Oregon Cannabis 2021: Legislative Forecast and Report

The Oregon legislative session kicked off in earnest last week (online) with 28 proposed cannabis bills crowding the docket. We’ll probably see another dozen or so between now and June. In this post, I will run down the list and offer brief comments on each offering. Before diving in, though, some context will be useful.

First, the Oregon legislature is somewhat dysfunctional. Last year, the session was cut short when Republican legislators skipped town to protest the Democrats’ climate change bill. A series of draft cannabis laws (along with everything else) was left in the lurch. This year, the legislative focus seems centered on crisis response (COVID, wildfires, etc.) with big policies taking a back seat. In a sense, that bodes well for cannabis bill prospects, alongside the fact that the session is slated to last a full five months. But the Democrats still do not have a quorum-proof majority, so really, anything could happen.

Second, the recent success of ballot Measure 110 (which decriminalized all drugs in Oregon) will have a significant, unpredictable impact on cannabis legislating. Most immediately, it will peel off about 75% of current statewide marijuana tax revenues. This is because Measure 110 “dedicates all marijuana tax revenue above $11,250,000 quarterly [to ‘addiction recovery centers].’” As such, we should expect to see a lot of discussion around bills to raise marijuana taxes. (I’ll probably be pilloried for saying this, but Oregon is a comparatively low-tax, high-cannabis consumption state, and taxes could go higher.)

Third, something needs to be done about hemp. The Oregon Department of Agriculture (ODA) recently withdrew the hemp plan it had submitted to the feds. This means we will proceed for one more growing season under the 2014 Farm Bill—which is a not a bad thing—but the program is at a regulatory crossroads, of sorts, on certification and other issues.

And fourth, if we are ever going to see a cannabis social equity bill become law, this should be the year. We have engaged with various stakeholders on the $100 million Oregon Cannabis Equity Act and things seem to be progressing well– although the proposed bill has not yet been introduced. In my view, the big challenges here are going to be:

  1. Finding money (there’s not much lying around right now, although Oregon may get see more support from the feds this year);
  2. Surviving the Ways & Means committee (the bill would almost certainly “create a fiscal” and be sent to W&M);
  3. Dialing in the best possible language to survive equal protection challenges; and
  4. Unfortunately, this ship has sailed to some extent. There are thousands of cannabis industry licenses issued at this point in Oregon, and would-be beneficiaries of the Oregon Cannabis Equity Act will start from a moored position. The legislature should have dealt with this way back in 2015.

So that’s the big picture. In the long list of bills below, I’m going to keep the comments brief– not so much for timing or readability concerns, but because it’s hard to know what to make of all the cannabis bills this year. In most sessions we begin with a clear idea of which bills have momentum, which have none, which could be patched in elsewhere, and which could be gutted and stuffed. At this point, though, the Joint Committee on Marijuana Legalization is a few years gone and the legislature’s composition has changed dramatically over a short period. There are just a lot of new people and ideas, with COVID throwing a wrench into all of it.

House Bills (20)

HB 2014.  Distributes marijuana tax dollars to certain cities determined by population and location of city, and based on share of retail sales of marijuana items in state. This would be an exception to standard distributions based on city share of population and of licenses for marijuana- related businesses.

I am not sure this is going anywhere. Some jurisdictions will love it and some will hate it, for obvious reasons.

HB 2015.  Increases maximum percentage of tax that a city or county may impose on sale of marijuana items, from 3% to 10%.

I believe the rates will increase, unless the state wants to claw some of this back from the localities. One way or another, I think marijuana taxes will go higher.

HB 2111.  Changes name of “Oregon Liquor Control Commission” to “Oregon Liquor and Cannabis Commission.”

By keeping the OLCC acronym, at least they’ll be saving on stationery! I do expect this one to pass, either on its own or as part of a cannabis Christmas tree elsewhere.

HB 2263.  Directs OLCC to study recreational marijuana tracking. It requires a report and sunsets in a year.

To me, “marijuana tracking” doesn’t seem to be a pain point in the OLCC program right now, but let’s see what happens here.

HB 2265.  Directs OLCC to study cannabis. It requires a report and sunsets in a year.

Obviously, this is really general. Someone needs to dial this in or drop it.

HB 2281.  Directs ODA to administer Oregon Hemp State Program for production, processing and sale of hemp. [Status quo.] Changes term “industrial hemp” to “hemp.” [Good idea.] Requires department to conduct criminal records check of applicants for licensure to grow hemp. [Mirrors 2018 Farm Bill protocol. Would exclude the bad guys but also hurt people who were unfairly victimized by the War on Drugs.] Allows department to identify and require by rule licensure for other activities related to hemp. [OK.] Directs department to establish by rule requirements for shipment manifest for commercial hemp shipments. [Sounds good.] Becomes operative January 1, 2022.

HB 2284.  Establishes an Oregon Hemp Commission.

More and more, I’m thinking we don’t want a special commission for this one commodity crop. I may pick up this topic in a future post.

HB 2294.  Imposes tax on wholesale sales of marijuana items across county borders, occurring on or after January 1, 2022.

I don’t like this one. I love the simplicity of Oregon’s current retail tax model. From an administrative perspective, it’s so easy to deal with. I also dislike the “county” issue here. There is no reason to discourage cannabis being transported from where it grows (and should be grown) to where it will be sold.

HB 2296.  Allows ODA to enter into agreements with law enforcement agencies to assist the department in carrying out certain inspections of industrial hemp.

Obviously the concern here is diversion and disguised THC crops. But there are a lot of challenges with a set-up like the one proposed here, from how the testing is actually done to general policing and delegation issues.

HB 2416.  Directs ODA to advance design of cannabis business certification program. Directs Oregon Liquor Control Commission (OLCC) to allocate moneys from Marijuana Control and Regulation Fund to department for purposes of cannabis business certification program.

More red tape. No.

HB 2445.  Enacts a 2028 sunset for exemption of medical marijuana registry cardholder or primary caregiver from tax imposed on retail sale of marijuana items.

Expect serious pushback, even with the date kicked out so far. Oregon has never been able to tax medical marijuana, although I wonder how strong the patient lobby is anymore.

HB 2519.  Allows delivery of marijuana items to consumers within a city or county in which a marijuana retailer is located and to consumers in cities or counties that have adopted ordinances allowing for delivery of marijuana items from adjacent cities or counties.

Absolutely. Delivery is working great with COVID and was before, too.

HB 2671.  Hemp. Directs ODA to issue research licenses to qualified applicant. Allows licensed researchers to collect samples of industrial hemp crops that exceed tetrahydrocannabinol limit to perform studies related to crop biochemistry.

Sounds good although I doubt they’d get many applications.

HB 2973.  Prohibits adults from possessing more than two ounces of usable marijuana in public place. Provides that delivery of not more than two ounces of usable marijuana to adults is exempt from certain laws regulating marijuana. Directs OLCC to adopt rules in accordance with possession limits.

So it keeps the personal possession limits in place, but only at a residence. The trick here, or one of them, would be getting the “public place” definition right. Not an inspiring idea overall.

HB 2982.  Prohibits OLCC from disciplining a licensee or licensee representative for violation if violation is result of theft.

Absolutely! I have been complaining about this since the day the rules issued. 

HB 2990.  Requires Oregon Health Authority (OHA) to share specified information related to marijuana for medical use with authorized employees of local governments for certain purposes.

State and local law enforcement already have access to this information by statute. Not sure what the policy concern is here, with respect to local government employees.

HB 2996.  Directs OLCC to establish by rule process to register medical marijuana grow sites. Defines “medical marijuana grow site.” Allows medical marijuana grow sites to apply for registration no later than June 1, 2022. Establishes plant production limits for medical marijuana grow sites registered by commission. Specifies that marijuana grow sites registered by Oregon Health Authority may produce marijuana for no more than two registry identification cardholders. Becomes operative January 1, 2022.

This bill is trying to wind up a years-long process of moving medical marijuana regulation from OHA to OLCC. We saw this one coming many years ago.

HB 2997.  Directs Department of Revenue, OHA, OLCC, ODA and the Governor’s office to consult with Oregon Cannabis Commission and other cannabis entities to develop plan to address issues related to regulatory authority over marijuana, over the course of one year. Requires plan to be submitted to interim committees of Legislative Assembly. Directs OLCC to adopt rules to develop compliance education programs for cannabis entities regulated by commission.

I don’t see it happening. Too many bigger fish to fry.

HB 3000.  Directs OLCC to “study cannabis”: for a year. Requires report to interim committee of Legislative Assembly related to judiciary.

Mirrors HB 2265. Please provide details Representative Wilde!

HB 3013.  Same as HB 3000.

Senate Bills (8)

SB 35.  Directs ODA to administer Oregon Hemp State Program for production, processing and sale of hemp. [Status quo unless the state gives up next year and doesn’t submit a USDA plan.] Changes term “industrial hemp” to “hemp.” [Good.] Requires department to conduct criminal records check of applicants for licensure to grow hemp. [I don’t like it. Mirrors 2018 Farm Bill policy.] Allows department to identify and require by rule licensure for other activities related to hemp. [OK.]

This one will probably be reconciled with HB 2881, and merit some real discussion.

SB 96.  Defines “cannabinoids” for purpose of inhalant delivery systems. Authorizes OHA to consult with OLCC on adoption of rules related to inhalant delivery systems containing cannabinoids. Authorizes commission to regulate testing and labeling of inhalant delivery systems that contain cannabinoids derived from industrial hemp.

The state has been grappling with vape laws and rules for a while. Will be interesting to watch this one.

SB 157.  Enacts 2028 express sunset for exemption of medical marijuana registry cardholder or primary caregiver from tax imposed on retail sale of marijuana items.

cf. HB 2445 above.

SB 307.  Waives fees for obtaining medical marijuana card for veterans who have total disability rating of at least 50 percent as result of injury or illness incurred or aggravated during active military service, and who received discharge or release under other than dishonorable conditions.

Seems like low-hanging fruit, with the only question being whether 50% is the right number.

SB 400.  Directs OHA to study medical marijuana registry identification cardholders, for a year. Requires report to interim committee of Legislative Assembly related to judiciary.

More information — the right kind of information — would be fine. May not go anywhere.

SB 402.  Allows hemp grower or handler to sell or transfer hemp cuttings. Defines “cutting” as any part of the hemp plant that (A) has been removed or has fallen off the hemp plant; (B) is not dried; and (C) does not include any roots, or parts or roots, of the hemp plant.”

The discussions here will be pretty fun! It’s obvious why industry wants this; cops not so much.

SB 408.  Allows marijuana producer to track mature marijuana plants by “batch” [as opposed to by plant]. Allows marijuana producers owned at least 51 percent by same person to transfer to one another marijuana and usable marijuana. [Producers cannot currently transfer to producers, at all.] Allows marijuana producer to receive specified marijuana items from marijuana processor. [I want to understand the policy here.] Specifies information required in transfer manifest for transport of marijuana. [OK.]

Interesting bill overall; some atmospheric OLCC issues.

SB 411.  Directs OHA and OLCC to study cannabis packaging and write a report by next session.

Hopefully the idea here is not to go more restrictive.

Stay tuned as always. We will update during the course of the next five months on any big developments, and recap per usual at the end of the session.