Oregon’s cannabis market experienced extreme difficulties and regulatory upheaval in 2022. Many of the highlights below arise from the aftermath of HB 3000 (2021), the reverberations of which will likely continue as the legislature prepares for a long session in 2023:
1) The Oregon Equity Investment Act passes.
To start with the good, before getting into the bad and ugly, the Oregon legislature in 2022 passed Senate Bill 1579 to provide investments for communities most negatively impacted by the criminal justice system and find themselves the bottom of the state’s ever widening wealth gap. The legislation arose from work equity advocates and the cannabis industry pushed in 2021 to create a state-level cannabis equity program (which unfortunately failed to pass). While Oregon is still one of the few legalized states without an equity program, passage of the Oregon Equity Investment Act is a step in the right direction. Program funding is currently slated for a one-time allocation, and support is needed to ensure the program sustains into the future. For more information about the Oregon Equity Investment Act and cannabis equity in Oregon check out these posts:
2) More funding than ever for law enforcement.
The Oregon legislature in a special session allocated $25 million in one-time funding for marijuana enforcement in southern and central Oregon. This massive allocation is unprecedented in the history of legalized cannabis in Oregon, and is a major increase from the $6 million in enforcement funding that the Oregon Criminal Justice Commission (CJC) previously administered every biennium. The Oregon HB 3000 Task Force is currently finalizing a legislative report recommending increased criminal penalties for unlicensed cannabis production, providing ongoing funding for watermasters to inspect licensed cannabis operators, and expanding the CJC marijuana enforcement grant program to $40 million per biennium (potentially paid for out of the state’s marijuana tax account). Revitalization of the War on Drugs is a recurring topic on our blog, so if interested, please check out the articles below:
3) OLCC bans Delta-8 and other Artificially-derived Cannabinoids.
The aforementioned HB 3000 (2021) tasked the Oregon Liquor and Cannabis Commission (OLCC) with promulgating administrative rules to regulate hemp-derived cannabinoids that previously existed largely outside the agency’s regulatory authority. These artificially-derived cannabinoids (ADCs) caused a public health panic as the lack of regulation meant that these products, most notably delta-8 THC, were available outside the dispensary market and to minors. In a surprise twist the agency’s rules (now in effect) essentially banned ADC sales in Oregon, but leaves the door open for production of those products for export to out-of-state markets. This odd enforcement scheme has perplexed legislators and the industry will likely push for reforms to allow non-intoxicating ADCs, like CBN, to remain on the market. Below are articles tracking the develop of the ADC regulations:
4) New cannabis license moratoriums.
To combat overproduction and market saturation the Oregon marijuana industry lobbied and successfully passed a moratorium on the issuance of new production, processing, wholesale, and retail licenses. As a result, the only way to acquire one of the listed license types is through purchase of an existing license. The OLCC will create a license reassignment program to reissue forfeited and expired licenses, and there is some hope the agency will use this as an opportunity to create an equity licensing program. In the hemp industry, law enforcement successfully pushed legislation that allows local governments to stop ODA from awarding new hemp licenses in their jurisdiction. Jackson and Josephine Counties, the two largest hemp producing counties in the state, passed such moratoriums. Both the marijuana and hemp moratorium legislation included sunset provisions, so keep an eye out for potential legislation going forward.
5) Governor Brown pardons marijuana offenses.
Ending on a high note, outgoing Oregon Governor Kate Brown pardoned an estimated 45,000 convictions for simple possession of marijuana and by doing so absolved approximately $14 million in unpaid fines and fees stemming from those convictions. Governor Brown’s pardons came in the wake of President Joe Biden taking similar action at the federal level. Much work is still needed for Oregon to right to wrongs of prohibition, but nevertheless Governor Brown’s pardons are certainly a positive development.