On Oct. 22, 2015, the Oregon Liquor Control Commission, responsible for regulating the state’s recreational market, approved a wide-ranging framework of rules for the industry from seed to sale. The 78-page document crafted by the commission will go into effect Jan. 1, 2016, when the state will begin to accept applications for dispensaries devoted to recreational sales. The OLCC has stated that these regulations will “remain in place until June 28, 2016 or until the OLCC adopts permanent rules.”
While medical dispensaries began selling recreational product to adults over the age of 21 at the beginning of October, they have been operating under special authority from the medical marijuana program. The OLCC’s adoption of temporary rules is a critical step in carving the new frontier for sensible legalization from the state and local level.
The advisory committee that provided recommendations to the commission was comprised of more than 100 citizens from community organizations, law enforcement and the legal marijuana industry. While these regulations are in place during the first half of 2016, the OLCC will take written public comments and hold public hearings over the 180-day period to assist in ensuring that the permanent rules reflect the will of Oregonians at large.
For now, there are several issues that remain somewhat contentious for some of the parties involved. One of these provisions may help investors from outside of Oregon participate in the state’s nascent industry. Rules adopted in the 2015 session stipulated that growers, processors, wholesalers and retailers needed to have legal residence in Oregon for a minimum of two years. The temporary regulations allow license applications by nonresidents to be reviewed by the OLCC over a 30-day period.
Budtenders are now required to undergo background checks and are disqualified if they have any previous felony convictions. The commission has also addressed packaging for edibles. Under these new rules, packaging and changes to flavors must be preapproved by the OLCC. These rules also impose a 30-day license suspension for locations that sell to minors and also outline necessary security measures including mandatory video surveillance. Further, after Dec. 31, 2016, medical marijuana dispensaries will no longer be allowed to vend recreational marijuana.
A provision included in the new legislative framework will make Oregon the first state in the country to allow delivery of recreational marijuana by licensed retailers to adults over the age of 21. In response to this change, Sam Chapman, founding member of New Economy Consulting and lobbyist for drug policy reform, told MJINews,“This certainly opens the door to new target demographics that may not have otherwise been reached, such as seniors, people with disabilities, private social gatherings, etc.” Oregon’s most populated city is oft-noted for its innovations in mobile businesses such as food trucks, delivery by bicycle, and others, so it seems fitting that marijuana delivery will debut in the state.
This is exciting news, but the strict regulations to be enforced for delivery might hinder the extent to which it is a commercially viable option for retailers. “Obviously the fact that deliveries cannot be made to hotels, bed and breakfasts, or similar commercial businesses is going to further the existing problems that come with tourism and visitors who need a safe and private space to consume their products,” Chapman explained.
It is true that this caveat is not good news for those interested in boosting “green tourism” in a state that does not currently do much to support interested visitors. Chapman added, “the requirement that all orders must be placed by 4 p.m. may hinder the overall potential of these delivery services. Delivery is certainly a new and exciting frontier, and I’m confident the rules will expand over time to allow for a wide array of business models to enter the market.”
A delivery may only be made to an individual who has made a “bona fide order” for it before 4 p.m. The order is to include the requestor’s name, date of birth, date of delivery, address and the amount of marijuana purchased, as well as a statement that it is for personal use and not resale. The actual delivery of an order has to be made between 8 a.m. and 9 p.m. upon which the deliverer must check the customer’s identification and confirm that it is the same individual who placed the order, that the customer is over 21 and is not visibly intoxicated.
The opportunity for large scale deliveries will be severely limited because no more than $100 in retail value marijuana products may be transported at any given time. All items must comply with packaging regulations and be placed in a larger receptacle that is specifically labeled for delivery. These items must then be “kept in a lock-box securely affixed inside the delivery vehicle.”
It will be interesting to see how these temporary regulations impact ancillary businesses that offer packaging and security for the industry. As these measures are put into effect, it will be worth noting whether or not retailers turn to delivery as a viable model and what aspects of the regulatory framework impact the bottom line.
By: Tori Conley