Earlier this week the Oregon Health Authority (OHA) issued a directive that no medical marijuana dispensaries were allowed to take in new marijuana extract inventory until licenses are issued to extract processors. There are currently no licenses, and the process to apply for a license doesn't even open until the beginning of next month. The OHA directive literally put people out of business overnight. My Facebook feed was completely full of sad stories about companies laying off employees and people scrambling to figure out what they were going to do.
I'm very happy to say that OHA has announced that it will allow provisional registration to Oregon extract companies that submit complete applications starting April 1. So extract companies can't start processing again today, but at least there is only a short wait. Below is an explanation of the change via the Oregon Cannabis Association:
The Oregon Health Authority has announced that beginning April 1, cannabis processors who submit completed applications for licensing through the OHA will be given a provisional registration that allows them to operate under OMMA rules until their licenses are approved. This means that extractors who follow the OHA's rules and submit completed applications on April 1 will be able to resume operations, and that dispensaries will be allowed to accept transfers of extracts from registered processors.
The bulletin from OHA reads:
A medical marijuana processing site that has submitted a complete application for registration with OHA is exempted from criminal liability pursuant to ORS 475B.475. The registration process with OHA opens on April 1, 2016.
The change was prompted by a letter from two Oregon legislators. Below is a copy of that letter, via Marijuana Politics:
March 23, 2016
Ms. Lynne Saxton
Director, Oregon Health Authority
500 Summer Street, NE
Salem, OR 97301-1097
Dear Director Saxton:
We are writing to express concern over the possibility of a gap in the production of cannabis extracts that could deprive patients of medicinal marijuana and undermine the viability of numerous Oregon small businesses. Specifically, we urge the Oregon Health Authority ("OHA") to find a path forward that would enable safe production of cannabis extracts to continue without undue interruption during the licensure start-up phase.
Background on the Problem
In 2015, the Oregon Legislature passed House Bill 3400, which directed the Oregon Health Authority to license and regulate medical processors of cannabis extracts, concentrates, and edibles. The Oregon Health Authority has been working hard to implement the various pieces of 3400.
The rule making process is still underway, and we understand there is currently no avenue available for licensing medical processors. We understand the opportunity to apply for licensure will begin on April 1st, 2016, and once an application is submitted, additional time will be required for inspections and review.
This situation creates a potential gap in the availability of cannabis extracts for medicinal use. HB 4014 Sec. 39 defines extraction without a license a class B felony. Since there is not yet a process defined in rule making for commercial extract makers to obtain licenses, we understand that many extractors plan to cease operations rather than risk criminal and administrative penalties. This could cause a gap in availability of extracts for medicinal use, and it could drive extract makers out of business.
This outcome would conflict with our legislative intent to provide a smooth transition into thenew regulatory system for medical marijuana patients and for small businesses operating in the legal cannabis space. It would also drive production and sales into the illegal market, conflicting with legislative intent to comply with the Cole Memo.
There may be a way to resolve this situation by providing a provisional license or some other kind of temporary safe harbor for commercial extract makers that have been operating in compliance with the rules. Oregon has in some instances allowed cannabis sector participants that have applied for permission to undertake an activity to engage in the activity on a temporary basis. The rationale for that approach---to avoid undue disruption to patients and businesses--- would be well-served here.
Oregon has allowed applicants to be considered rightful participants with respect to qualification as a "marijuana processing site" in ORS 475B.410(13). The statute defines "marijuana processing site" to include a site that has applied for registration. Similar logic allows Oregon Medical Marijuana Program cardholders to receive protection simply by retaining their certified application copies as part of their "safety packet." The same approach allows growers seeking an Oregon Liquor Control Commission license or a grandfather determination from OHA to have a provisional stay on plant limit reductions.
We encourage OHA to find a path forward---perhaps using this logic or some other basis---to ensure that rule abiding medical marijuana patients and extract makers are protected from a harmful disruption as we move into our new regulatory system. Thank you for your hard work to protect patients and communities as we evolve our state's approach to regulating legal cannabis.
Representative Ann Lininger
Co-chair, Joint Committee on Marijuana Legalization
Senator Ginny Burdick
Co-chair, Joint Committee on Marijuana Legalization
Oregon is home to some of the best extract makers on the planet. There are patients out there that need extracts because they need the potency. This is a very good move by OHA, and I'm happy that a enormous disaster was avoided. I don't know why OHA didn't have something like this in place to begin with, but I guess it's better late than never.