Oregon Cannabis 2024: Legislative Forecast and Report

06 Feb Oregon Cannabis 2024: Legislative Forecast and Report

The 2024 Oregon legislative session kicked off yesterday. It’s a short session this year, with adjournment sine die set for March 10. Whatever hasn’t passed by that day will be scuttled to 2025, or fade to black entirely.

This year, we have but one cannabis bill to cover– unless you count HB 4093, which would require at least one Oregon Liquor and Cannabis Commission (OLCC) commissioner to have a public health background. This stuffy proposal has been batted around in prior sessions but failed to become law.

Anyway, the cannabis bill for 2024 is HB 4121. It’s topically broad. HB 4121 was drafted by legislative cannabis guru Rob Bovett, who no longer works for the counties but continues to perform a valuable public service in drafting Oregon’s cannabis laws, as he has since forever. Rob tells me his marching orders for 2024 were to submit something noncontroversial, bipartisan and bi-cameral. HB 4093 is generally that (see Rob’s testimony here).

Why does the bill have to be noncontroversial, etc.? I explained in my annual “State of the State” post in December that:

The first big task for CIAO [Oregon’s newly consolidated cannabis trade group] should arise in the 2024 legislative session. The Oregon legislature seems less keen on dealing with cannabis issues over the past few sessions, than historically. Given collateral damage to OCA from the La Mota scandal and all of the oxygen being taken up by Measure 110 scrutiny, CIAO will have its work cut out come February.

Yes, Measure 110 dialogue around drug recriminalization is going to dominate this session, alongside housing issues. Cannabis is either an afterthought or a third rail, depending on who you ask. With that brief orientation, below is what HB 4121 would do.

Enforcement collaboration (Sections 1 to 6)

In 2021, Oregon passed a law known as HB 3000. I explained at the time that HB 3000 “did a million things.” HB 4121 would carry several of them forward, including: 1) authorizing collaborative mapping of grow sites to inform law enforcement where licensed grow sites are located; 2) setting rules to distinguish marijuana from hemp; 3) granting the Oregon Department of Agriculture (ODA) authority to order destruction of plants “presumptively considered to be marijuana” under the aforesaid rules; 4) allowing ODA and OLCC to collaboratively inspect hemp crops, alongside the National Guard if the Governor so orders. I’m told the Southern Oregon sheriffs would like to see these provisions pass, especially.

Hemp product registration and labeling (Sections 7 to 14)

This topic also arises out of HB 3000, by way of a task force. And it’s a rehash of last year’s HB 3049, which was waylaid and died in the ways and means committee (my coverage here).

These sections create a registration system and labeling standards for hemp products containing cannabinoids that are intended for human or animal consumption. To be clear, we are talking about products that adults in Oregon could buy in places like gas stations and grocery stores. Registration wouldn’t be required for fiber, grain products or topical products.

Some makers of hemp-derived cannabinoids are going to support these sections, while others will be strongly opposed. The FDA isn’t enforcing this type of labeling and certain companies may risk losing shelf space at Whole Foods and elsewhere if forced to elaborate on the composition of certain products.

Marijuana license caps and moratorium (sections 15 to 20)

This is a big deal! And interesting. Oregon has been limping along with temporary licensing “pauses” and moratoria for almost six years. The most recent of these came via HB 4016, which expanded a marijuana licensing moratorium to all licensing types except testing labs; and which remains in effect until March 31 of this year.

Industry is now proposing to instate a permanent, hard cap on the number of licenses, while grandfathering anyone already in the system. The caps would be tied to population metrics, as follows:

• For production and retail licenses, “not more than one active license per 7,500 residents in the state who are 21 years of age or older.”
• For processor and wholesaler licenses, “not more than one active license per 12,500 residents in the state who are 21 years or older.”

By my math, if this language holds Oregon would not issue new cannabis licenses in most or all of these categories, forever. For example: we have roughly 2,429,348 Oregonians 21 years of age. This means the cap on retail licenses going forward would be 324. We currently have 863 of them.

It’s worth noting that OLCC currently caps the number of liquor stores on a population schedule. For liquor sales, I am told it is 12,000 people per store. This is an imperfect analogue for marijuana, because unlike with liquor, OLCC doesn’t own the product and sell it through to retail. Also, on the liquor side, the “cap” is implemented under a seemingly discretionary administrative rule. But the liquor regime is probably where the notion came from.

Exactly how the cannabis industry came up with these ratios is a story for another day. Let’s see if Oregon finally caps licenses once and for all. If it happens, OLCC may finally have to get into rulemaking around license reassignment concepting. Alternatively, if this session implodes due to another Republican walk-out, or if HB 4016 is otherwise allowed to sunset, prepare to watch the secondary market for cannabis license sales crater. PRO TIP: anyone looking to “buy a license” right now might be wise to wait a minute.

Minor decoy operations (Sections 21 to 23)

These sections provide OLCC authority to conduct minor decoy operations in other locales than licensed dispensaries. Under these provisions, OLCC could place young ’uns in places like smoke shops and other purveyors of high-THC, hemp-derived items. The Commission would also be required to develop and promote uniform standards for the stings.

Temporary worker permits (Sections 24 to 31)

Here, the bill would allow applicants for marijuana worker permits to start work while their applications are being processed. OLCC allows this on the liquor side. Currently, OLCC is caught up on application processing for marijuana workers, but temporary permits could prove useful sometime down the line.

Conclusion

March 10 will be here before we know it, and testimony on HB 4131 is rolling in fast. When I logged on this afternoon I found six or so submissions. This evening, the number was up over 40.

It’s unlikely we’ll see any other bills proposed this session on the cannabis side given other legislative priorities in 2024, and given the normal limitations of a five-week session. So grab your popcorn and enjoy. I’ll check in at the end of the session or if anything especially interesting happens prior.