New Cannabis Laws Coming, License Moratorium Is Back

Tonkon Torp LLP

Tonkon Torp LLP

It’s official: the moratorium on new cannabis licenses is back on. During their February 2022 session, the Oregon legislature passed HB 4016, which prohibits the issuance of new cannabis licenses of all types (except labs) until March 31, 2024. The Bill is also retroactive – any applications submitted after January 1, 2022 will be inactivated by the Oregon Liquor and Cannabis Commission (OLCC).

If you applied for a retail, processor, or wholesale license between November 8, 2021 (when the OLCC lifted the longstanding pause on processing new applications for those license types) and January 1, 2022, your application will be processed so long as a valid Land Use Compatibility Statement (LUCS) is received within 21 days of the effective date of the Bill. The Bill does restrict these applications from changing location and ownership at certain levels. 

Distribution of Inactive Licenses
As part of HB 4016, the OLCC is directed to establish a program to allow assignment of expired, surrendered, or otherwise relinquished licenses to “qualified” applicants. What that will look like remains to be seen, but the OLCC has publically committed to establishing an equity-based program. Rulemaking to implement this new directive will likely begin soon, so stay tuned. 

More Local Control Over Hemp Production
Individual counties in Oregon will now have more ability to restrict the number of hemp grows in their jurisdiction. SB 1564, also passed during this legislative session, allows counties to declare a “state of emergency” and request that the Oregon Department of Agriculture (ODA) suspend the issuance of new hemp production licenses for the coming grow season. Counties have certain deadlines in the new law in which to notify ODA of their requests. Presumably, most, if not all, Southern Oregon counties will utilize this new law, given the extremely high number of illegal grows in their region. 

There will undoubtedly be additional regulatory changes coming as a result of this new legislation. Please consult with your legal counsel if you have questions about the impact to your business. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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