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In a bureaucratic effort to control regulation and put a stop to black market weed created by “overproduction”, the Oregon Liquor Control Commission(OLCC) announced Wednesday it will temporarily pause approval of new recreational marijuana production applications. The OLCC licensing staff will shift focus to only process recreational marijuana license renewals and applications for recreational marijuana licenses received by June 15.

All applications for recreational cannabis submitted after June 15 will be delayed for processing until the OLCC processes outstanding applications and renewals in the queue. The OLCC made the announcement in a news release, the full text of which is below:

Since April 2016, the OLCC has issued almost 1,900 recreational marijuana licenses and almost 29,000 marijuana worker permits. The pace of application submissions has not slowed, and as a result, the licensing application process timeline has lengthened. 
The temporary suspension of new licenses reflects this extended review period currently experienced by applicants, and it will allow the OLCC to clear the application backlog and ensure ongoing oversight of the legal marijuana market.

 

Steve Marks, executive director of the Oregon Liquor Control Commission added, “In order to ensure that the OLCC is fulfilling its regulatory duties and providing timely responses to businesses in the industry, we must focus on the current participants in the system and preserve for the Oregon Legislature its consideration of the necessity for further statutory controls on marijuana licensing in 2019.”

To handle spikes in license and work permit applications, The OLCC has deployed staff from across the agency several times since the start of licensing. Over time, these spikes have become a consistent wave of applications, overwhelming the agency, reports say.

Aside from processing new license applications, the OLCC is required to service its existing licensees through license renewals and changes in business structure filings. The agency has learned during the first two years of licensing that it takes significant staff time and resources to complete marijuana license renewals.

The OLCC is responsible for compliance auditing and inspection of these grow sites using Cannabis Tracking System(CTS), Oregon’s program for registering and keeping tabs on grow sites and producers. Up to 2,000 OMMP grow sites are obligated to register with CTS by July 1.

The agency’s combined auditing of the state’s recreational and medical marijuana markets is expected to provide comprehensive oversight of legal cannabis production.  They are also putting additional resources into the field for compliance activity, with a focus targeting Oregon’s 2018 fall outdoor harvest.

“Public and consumer safety are guiding priorities for the OLCC and our work with regulators, law enforcement, and the marijuana industry,” said Marks. “The success of our regulated system will continue to rely on our cooperative effort to encourage legitimate participants in this system while deterring and shutting down illegal activity.”

While it is important to the legitimacy of the emerging cannabis industry to keep it regulated and legal, there may yet be undesired consequences. For example, we spoke with attorney Perry Salzhauer, who wonders how the decision will affect mergers and acquisitions in Oregon, as the OLCC treats those the same as new applications.

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