Big Changes Coming in 2017 for Recreational Cannabis

Recreational cannabis has been legal in Oregon for a little over a year. This is an area of the law that is constantly changing, making it particularly hard for growers, distributors, and retailers to stay in compliance. As of the new year, there will be several changes to cannabis regulation within the state. Whether you are a producer, distributor, retailer, or consumer it’s important to learn how these new changes will affect you before they take effect.

As it stands right now, there are no dispensaries operating exclusively for the sale of recreational cannabis. When recreational cannabis sales became legal in October of 2015, permits for recreational sales had not yet been issued. In an effort to resolve this issue, the “Early Start” program was created.

The Early Start program allows medical dispensaries to hold and sell a limited amount of cannabis for sale to recreational customers at their medical storefront. At this point, all dispensaries that are selling recreational cannabis are doing so under the Early Start Program. Because the program was only ever meant to act as a placeholder until recreational licenses were issued, the program expires December 31, 2016, with recreational licenses expected to be issued near the end of 2016.

Starting in 2017, medical and recreational cannabis will be divided up into two completely separate chains of commerce, with medical cannabis under the authority of the Oregon Health Authority (OHA)  and recreational cannabis under the authority of the Oregon Liquor Control Commission (OLCC). This means that recreational producers will only be able to sell their product to recreational distributors and retailers and vice versa.

These rules start to get particularly tricky for those growers who have been growing for medical purposes, but who have recently applied for a recreational producers license. As of December 31, 2016, such growers will have two options. The first option is to convert their existing grow operation into a recreational production site through an inventory transfer. The second option is to maintain their medical grow operation at one site and start a completely new site for recreational growing.

To further confuse this process, the OLCC has hinted at a program called the “Bump Up” program which would allow a grower carrying a recreational producer’s license to grow a limited amount of cannabis for medicinal use at the same grow site. Frustratingly, the OLCC has only stated that they anticipate promulgating rules for the Bump Up program in early 2017, leaving growers with a fair level of uncertainty when deciding how to proceed with their businesses.

As with other regulated industries such as alcohol and tobacco, failure to stay in compliance with cannabis regulations can have a serious effect on your business. If you have questions about the current regulations, or would like advice specific to your business please contact our office at 503-206-6401 and we would be happy to assist you.