BREAKING NEWS: Oregon to “Pause” Acceptance of Marijuana Applications

Yesterday afternoon, the Oregon Liquor Control Commission (“OLCC”) revealed a information release titled “OLCC Will Pause Acceptance of Marijuana License Applications.” This “pause” takes influence Friday, June 15th. The agency’s unexpected announcement was a major surprise to practically everyone, and we acquired a flood of e-mails and cell phone calls through the afternoon.

Individually, I are not able to recall acquiring so a lot of urgent calls and e-mails linked to an administrative or political advancement at any place in the earlier 7 decades of working with hashish firms. That consists of marketplace shakeout after current seismic activities like the election of Donald Trump, the appointment of Jeff Classes as U.S. Attorney Basic, and Mr. Sessions’ rescission of the Cole Memo. In all, the OLCC announcement triggered a major stir.

This post will address thoughts along the traces of all those we acquired yesterday afternoon, in an attempt to give some consolidated feelings as to what is heading on with Oregon cannabis licensing.

The OLCC announcement states it will “temporarily shift licensing staff to exclusively system leisure cannabis license renewals and applications…”. Does the word “applications” refer to new apps, as properly as alter in ownership apps? What about “applications” for alterations in money curiosity?

We have verified with OLCC that the announcement refers only to new apps. We also have verified that the company will carry on to settle for new apps after June 15th lower-off. Nevertheless, OLCC will not transfer all those apps ahead in the queue or get started to system them. The focus will shift completely on apps submitted prior to June 15th, alterations inside existing licenses, and renewals.

How long is the pause?

We really do not know. And OLCC almost certainly doesn’t even know at this place. Conceivably, it could past through the following legislative session, starting in early 2019, when the OLCC could search to the legislature to set some parameters on new license issuances. At a least, it appears very likely that the pause will extend into the slide, specified the software backlog and specified the actuality that the announcement states OLCC’s intent to place “additional means into the industry for compliance action, with a focus on targeting Oregon’s 2018 slide outdoor harvest.”

Can the pause go on indefinitely?

Almost certainly not, until the legislature alterations something. In our conversations with OLCC above the earlier couple decades, the company has usually acknowledged that the present-day statutory construction stops it from capping the variety of licenses it awards. As a result, less than present-day law, the only way OLCC can restrict the sum of cannabis currently being manufactured in Oregon is through controlling canopy measurements (which it has not sought to do).

Is OLCC heading to talk to the legislature for even more statutory controls for licensing in 2019?

It appears very likely, of course.

I am closing a significant true estate transaction following week! There is no way I can get a LUCS and every little thing else I will need to apply by June 15th. Am I screwed?

You could be. If you are not inclined to forfeit your earnest money and stroll away, the best you can do is close the deal and apply for a license, and wait around and hope for OLCC to re-begin its conveyor belt.

Is there any likelihood OLCC will extend this abrupt deadline?

Just about anything is probable but that appears unlikely. It’s also probable that we could see a carve-out for future applicants who can by some means confirm persuasive instances or money hardship owing to the abrupt deadline. But that also appears unlikely, and it is difficult to know how all those parameters would even be set.

Why are they truly undertaking this?

The causes stated in the information release are persuasive. Provided all of the mergers and acquisitions heading on in the Oregon marketplace, our Portland office environment processes a significant sum of alter-in-ownership, mortgage clearance, and other varieties of transactions with OLCC. We can verify that the system has become painstakingly gradual for firms and buyers, in spite of OLCC’s best attempts. Applications for new firms are also quite gradual. In addition, the announcement references the will need to “put additional means into compliance activity” as stated higher than. That is a good thought commonly, but there is likely some political pressure guiding this objective, far too.

What do we do following?

More information will be offered in the coming days and months. So sit restricted and stay tuned. Alternatively, you can usually head to California. They have the opposite dilemma.

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