Oregon Cannabis Delivery: How to Enter the Market

29 Apr Oregon Cannabis Delivery: How to Enter the Market

In the past year or so, we’ve seen an influx of cannabis delivery businesses enter the Oregon market– specifically in Portland. Those businesses are getting a lot of press, and we have received multiple inquiries from outfits looking to enter this space. Given this growing interest, we thought we would go over some of the basic steps a cannabis delivery company should take before jumping on the bandwagon.

In Oregon, marijuana items may only be delivered to a consumer’s home by an Oregon Liquor Control Commission (“OLCC”)-licensed retailer (“Retailer”) or a Retailer’s representative. A representative is “an owner, director, officer, manager, employee, agent, or other representative of a licensee, to the extent that the person acts in a representative capacity.”

Any person delivering marijuana items on behalf of a Retailer must:

1. be registered in the Cannabis Tracking System (“CTS”) as an “employee” of that Retailer with a valid marijuana worker permit number; and
2. be declared on the required transport manifest as recorded in CTS.

Although drivers must be listed as “employees” in CTS, they do not have to be actual employees of the Retailer. The OLCC requires that any driver who delivers marijuana items to consumers on behalf of the Retailer be listed as an “employee” for lack of a better term in CTS. (You won’t find any of this spelled out in the rules; it’s OLCC policy mostly.) However, it is worth nothing that the Retailer, as the licensee, will be liable for any violative acts or omissions by the driver.

Consequently, the OLCC allows private cannabis delivery companies to deliver marijuana items to Oregon consumers by partnering with Retailers, even if the delivery service does not have a brick-and-mortar presence. Although Oregon law does not expressly provide for this particular type of partnership between a private cannabis delivery company and a Retailer, the Retailer, as the licensee, must ensure compliance with all OLCC rules pertaining to the home delivery of marijuana items.

Nevertheless, cannabis delivery companies should familiarize themselves with OLCC rules as they are about to engage in retail delivery. The most pertinent OLCC rules include:

1. OLCC Approval. Prior to undertaking delivery service of marijuana items, Retailers must obtain approval from the OLCC by filing a Retailer Home Delivery Registration. Therefore, before a company enters into a business agreement with a Retailer, the company should do its due diligence and ensure, at a minimum, that the Retailer (a) possesses a valid OLCC license; and (b) has not been sanctioned for violations pursuant to the OLCC rules.
2. Location of Delivery. A driver may only deliver marijuana items in the jurisdiction in which the Retailer premise(s) is/are licensed. In addition, a delivery may be made only to a residence (i.e., home or apartment, but excluding any residence located on publicly-owned land), which means deliveries are strictly prohibited to dormitories, hotels, motels, bed & breakfasts, or other commercial businesses.
3. Receiving Orders. An order must (a) be placed before 8:00 PM on the day the delivery is to be made; (b) by the person who will receive the order; and (c) contain specific information, such as the requester’s name and date of birth.
4. Delivery Documentation. A Retailer must create a manifest in CTS for each delivery or series of deliveries and must document and retain certain information pertaining to the order and the requester.
5. Delivery Requirements. Deliveries must be made between 8:00 AM and 9:00 PM in a motor vehicle equipped with an alarm system. Every marijuana item must be kept in a lock-box securely inside the delivery vehicle, shielded from public view. Numerous restrictions are imposed on drivers, including: (a) not delivering marijuana items to an individual who is not 21 years of age or older and who is visibly intoxicated at the time of delivery; (b) not making deliveries more than once per day to the same physical address or to the same individual; and (c) not carrying or transporting at any one time more than a total of $3,000 in retail value worth of marijuana items designated for retail delivery.

Cannabis delivery companies should also be aware of the fact that in addition to obtaining OLCC approval, Retailers must generally register with the cities in which their stores are located before they can start operating a recreational marijuana business and delivering items to consumers. However, not every jurisdiction allows it, so companies should consult with knowledgeable attorneys before jumping on the bandwagon of cannabis home delivery.