Tuesday nights Q&A Town Hall Meeting put together by The Oregon Cannabis Association caused quite a stir in the Oregon Cannabis Industry. Although there were a lot of really really important takeaways, none is bigger than what has disrupted the business of extraction. The Oregon Department of Justice and OHA are interpreting a new law intended to curb home production of extracts to mean that all unlicensed extraction is a Class B Felony, and growers and dispensaries doing business with unlicensed extractors are potentially aiding and abetting this criminal activity and may be subject to criminal or civil penalties, including loss of license. This is HUGE…and well a growing pain. One cannot knock OHA and the powers that be for putting a foot down on operations that are dangerous. Too many times do stories pop up about a house exploding because of open blasting. This is intended to get rid of operations that are not sound, and allow for stable processing companies to flourish.
Never the less, it is important for every OMMP patient, dispensary, and company making product to stay informed and with the latest information. We were on hand to video tape the entire session. YOu can find the videos at these links:
Below you will find a transcript of the Q&A with André Ourso, Marijuana Program Manager, Oregon Health Authority and Amy Margolis, Oregon Cannabi Association.
OCA: How many mature plants can a medical grow site have under the new limits, and are the limits different for residential locations in the city versus industrial and farm use?
OHA: Inside city limits in an area zoned residential, 12 mature plants. Inside city limits but not in a residential zone, or outside city limits, 48 mature plants.
OCA: When do these limits go into effect, and is there a difference between when the statute says they do and the grace period OHA has created?
OHA: The plant limits went into effect on March 1, under House Bill 3400. Senate Bill 1511, passed this session but not yet signed by the Governor push that date back to April 1, 2016. But again, as of now, the plant limits are in effect.
OCA: How will OHA be enforcing those limits? How do tracking and enforcement differ for people growing at home and under 12 plants?
OHA: If OHA inspects a grow site and finds more plants than are permitted, growers could have their cards revoked. OHA will only be inspecting grow sites if there are more than 12 plants permitted to be grown at an address, or grow sites whether the grower is not growing at the patient’s residence.
OCA: Will inspections be random or scheduled?
OHA: OHA is limited in scope regarding what is inspected at grow sites. Primarily, OHA is looking at plant counts and patient/grower’s cards at each site. At this point, inspections are complaint driven. Eventually, there will be random inspections, but we may base inspections off of audits of the monthly reports, looking at compliance and consistency with plant counts and the amount of marijuana produced that is reported to OHA.
OCA: What will you do with the information collected from the tracking/reporting system?
OHA: The information collected is primarily to ensure OHA’s compliance with federal guidelines in the Cole memorandum. That memo advises states to have a robust regulatory system and to control black market diversion. In addition, generally the information will be analyzed and used to inform policymakers in the Legislature and executive agency about the state of the program. We will look for trends and patterns on the amount of medical marijuana in the state and how supply and inventory may affect the market and industry and what patients have access to. The data will also assist the agency in responses to public safety issues, such as the ability to recall an adulterated or dangerous product.
OCA: The Legislature created a stay for those who applied for OLCC licenses. What will a grower be required to do to qualify for that stay?
OHA: The stay provision is in SB 1511, and that bill has not yet been signed. Assuming that will be signed, a grower will have to file a notice with OHA that includes:
• The names and signatures of all the growers at a grow site address attesting that they all consent to being licensed by OLCC and that an application was filed with OLCC by April 1.
• All the names of the patients for whom marijuana is being produced at the address.
• Proof that all patients were sent a notice by certified mail that describes the patient’s rights to the plants and usable marijuana and that once licensed the patient’s rights will terminate.
OCA: Many growers expect to be grandfathered in under the bigger plant limits. What are the qualifications for grandfathering, and when are those forms due?
OHA: There is no due date for submitting a grandfathering petition, but a grower is subject to enforcement of the lower plant limits if the address is not grandfathered. The specific information that is required for a petition is in our rules, OAR 333-008-0050, and there is a form on our website. Basically, in order to be grandfathered, all growers at a particular address must have been growing at the address continuously since December 31, 2014.
OCA: What happens to patients when a grower gets their OLCC license? Can they keep their cards?
OHA: A patient cannot designate an address that is licensed by OLCC as a marijuana grow site. If a grower gets licensed by OLCC, or more specifically, if a grow site address is licensed by OLCC, OHA will notify the patients at that address that if they want to designate another grow site, they can. But the current grower and grow site are terminated. There is a provision in SB 1511 that would allow an OLCC licensee to serve medical marijuana patients, and OLCC will be adopting rules to implement that new law when SB 1511 becomes law.
OCA: Are you going to require water rights, security and land use compatibility statements for growers?
OHA: Growers are not required to submit a land use compatibility statement. Growers have to comply with Oregon water law, which means they have to have a water right, have water supplied from a water provider that has a legal water right, or use water in a manner that is exempt from the water right requirements. There are few exceptions from the water rights requirements if marijuana produced at a grow site is being transferred and sold to processing sites or dispensaries. Growers have to keep marijuana out of the public view – that is the only security requirement.
OCA: Under the new rules and in statutory language, there are three primary terms for processed material: extracts, concentrates and cannabinoid product. What are those products?
OHA: These terms have all been defined in statute: ORS 475B.410.
• An extract is a substance obtained by separating cannabinoids from marijuana through a hydrocarbon-based solvent like butane or propane, or by using high heat or pressure. A concentrate is a substance made through a solvent such as vegetable glycerin or vegetable oil, using a process that does not involve high heat or pressure, or using mechanical processes.
• A cannabinoid product includes edible and topicals -– basically anything that contains cannabis that is not usable marijuana itself, or a concentrate or extract itself.
Also, in OHA’s rules, a person may only process and transfer cannabinoid products, concentrates or extracts if the processor has received an endorsement from OHA for that type of processing activity. OHA’s endorsement types are:
(a) cannabinoid edible processor;
(b) cannabinoid topical processor;
(c) cannabinoid concentrate processor;
(d) cannabinoid extract processor; and
(e) cannabinoid tincture, capsule, suppository, or transdermal patch processor
OCA: OHA has created a registration/licensing process for processors. Do these processes differ based on the three types discussed above?
OHA: Yes. The rules are different for applicants making extracts, concentrates and products. Extract makers have specific building and equipment requirements that will need to be inspected. Edible processors have to meet requirements for a commercial kitchen through the Oregon Department of Agriculture, for example. Applicants should review OHA’s rules carefully.
OCA: Are there more serious criminal consequences for processing extracts without a license than concentrates or topical products?
OHA: Processing extracts is a crime unless you are registered by OHA or licensed by OLCC.
OCA: We know that processors, if they intend to sell to a medical dispensary, will need a medical license/registration. When will applications be available for those?
OHA: Processors can begin to apply on April 1.
OCA: After an application is submitted, what will the licensing process be like? Will there be inspections, and will there be differences among the sub-categories of processors?
OHA: The registration process will be similar to the registration process for a dispensary. The rules outline a set of requirements that need to be met and timeframes associated with meeting them. An applicant applies and submits docs related to the processing site, a general location description of the site, a list of owners and PRPs (person responsible for a processing site) so a background check may be run on them. Multiple PRPs can be named, but one must be designated as the primary. After the initial criteria is met, the applicant will be notified and given 30 days to submit additional information, which includes a floor plan and documentation showing lawful possession of the site. If insufficient or incomplete documentation is received, the applicant will have 10 calendar days to provide the additional documentation or the application will be returned as incomplete. Once complete information is received, the primary PRP will receive notice that they have 60 days from the date to submit a readiness form. An applicant may request an extension of the 60-day deadline if they can demonstrate that the deadline cannot be met for reasons outside the applicant’s control, such as the inability to obtain building permits.
OCA: When is the due date for these licenses?
OHA: Anyone can apply anytime after April 1. There is no closing date.
OCA: It looks like October 1 is the last date for dispensaries to accept product from unlicensed processors. Is that right?
OHA: Yes. Starting October 1, 2016, all products transferred to a dispensary must come from a registered processing site.
OCA: What happens in between now and Oct. 1 from an enforcement perspective?
OHA: OHA will not be taking any actions against anyone who is not registered as a processor between now and Oct. 1. However, a dispensary could be disciplined for accepting an extract from an unregistered processor.
OCA: Everyone is interested in knowing what the serving size and concentration limits will be for both medical and adult use. When will we know so people can start to plan?
OHA: OHA will post its draft permanent rules for concentration limits, labeling and testing for public comment by April 15. Those rules will go into effect by June 28. It is unlikely that the draft permanent rules that are posted will change much between April 15 and June 28. Bottom line: by June 28, the rules governing concentration limits will be set.
OCA: Can you talk about some of the more specific requirements for getting a license for extraction, like spark-proof rooms?
OHA: Other than needing to meet all the general requirements, extraction processors do have a set of specific requirements that must be met.
• Extractions must be processed in a fully enclosed room that is spark proof and equipped with evacuation fans and lower explosive limit detectors.
• Extraction processors must use commercially manufactured, professional-grade, closed loop extraction systems designed to recover the solvents and built to recognized and generally accepted good engineering standards.
• The equipment and facility must be approved for use by the local fire code official; meet any fire, safety and building code requirements; have an emergency eye-wash station in any room in which extraction is being processed; and have all applicable material safety data sheets available.
OCA: Is there a Land Use Compatibility Statement (LUCS) requirement for processors?
OHA: OHA is asking for a LUCS or similar document for informational purposes, but getting land use approval from a local government is not a condition of registration.
OCA: Do any of these new rules impact dispensaries?
OHA: Yes, though many of the requirements are the same and the rules have just been reorganized. There are no inventory reporting requirements beginning June 1.
OCA: There are new dispensary reporting requirements; what are those, and when do they go into effect?
OHA: The first set of reporting will be required by April 10 for dispensaries that participate in early retail sales. The report due on April 10 will include the sales from retail customers. Detailed information about this will be sent out to dispensaries in the next week. Dispensaries are required to report to OHA starting June 1. They have to report the amount and type of marijuana items transferred to and from dispensaries within the last month. The reporting is not on a per-transaction basis but is in aggregate for the month. For example, the total amount or number of cannabinoid edibles transferred by a processing site during the past month would have to be reported.
OCA: There are also new testing requirements. When do those go into effect, what should dispensaries do with product that was tested under the old process, and how does that affect intake?
OHA: The permanent testing rules will go into effect in late June, and growers, processors and dispensaries must comply with the new testing rules by October 1. If, after Oct. 1, 2016, a dispensary has products that were not tested under the new rules, it can still transfer those products to patients or caregivers, but they have to be marked as “NOT TESTED UNDER THE NEW RULES.”
OCA: Dispensaries have new limits on the amount of product they can sell; what are those new limits?
• 24 ounces of usable marijuana;
• 16 ounces of a medical cannabinoid product in solid form;
• 72 ounces of a medical cannabinoid product in liquid form;
• 16 ounces of a cannabinoid concentrate, whether sold alone or contained in an inhalant delivery system;
• 5 grams of a cannabinoid extract, whether sold alone or contained in an inhalant deliverysystem;
• 4 immature marijuana plants; and
• 50 seeds.
OCA: It looks like there are new timelines and additional rules for renewals of dispensary licenses. What are those, and what are the new pieces?
OHA: A dispensary needs to apply for renewal not more than 90 but at least 60 days before the registration expires. If a dispensary doesn’t comply with that deadline, it could be subject to civil penalties. A dispensary absolutely has to reapply before the registration expires or the dispensary
will have to file a new application.
OCA: What is the best, most effective way to communicate with OHA? Where can dispensaries go for answers to questions that need a relatively quick turnaround?
OHA: 855-244-9580 (Monday-Friday, 11 a.m. to 4 p.m.) or email: medmj.dispensaries@state.
OCA: If a dispensary wants to sell edibles, does it need a separate license? When does that go into effect?
OHA: On and after October 1, 2016, a dispensary selling edibles has to be licensed by the Oregon Department of Agriculture as a retail food store.
OCA: When will dispensaries know exactly what the new packaging and labeling requirements are?
OHA: OHA will post draft permanent rules for concentration limits, labeling and testing for public comment by April 15. Those rules will go into effect by June 28, 2016. It is unlikely that the draft permanent rules that are posted now will change much between April 15 and June 28. Bottom line: by June 28, the rules governing labeling will be set. OLCC is establishing the packaging rules, and it also will have permanent packaging rules in effect by June 28.
OCA: May dispensaries sell hemp products?
OHA: Right now, a dispensary can sell a hemp product if the product is not intended for human application, consumption, inhalation, ingestion or absorption. There was legislation passed this session that may require OHA to amend its rules concerning industrial hemp products.
OCA: We know there is a LUCS requirement for dispensaries now. Many local jurisdictions are making it difficult or taking significant periods of time to get people their LUCS. Will I have to shut down while I wait for my local government to do something?
OHA: No. OHA is not going to take action against a dispensary because they haven’t submitted a LUCS.