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OLCC Task Force Develops Legislative Proposals For 2023 on Water Rights, Cannabinoids, and Illegal Production

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An Oregon legislative task force established pursuant to HB 3000 (2021) and SB 1564 (2022) is developing policy proposals for 2023 relating to intoxicating cannabinoid products, illegal cannabis production, and water rights issues. The task force established subcommittees for each of the three issue areas, and this blog post will discuss the activities of each subcommittee and what legislative and regulatory changes are likely coming down the pipeline.

Cannabinoid Subcommittee

The subcommittee on cannabinoid products focuses on three issues: (1) new licensing and testing requirements for adult use cannabinoid products, (2) curtailing sales of cannabinoid products to minors, and (3) changes to state laws regulating hemp products.

This subcommittee is considering new licenses for the sale, wholesale, secondary processing, and export/import of “adult use cannabis items” that contain less than 0.3% THC. A representative of the Oregon Department of Agriculture (ODA) indicated that the agency already possesses rulemaking authority to require additional licensing, and the agency will likely soon begin rulemaking for secondary processing licensing. Hemp products from outside Oregon may be regulated under new secondary testing requirements, and products exported out of Oregon may need to include “handoff documents” so that businesses importing the products understand the content and testing results of the cannabis products. The handoff documents are proposed due to the absence of uniform testing and labeling requirements at the federal level under the 2018 Farm Bill.

As for preventing the sale of cannabinoid products to minors, HB 3000 already affirmed that only individuals aged 21 or over can purchase adult use cannabis items, unless the individual possesses a medical marijuana card and is over the age of 18. To ensure that stores are complying with this regulation, the subcommittee is recommending new statutory authority for OLCC to create a minor decoy program to test whether businesses are selling adult use cannabis items to persons under the age of 21.

Finally, regarding new regulations of hemp products, the task force is focusing on the fact that a hemp product can fall under 0.3% THC concentration threshold, but still contain enough THC per milligram to make the product intoxicating. Current regulation allows hemp edibles to contain up to 20 mg of THC per container and 100 mg for tinctures. The subcommittee therefore is considering new labelling requires to disclose total THC content, rather than just disclosing THC concentration. Additionally, METRC tracking requirements may soon apply to hemp and adult use cannabis items. ODA possesses authority pursuant to HB 3000 to establish tracking requirements, and a representative of the agency stated that rulemaking to require METRC tracking may begin soon.

Law Enforcement Subcommittee

The main topic for the law enforcement subcommittee centers on procedures and efficiency in executing search warrants. The first major consideration is amending ORS 133.575, which currently provides “(1) Except as provided in ORS 136.583, a search warrant may be executed only within the period and at the times authorized by the warrant and only by a police officer. A police officer charged with its execution may be accompanied by such other persons as may be reasonably necessary for the successful execution of the warrant with all practicable safety.” (Emphasis added by GLLG.)

The line “with all practicable safety” forbids non-law enforcement personnel, such as OLCC and ODA employees, from assisting police in execution of a search warrant unless law enforcement convinces the judge issuing the warrant that additional personnel are needed to ensure safety in executing the warrant. The task force subcommittee is considering statutory changes to remove the “with all practicable safety” requirement, as well as incorporating a non-exhaustive list of the type of agency and department personnel who can accompany law enforcement in executing a warrant.

A clear motivation behind the proposed statutory change is law enforcement’s desire for OLCC to accompany them in raiding cannabis grows so police can take advantage OLCC Lightlab testing machines. Our previous blog posts (Operation Table Rock I & II) discuss how OLCC and law enforcement used these machines last summer to malign many good actors in Oregon’s hemp industry. Relatedly, the subcommittee will likely recommend extending the January 1, 2024, sunset provision applicable to OLCC’s presumptive testing authority.

The other major development coming from the law enforcement subcommittee is a policy decision to increase the use of multijurisdictional search warrants to combat illegal grows working over multiple counties. ORS 133.545 allows most judges in Oregon to issue multijurisdictional warrants upon finding that at least one object of the search warrant relates to an offense committed or triable within the jurisdiction of the court issuing the warrant. Judicial resources are a central motive in expanding the use of multijurisdictional warrants. For example, if a marijuana conspiracy occurs in Portland but the actual grow operation is in a less funded rural county, a judge in Multnomah County can seek the warrant and thereby save the rural county’s scarce judicial resources.

Water Resources Subcommittee

HB 4061 (2022) created more stringent record keeping requirements for water suppliers and purchasers. The bill also created new crimes for individuals who haul water to illicit marijuana grows. Implementation of this legislation is a major focus of the water resources subcommittee, which is also considering changes to state law regarding water contaminates and site cleanup at illicit grows.

A representative of the Oregon Water Resource Department (WRD) stated in a subcommittee meeting that the agency is seeing registered water haulers exercising more caution when working with cannabis grows and WRD believes there is some decrease in the number of water haulers working with illicit grows. The agency believes there are still issues with unregistered water haulers working with illicit grow operators. Section 41 of HB 3000 created new criminal penalties for illicit cannabis production, and the water resources subcommittee is considering the addition of aggravating circumstances to increase penalties based upon the amount of water diversion or number of plants at an illegal grow operation.

Another proposed reform would require hemp and marijuana production license applicants to include proof of water rights or an agreement with a water hauler to provide water to the applicants proposed cannabis grow site. ODA license applications currently require an attestation regarding water use permitting. Other changes include increased license sanctions for water right violations, new criminal sanctions for illicit pesticide use, limitations on genetic engineering of cannabinoids, and new regulations to stop cross pollination of hemp and marijuana crops.

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