, SB 96 grants the agency broad authority to develop new rules to regulate this segment of the industry. This bill is still awaiting the governor’s signature, though it is anticipated that it will be signed and will take effect September 27, 2021.

HB 3000 further amends ORS 475B by narrowly defining the term “adult use cannaboid” to encompass any cannabinoid with an intoxicating effect. Previous definitions specifically excluded industrial hemp and focused instead on products derived from what is traditionally referred to as marijuana (cannabis that contains greater than 0.3% tetrahydrocannabinol concentration, or “THC”). HB 3000 focuses regulation on chemical compounds and subjective “intoxicating effects” language rather than the THC levels. Specifically, the amendments define “adult use cannaboid” as including, but not limited to, tetrahydrocannabinolic acids that are artificially or naturally derived, delta-8-tetrahydrocannabinol (Delta-8 THC), delta-9-tetrahydrocannabinol (Delta-9 THC), the optical isomers of delta-8-tetrahydrocannabinol or delta-9-tetrahydrocannabinol and “any artificially derived cannabinoid that is reasonably determined to have an intoxicating effect.”

Delta-8 is primarily only extracted from hemp-derived cannabidiol (CBD). Delta-9, on the other hand, is what produces the “high” most often associated with THC/cannabis products. Despite the fact that Delta-8 has a less psychoactive effectthan Delta-9, and the fact that Delta-8 has known therapeutic benefits, by including Delta-8 and items that the OLCC determines to have an undefined “intoxicating effect” in HB 3000’s definition of “adult use cannabinoid,” the legislature has opened the door to broad-ranging changes in how the hemp industry is regulated in the future with little to no scientific basis.

The OLCC wasted no time, and on July 19, 2021, the same day that HB 3000 took effect and was signed by Governor Kate Brown, the agency approved temporary rules to immediately begin testing hemp fields. The announcement came with little guidance as to what this will mean for farmers and others in the industry across the state. A future blog post focusing on the OLCC’s announcement and additional details about the temporary rules will follow shortly. With these laws still evolving, it is best to speak with an experienced cannabis attorney who is tracking the rules as they develop and change to ensure that your product complies with all regulations.

Senate Bill 408 (SB 408)

Unlike the tighter rules on hemp products established in SB 96 and HB 3000, SB 408 is a huge win for the cannabis industry. This bill took effect June 23, 2021 and creates new rules and processes to minimize barriers for licensees.

Notable items in SB 408 include:

1) Amendments to how the OLCC addresses revocation, processing, approval, and denials of licenses by:

• Limiting the ability of the OLCC to revoke a license only when the violation poses a significant risk to public health and safety. This section also takes into consideration mitigating factors, such as if the licensee has demonstrated that the conduct leading to the violation was not persistent or serious.
• Shifting the tone from punitive (punishment-based) to a more compliance-based approach working with business owners to provide training and education.
• Prohibiting delays in the processing, approval, or denial of a license application unless specific factors are involved.

2) Amendments that create more opportunities for licensees by:

• Allowing producers under common ownership to transfer product between their licenses allowing them to make better use of shared resources.
• Allowing producers to receive extract products made from their plant material back from a processor as long as the product does not include cannabis from another producer.
• Supporting plant diversity by allowing qualified producers to receive marijuana seeds from any source within Oregon.
• Simplifying rules around tracking documents for deliveries, requiring only proof of the originating license (i.e. who is legally responsible for the product), proof that the driver is properly licensed, and an accurate manifest of all the product in the vehicle.
• Doubling possession limits on all cannabis products except for seeds and immature plants and increasing the concentration limits in edibles to 100 mg. The increase brings Oregon in-line with other states and will allow the OLCC to write rules to increase the purchase limits.

3) Improves the industry’s commitment to sustainable practices by:

• Requiring the OLCC to study and identify rule and statute changes that would further reduce the use of plastics by the cannabis industry and submit its findings to the Legislature.

House Bill 2111

House Bill 2111 formally amends the name “Oregon Liquor Control Commission” to “Oregon Liquor and Cannabis Commission.” The change will officially go into effect on August 2, 2021.

House Bill 2519

While this bill, effective September 27, 2021, requires additional security upgrades for delivery of product, it also increases the amounts allowed in a vehicle during delivery and gives broad discretion for cities and counties to adopt ordinances that allow for delivery. The additional security upgrade requirements include requiring vehicles to be equipped with an active global position system (GPS) device, requiring that they be equipped with a lockable container in a secured cargo area, and be free of any markings that indicate the vehicle is used for the delivery of marijuana. Delivery vehicles may carry up to $10,000 worth of marijuana items at any one time.

The statutes and rules that govern the cannabis and hemp industry in Oregon are complex and constantly changing. These summaries are only a small sampling of the evolution taking place within this highly regulated industry. For this reason, it is always best to speak to an experienced cannabis law attorney to address all your cannabis legal needs.