OLCC's Recommendations on Marijuana Policy

[Beta Test Team]

Here's the cover letter:
http://www.oregon.gov/olcc/docs/commission_minutes/2015/Cover_Letter_%20OLCC_Recommendations_Memo.pdf

Right now the actual policy recommendations aren't online, the OLCC messed up and didn't upload the correct file. So I just called and spoke with them, they said they will fix it and upload the correct file ASAP (today). Once they upload the actual policy recommendations I'll post again.

My take-aways from the cover letter:

- Recreational producer, processors, wholesalers, and maybe retailers cannot co-locate with medical producers, etc.

- Medical growers cannot enter into recreational industry unless they jump through all the same hoops as everyone else (who isn't currently a medical producer, processor, or retailer). This is a HUGE win in my opinion, unlike what they did for the first year (or two?) in CO.

- There will be two separate systems in OR, medical and recreational; they don't seem to be thinking about merging them.

 

[Beta Test Team]

Here is where the new policy recommendations will be found once the OLCC fixes the error:
http://www.oregon.gov/olcc/docs/commission_minutes/2015/OLCC_Recommendations_Marijuana_Policy.pdf

 

[Beta Test Team]

This looks great!

The correct file has been uploaded by the OLCC.

However, this is only the proposed policy rules. We shall see what the joint commission on Cannabis industry in OR does next. See this post for more info on the commission:
https://www.icmag.com/ic/showpost.php?p=6769227&postcount=2

Here are my take-aways:

- Bonding may be required from a producer to cover tax obligations.

- Authority to set DUI rules.

- No firearms on premises.

- Liability insurance.

- Licensing and certifications for labs.

- Limitations on license co-location; it looks like they won't allow production and retail at the same place - which is expected. This also likely means medical and recreational can't co-locate due to the nonexistent seed-to-sale system for medical.

- Genetics will come from the medical industry in OR, for seeds and clones to start the producer’s plant stock.

- Medical industry producers may be allowed to sell their wares to recreational, only if the medical rules are changed to include seed-to-sale, and are the exact same as recreational.

- Three sub-categories is for processors: (1) packing; (2) concentrates; and (3) manufactured products (I assume edibles is what they mean). This setup is new, I have never seen this setup before.

- Producers are allowed to package their product for direct sale to retailers, so they don’t need to go to a processor for packaging.

- Retailers can break down large packages from producers into smaller packages for sale (pounds to grams).

- Bud-tenders must have a permit to work as a bud-tender, which includes a background check

- Home delivery is up the in air...I hope we get it!

- May ban 'smoking bars' where Cannabis isn't sold, only consumed.

- Residency is required for business owners, and the business must be registered in OR. This seems like they may allow out-of-state investors, yes!

- Buffer is 1,000 ft. of a school only! Which means K-12 with mandatory attendance. YES! This opens up so much more property than also including things like daycare, playaground, library, game arcade, etc.

- I see no limits on the number of licenses a business can hold, nor the type, nor the size! YES!

 

[Beta Test Team]

I think the "packaging" subcategory of processor license is the 'wholesaler' license that was discussed. What I found interesting is in OR they're trying to make so the producer is the processor as well, that is, the producer is allowed to trim and manicure their buds, and package them directly for sale to the retailer, cutting the processor (middle-man) out of the loop.

While in WA (and maybe CO I think), the processor is the license that packages buds for sale to retailers, it goes like this: Producer > Processor > Retailer. The processor can process any type of product, from buds, to concentrates, to edibles, as well as buy from any producer they wish to buy from. That is why a producer who is also not a processor is insane (or not savvy), because they have to go through a middle-man to sell all their product.

In CO a company can be vertically integrated (be a producer, processor, and retailer), in WA a company can either be a producer and/or processor, or, a retailer. In OR it looks like it will be fully vertically integrated like with CO, as well as like WA, where a company can choose how they want to take part in the industry.

So far OR's proposed rules are better than CO and WA combined, in my opinion.

 

[BigNoise]

This looks pretty solid overall.

Not sure I understand the "seed-to-sale" thing. Does this mean something like RFID tags for every plant that will be grown?

 

[Beta Test Team]

No, I don't think so, RFID tags have been a huge headache in CO. But each plant, product, seed, etc., gets its own identification number for tacking purposes (each plant is labeled).

Seed-to-sale is simply software to track all inventory, tracking from seed (or clone) germination to sale of the product. It's a catchy name is all. It's meant to prevent diversion of product to the gray or black markets.

What will happen is the state will list what it requires for its seed-to-sale rules, like how long data must be kept, who must have access to said data, etc. Then the software companies will update their software to be suited for OR.

There are a few company that are go-to for this, the main two are:

BioTrackTHC: https://biotrackthc.com/how-it-works

MJ Freeway: http://www.mjfreeway.com/products/

I like BioTrackTHC better than MJ Freeway (at least the last time I saw both), but I like the encryption offered by MJ Freeway (last I knew BioTrackTHC did do any encryption of data). BioTrackTHC offers other features (like POS) than only seed-to-sale, as does MJ Freeway. However, now it seems like MJ Freeway may be top dog.

BioTrackTHC is the official seed-to-sale system used by WA's version of OLCC. However, any software that meets the WA standards can be used, e.g. MJ Freeway.

CO uses MITS (Marijuana Inventory Tracking Solutions): http://www.metrc.com/

Here's a really good article on this topic regarding OR. I think OR will go the way of WA (identfiication numbers), not the way of CO (RFID):

"How do Washington, Colorado track their pot?"
http://www.statesmanjournal.com/sto...11/20/washington-colorado-track-pot/70013080/

 

[BigNoise]

Interesting.

So say, for example, you run a greenhouse with 150 plants. You would be issued a number for each plant. If an OLCC inspector came by and you had 180 plants (30 without a number), you're in trouble. Likewise, if they came by and you had 120, but the missing 30 had never been weighed and reported as sold to a licensed processor/retailer, trouble.

Am I on the right track?

Another theoretical: A guy gets into the game, grows for a couple season, but the market is flooded because everyone and his brother are growing, prices are $500 a unit or some such, so he decides to call it quits because it isn't worth the trouble anymore. If he has 50 lbs of unsold stock, does it have to be destroyed? Turned over to the state? Donated to a medical dispensary?

Obviously I don't expect you to know for sure, just wondering what your thoughts are.

 

[Beta Test Team]

Interesting.

So say, for example, you run a greenhouse with 150 plants. You would be issued a number for each plant. If an OLCC inspector came by and you had 180 plants (30 without a number), you're in trouble. Likewise, if they came by and you had 120, but the missing 30 had never been weighed and reported as sold to a licensed processor/retailer, trouble.

Am I on the right track?

Yup, spot on.

Another theoretical: A guy gets into the game, grows for a couple season, but the market is flooded because everyone and his brother are growing, prices are $500 a unit or some such, so he decides to call it quits because it isn't worth the trouble anymore. If he has 50 lbs of unsold stock, does it have to be destroyed? Turned over to the state? Donated to a medical dispensary?

Obviously I don't expect you to know for sure, just wondering what your thoughts are.

In that case, I think options include:
- selling at whatever price he can get in the recreational market.
- destroying the product.

One thing I am very highly surprised about is they're talking about letting product from the medical industry be sold into the recreational industry (though if that comes to pass I have serious doubts). So maybe it can go the other direction as well, rec. producers selling into the medical market. If so, then maybe he could donate to medical, and even get a tax write-off from the state (though again, I doubt that would be allowed).

I think what will end up happening is medical will get folded into rec. while keeping lots of things beneficial to medical (like low taxation, lower price per gram, etc.), like is happening in WA over 2015 and 2016. By 2016 all dispensaries will be shutdown in WA (most likely). Having two parallel yet unequal systems seems untenable.

I know up here in WA it has basically ruined the rec. market, but that's more due to the crazy high prices retail shops are charging (like $15 to $20 per gram!), and the taxes they're paying - medical is much cheaper here and way better quality. (Too many people got into the rec. as growers and have no clue what they're doing, producing low quality product but charging top-shelf prices.)

 

[BigNoise]

I'm anxious to see how it all shakes out, no matter which way. Hoping for the best.