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OLCC’s Public Corruption Scandal: What This Means for Oregon’s Cannabis Industry

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On the heels of last week’s news that Governor Kotek had asked for and received the resignation of Oregon Liquor and Cannabis Commission Director Steve Marks comes a bombshell report by the Oregonian that OLCC senior management, including Marks, used their public positions for personal benefit by diverting rare liquors for themselves. Willamette Week also reported on Governor Kotek’s letter to OLCC Commissioners on the subject, concluding that the behavior of Marks and other senior OLCC management were “violations of our government ethics laws,” and urged the Commissioners to immediately remove those senior managers. Kotek clarified that she learned of the OLCC’s internal investigation only after she asked for Marks’ resignation, and also announced that she has asked the Oregon Department of Justice to conduct a civil investigation.

While the scandal appears at first glance to only impact OLCC’s behavior on the liquor side of their regulatory authority, there will be an immediate ripple effect on their cannabis licensing and enforcement program from the reduction in personnel alone. In addition, the DOJ investigation may well uncover more ethics violations, which could impact personnel on the cannabis side. This is an agency that has had its fits and starts but is now unquestionably in turmoil, which is not likely to end until the DOJ investigation wraps up several months from now. Cannabis licensees and applicants should be prepared to face delays in processing applications, change requests and the like.

In my opinion, this will not be the only shoe to drop, and the current scandal could likely be the tip of the iceberg. As I’ve documented before, OLCC management has a history of deceptive tactics when pressing for legislative changes. Senior management utilizing their position of public trust to benefit themselves and their personal interests is entirely consistent with how they have behaved across the board with regard to the cannabis industry. With new leadership, let’s hope OLCC takes a hard look at the mistakes of the past so they’re not repeated.

Kevin Jacoby Bottom Block