OLCC Recreational Marijuana Implementation Rob Patridge, Chair, Commission Steve Marks, Executive Director Will Higlin, Director of Licensing and

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1 OLCC Recreational Marijuana Implementation Rob Patridge, Chair, Commission Steve Marks, Executive Director Will Higlin, Director of Licensing and Compliance November 16, 2015

2 OLCC CONTINUING COMMITMENT TO ENGAGEMENT Website: 1.14 million hits, central clearing house for information up from 800,000 in September. Gov Delivery: 29,000 marijuana list serve subscribers provides announcements and rule updates, up from 16,000 in September Online survey: 16,500 participated, identified priorities, informed community meeting process Listening meetings: 11 cities, 3,000 participants, many involved or planning to be involved in industry Technical subcommittees and Rules Advisory Committee: 38 meetings, 100+ participants industry, local government, law enforcement Temporary rules public hearing - October 9 th Commission adopted temporary rules October 22 nd Creation of law Enforcement Advisory Group and Business Subcommittee Permanent rulemaking begins in January; rules to be adopted by June 28, 2017

3 RULES CHAPTERS TEMPORARY RULES Application and License Requirements Producer License Requirements Processor License Requirements Wholesale License Requirements Retail License Requirements Retail Delivery Laboratory License Requirements Research Certificate Producer Opt-in Marijuana Handlers Permit Recordkeeping and Inventory Tracking Security Transportation Waste Disposal Minor Control Plan Packaging Advertising Compliance & Sanction Schedule Temporary rules adopted. Permanent rules to be adopted by June 28, 2016.

4 RESIDENCY Statute: Requires applicant to be both an Oregon resident and the legitimate owner of the business Temporary rules: Applicant is defined as any individual or legal entity that has a financial interest in the business and is directly involved in controlling the ordinary course of business. Safe harbor for investors. Oregon resident(s) must own at least 51% of business in order to be considered a legitimate owner(s) Non-resident owners must not be directly involved in the operation or management of the business. Provision in temporary rules that allows the OLCC to review non-resident applications until 30 days after the 2016 Oregon legislature adjourns

5 CANOPY LIMITS Statute: Consider market demand when setting canopy limits Set canopy limits to reflect equivalent yields for indoor and outdoor grows The licensed premises for an outdoor grow is defined as the entire tax lot Temporary rules: Indoor: Tier 1 (up to 5,000 sq. ft.); Tier 2 (up to 10,000 sq. ft.) Outdoor: Tier 1 (up to 20,000 sq. ft.,.45 acres); Tier 2 (up to 40,000 sq. ft.,.9 acre) Greenhouses: Categorized as indoor if utilize artificial lighting, otherwise categorized as outdoor Allow local governments to petition for larger canopy limits Allows multiple growers in separate sections indoors, one grower per outdoor tax lot Issues raised: Separate category for greenhouses Multiple outdoor growers on one tax lot Desire for larger canopy sizes

6 FEES Statute: Set fees that recover, but not exceed, the cost of administration Fees for each license type cannot exceed the cost to administer that license type Budget Note: tier fees for all license types; fees must be less than those charged by OHA Temporary rules: Estimates based on Colorado and Washington experience adjusted downward for population, and upward for Oregon s medical marijuana retail outlets All license types: $250 application fee Grower: $3,750 tier 1; $4,750 tier 2 All other license types: $4,750 Package and/or label approval: $100 Marijuana Handlers: $100 every 2 years (includes $50 background check) Issues raised: License fees are higher than $1,000 in Measure 91 Fee volatility, estimated number of licenses may not be accurate Detailed cost accounting for each license type is time consuming and problematic

7 HOME DELIVERY Statute: Retailers may deliver recreational marijuana directly to consumer Temporary Rules: $100 limit per delivery and requirement that home delivery be located within the licensee s jurisdiction Delivery limited to residences Must verify ID Issues raised: Advisory committee s concerns for employee and public safety

8 CO-LOCATION Statute: Requires OLCC-licensed retailers to obtain marijuana items from other OLCC licensees Prohibits OLCC from investigating for compliance with OMMP Temporary Rules: Prohibit issuing an OLCC license at a location that is registered with OMMP, except for growers who opt-in as allowed by statute. Issues raised: Stakeholders have expressed interest in co-location of recreational and medical dispensaries and processors OLCC would need tracking in the Cannabis Tracking system as well as be granted sufficient authority to regulate

9 EDIBLES, TESTING, PACKAGING, ADVERTISING Statute: OLCC licenses processors and laboratories, adopts rules for packaging, advertising OHA certifies labs and develops requirement for pesticide testing, adopts rules for labeling, serving size, and dosage ODA provides guidance for acceptable pesticide use; responsible for licensing food establishments Temporary rules: Protect minors Packaged in a child-resistant container or in a child-resistant exit package at the time of sale Not packaged or labeled in a manner that is attractive to minors Advertising may not target minors, excessive use or promote illegal activity and must contain warnings Protect consumers Labeled in accordance with OHA rules Issues raised: Defining attractiveness to minors Availability of certified labs Industry self-regulation of advertising

10 2016 SESSION COMMISSION REQUESTS Policy Issues: Simplifying accounting for fees license fees may not exceed the cost of the program instead of individual license types Timing of land use compatibility statement require applicant to obtain the LUCs prior to submitting their application Include consideration of certain misdemeanors as license denial criteria for marijuana handler permits Start up resources contingency funds should number of applicants be higher than forecasted Technical Fixes: Tax language cleanup DOR tracks collection of taxes Delegation of authority mirror alcohol language Financial interest clarify discretion and materiality Bonds DOR requires tax bonds Liquor Funds reimbursement timing move repayment to September 30, 2017

11 IMPLEMENTATION UPDATE Integration Planning Hiring Training Applicant Support Technology Intergovernmental agreements

12 KEY INTEGRATION/EXECUTION OBJECTIVES Organizational structure Created an organizational structure that integrates the new marijuana program into the OLCC organization to effectively leverage the knowledge and expertise of current staff Internal steering committee Created an internal steering committee with representatives from all divisions at the OLCC to be responsible for the execution of the Marijuana Program Integration of staff & internal training Integrate Liquor and Marijuana Licensing and Compliance staff to improve overall efficiencies and customer service to licensees External training program Develop external training program for potential licensees that encourages participation in the legal market

13 KEY INTEGRATION/EXECUTION OBJECTIVES Online Licensing System On-track and undergoing User Acceptance Testing Back-up paper process is ready to implement, should the system be unavailable by the statutory guidelines Cannabis Tracking System On-track and ready for delivery first Quarter 2016 Research and planning RFI and business process mapping Stage Gate 1 Stage Gate 2 Business Case/Charter RFP, Draft project management plan Final project management plan Begin project Stage Gate 3 Stage Gate 4 Close out Lessons Learned report

14 INTERNAL LICENSING AND COMPLIANCE TRAINING Cross train existing staff in tandem with marijuana personnel Key Training Components: New Employee Orientation Overview of Measure 91, HB 3400, Temporary Administrative Rules DPSST training Online Licensing Program Training Cannabis Tracking System Training Investigation Best Practices Compliance Best Practices Grower, Processor, Labs, Retailer site visits

15 HELPING APPLICANTS BE SUCCESSFUL Compliance Philosophy Online application and rules training Informational meetings for potential licensees and local governments: Bend, Medford, Eugene, Salem, Portland Cannabis Tracking System Training Interagency coordination Business Readiness Guide Website and Gov Delivery

16 INTERAGENCY COORDINATION OLCC OHA ODA DOR IAAs Comprehensive Regulatory Framework

17 Business Readiness Guide

18 TIMELINE Commission adopts temporary rules Oct. 22, 2015 Commission temporary rules technical issues Nov. 20, 2015 Training - Online license application tool Dec Accept license applications Jan. 4, 2016 Training: Cannabis Tracking System 1 st Quarter 2016 Oregon Legislative Session Feb Grower, Processor, Lab Licenses issued 2 nd Quarter 2016 Public hearings on final rules 2 nd Quarter 2016 Commission adopts final rules - June 28, 2016 Retail store licensing 3rd Quarter 2016 Licensed retail stores begin operating 4th Quarter 2016

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