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How to Obtain an OLCC Marijuana License in Oregon

A legal overview of the four types businesses can apply for

By Super Lawyers staff on September 6, 2019

In 2014, Oregon voters went to the polls and approved Measure 91—a bill that put the state on the path to legalizing marijuana for recreational use. Among other things, Measure 91 gave the Oregon Liquor Control Commission (OLCC) the legal authority to regulate and tax the recreational marijuana industry starting in 2016. Any Oregon company seeking to do business in the marijuana industry must obtain the appropriate license from the OLCC.

In Oregon, there are four different general types of marijuana licenses available:

  1. Recreational Producer License: Designed for growers and cultivators of cannabis, businesses with a recreational producer license are permitted to sell their finished products to processors, wholesalers, and retailers.
  2. Recreational Processor License: After purchasing products from a recreational producer, licensed recreational processors in Oregon are allowed to make marijuana concentrates, edibles, and extracts. These products can be sold to wholesalers or retailers.
  3. Recreational Wholesaler License: In Oregon, a licensed marijuana wholesaler can purchase marijuana products from other licensed marijuana businesses and sell marijuana products to other licensed businesses.
  4. Recreational Retailer License: Finally, an OLCC licensed recreational retailer is permitted to sell marijuana products to consumers. To be clear, only businesses with this type of license are allowed to sell recreational marijuana products to the general public.

“Then there’s a lab license for testing, because you’re required to test for THC, CBD, mold, mildew, water content, and then a whole slate of different pesticides,” says Andrew C. DeWeese, an attorney with Green Light Law Group in Portland. “There’s also something known as a research certificate, which is a special license that allows you to perform approved research using cannabis procured from other licensees.”

Under those broad categories there are also sub-categories under the producer and processor licenses. For production, it is separated into four tiers that refer to the size of the canopy in which you’re allowed to grow and if it’s indoors or out. “In the micro-tiers, the sizes are much smaller,” DeWeese says. “Those are designed to enable smaller family farms to get into the business. Those micro-tiers also have fewer restrictions on where they can be, and also they can also engage in some limited processing.

“When you apply for your license, and you tell them what your canopy area is going to be, that can’t change until you either renew or you apply for a change. So you can’t be an outdoor grower in the summer and then change,” he adds.

For processing licenses, there are four different endorsements you can seek. DeWeese summarizes them as follows:

  1. Concentrates endorsements, which means you can make cannabis products such as hash or rosin out of cannabis made using only a physical separation process or a non-hydrocarbon-based pressure or high-pressure CO2 extraction process.
  2. Extract endorsements, which is the typical CO2 extract that you see made using self-critical or supercritical CO2 extraction under high pressure, or butane honey oil that people like to dab. It’s purged in a vacuum oven so the butane doesn’t stay in the product. This is a bit harder to get than the other endorsements because of the nature of what you’re making.
  3. Processor endorsements, which is the edible endorsement.
  4. Topical endorsements, which enables you to make products which are for use on the body rather than ingested

An Oregon Cannabis Lawyer Can Help

The application is fairly straightforward, DeWeese says, and you may not need a lawyer for it. Actually getting a license, however, is another matter.

“The first thing I tell them is, ‘You better be prepared to wait two years or longer because there’s simply so many out there,’” says DeWeese.

“What we’re seeing a lot more is mergers and acquisitions of licenses. It’s hard to get a new license, so if you want to get into the game, you have to buy somebody’s license. That is really a situation where you need a cannabis lawyer because that has to be handled in exactly the right way. The OLCC really cares about knowing everybody involved in the operation—especially those with a financial interest. If you have somebody who is a silent partner and who’s not disclosed to the OLCC, they’ll take your license away. Most people have partners or get loans or things like that, and those have to be disclosed properly. So that’s something you might need an attorney for.”

Obtaining a Land Use Compatibility Statement (LUCS) is another important piece an attorney can help with, along with several other business matters. “Getting a license is one thing, but setting up your business is another, and is extremely important. Even if you don’t have partners, having your corporation set up in the right way to maintain that corporate veil is also vital,” DeWeese says.

“When my clients have found it useful to have an attorney involved is for preventions. The consequences of not following the regulations in practice can be extremely severe. So, for example, one of the requirements is that a marijuana licensee has to have an offsite backup for their video surveillance and they have to have at least 90 days. We’ve seen the OLCC come in and say, ‘Hey, you’ve only got 75 days of backup. So we’re taking your license away.’”

How to Obtain an OLCC Marijuana License in Oregon – an article appearing in Super Lawyers Magazine August 2019

LEARN | LAWS & REGULATIONS

Oregon

Is weed legal in Oregon?

Yes. In Oregon, adults 21 and older are allowed to possess and use recreational cannabis, which can be purchased from a marijuana dispensary or shop. Adult-use cannabis has been legal in the state since 2014; medical marijuana has been legal since 1998.

Legislation history

Following Oregon voters’ passage of Measure 67, the Oregon Medical Marijuana Act , in 1998, the state became one of the first to implement a medical cannabis program. In 2014, voters in the Beaver State approved the Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act , or Measure 91, legalizing the sale, possession, and use of recreational cannabis.

New Oregon weed laws have gone into effect to address regulatory issues in the marketplace, from curbing illegal marijuana sales to keeping cannabis accessible to those who need it. In December 2018, the Oregon Liquor Control Commission (OLCC), which regulates the state’s marijuana market, tightened its licensing rules. In June 2019, the passage of SB 218 took things a step further , granting the OLCC permission to refuse initial production licenses at the department’s discretion.

The OLCC controls all licensing and regulation of the Oregon recreational weed market , while the Oregon Health Authority oversees all licensing and regulatory oversight of the Oregon Medical Marijuana Program (OMMP).

Purchasing cannabis

Under Oregon adult-use marijuana laws, consumers ages 21 and older are allowed to buy the following at one time or in a day:

  • 1 ounce (28 grams) of cannabis flower
  • 16 ounces (454 grams) of a cannabis product in solid form
  • 72 ounces (2 liters) in liquid form
  • 5 grams intended for smoking or vaping
  • 5 grams of concentrates
  • Four immature plants
  • 10 seeds

Maximum THC limits per container for adult-use cannabis products are:

  • 50 milligrams in edibles
  • 6% in topicals
  • 1,000 mg in tinctures
  • 100 mg capsules
  • 1,000 mg extracts
  • 1,000 mg for other items including those not intended for human consumption

The Oregon Department of Revenue requires a 17% retail sales tax on cannabis and cannabis-infused products, and up to 3% in local taxes in some locations. Cannabis may only be purchased from an OLCC-licensed retailer.

Medical marijuana patients and their caregivers can buy cannabis from an OLCC-sanctioned retailer or an OMMP-approved dispensary as long as they have photo identification and a valid OMMP card. They are allowed to purchase:

  • 24 ounces (680.4 grams) of flower
  • 16 ounces (453.6 grams) of a cannabis product in solid form
  • 72 ounces (2.1 liters) in liquid form
  • 16 ounces (453.6 grams) of concentrates
  • 5 grams (0.2 ounces) of extract
  • Four immature plants
  • 50 seeds

Maximum THC limits per container for medical cannabis products are:

  • 100 milligrams in edibles
  • 6% in topicals
  • 4,000 mg in tinctures
  • 4,000 mg capsules
  • 4,000 mg extracts
  • 4,000 mg for other items including those not intended for human consumption

Retailers are allowed to deliver cannabis to patients, caregivers, and adult-use consumers throughout the state. Retailers registered to serve medical marijuana patients may even deliver to places in Oregon where marijuana sales are not allowed.

Finding licensed dispensaries in Oregon

Consumers can find licensed dispensaries in Oregon and search by city including Eugene, Portland, and Salem. Many dispensaries in Oregon offer delivery and curbside pickup services in addition to storefront sales.

Consuming cannabis

Adults ages 21 and older can legally consume cannabis on private property. They are not allowed to consume recreational marijuana in a public place, including establishments such as bars and restaurants licensed to serve liquor. Consuming cannabis is also illegal in a parked car in public view, while driving, or riding as a passenger.

Possessing cannabis

On private property or in possession while in public, recreational users may possess up to:

  • 1 ounce (28 grams) of cannabis flower
  • 16 ounces (454 grams) of a cannabis product in solid form
  • 72 ounces (2 liters) in liquid form
  • 5 grams intended for smoking or vaping
  • 5 grams of concentrates
  • Four immature plants

Gifting to adults ages 21 and older is allowed if it doesn’t exceed possession limits. It cannot include a financial transaction — such as a raffle, cover charge, or donation. The state considers these actions a marijuana sale. Extracts and concentrates purchased from licensed retailers are allowed but homemade ones are illegal.

Federal law makes it illegal to bring cannabis purchased in another state to Oregon or to travel with cannabis purchased in Oregon to another state, including the neighboring adult-use states of California, Nevada, and Washington.

Patients and their caregivers may possess up to:

  • 24 ounces (680 grams) of flower
  • 16 ounces (454 grams) of a cannabis product in solid form
  • 72 ounces (2 liters) in liquid form
  • 16 ounces (454 grams) of concentrates
  • 5 grams of extract
  • Four immature plants
  • 50 seeds

View the marijuana laws & regulations for Oregon.