The ‘Big Pause’ continues

New cannabis businesses looking to open in Oregon have at least another 12 to 18 months to wait, according to Danica Hibpshman, statewide director of licensing at the Oregon Liquor Control Commission.

The OLCC, facing a long list of business applications and renewal applications from existing businesses, hit the pause button in June 2018, telling prospective cannabis business owners they wouldn’t be processing any new business applications until the understaffed agency could get caught up.

“Renewals are bogging down our system,” Hibpshman said. “Processing renewals can be as time-intensive as new licenses.”

Hibpshman and a handful of her colleagues from OLCC were on hand last week during the Cannabis Collaborative Conference at the Portland Expo to provide an update on licensing applications. The process has been stalled since June 16 due to an overwhelming number of applications and not enough staff to process them.

When “The Pause” was announced at the end of last May, OLCC anticipated a nine-month backlog for those who submitted an application on or prior to June 15. That estimate was dependent on how quickly OLCC could catch up with renewals and requests submitted by current licensees.

The statutory mandate to begin accepting applications for recreational marijuana licenses was Jan. 4, 2016. The original estimate was 800 to 1,000 licenses by the end of 2017. But by the end of 2016, Hibpshman said, they knew “it was going to exceed our expectations.”

In 2017, Hibpshman said, the agency’s resources were starting to dwindle and there was a rise in enforcement work, as well as an increase in licensees making changes to their business structure, which requires licensing approval. In 2018, application submissions continued to increase, she said, leading up to the pause.

In addition to an overworked staff at OLCC, Hibpshman said, Oregon’s cannabis industry was being hit by dropping prices, struggling cannabis businesses, more consolidation and transfer of ownership, as well as an increase in new investment money. This all led the agency to decide it needed to focus its resources on existing licensees with issues rather than assigning investigators to new license applicants.

That pause window was originally going to last a couple of weeks, and 1,000 new applications were submitted during that initial two-week window in June, Hibpshman said.

“We are still in that pause,” she said, adding that at the end of 2018, there were 2,100 active licenses in the state — including 1,100 producers and 600 retailers. “More licenses than any other legal state,” she added.

Will Higlin, deputy director at the OLCC, told conference attendees that some workers in the agency’s alcohol division are switching over to the marijuana division.

When OLCC first started regulating cannabis, employees in the alcohol division didn’t want to have anything to do with the marijuana side. Now, he says, when a job posts, it’s a different story.
“Now alcohol people want to move over into marijuana,” Higlin said.

Higlin acknowledged that many people didn’t want the OLCC to be in charge of cannabis. “We’re not the big bad wolf,” he said of the agency’s philosophy regarding marijuana regulation. “We want to start with education, be transparent. We want the industry to be successful. It’s our job to provide service. Within the regulatory sandbox, we can be as flexible as possible without breaking laws and rules.”

That said, the agency is still learning and changing, Higlin said, adding that every time there is a regulatory development, OLCC has to update its systems and licensing process, which is a strain on resources.

Jamie Dickinson, OLCC’s packaging specialist, gave an update at the CCC on packaging and labeling rules. The first person in the position, she was charged with reviewing all of the packaging and labels of every single cannabis product.

“We do all of them,” she said. “There is one person who handles all the applications.”

Dickinson said the department developed rules by setting up a committee in 2015 and visiting medical marijuana dispensaries around the state to see what was being used. OLCC eventually developed a compilation of approved packaging types, she said.

“We want to make sure it’s easy for all licensees to comply and that everyone knows what the actual rules are,” Dickinson said, adding that she’s been “very happy” with the packaging and labeling she’s seen — though there is room for improvement.

“Sometimes at retail stores they don’t use child-resistant packages as much as they should,” she said. “That’s a violation. That’s a big deal.”

In terms of exit bags, which can be an expensive requirement for dispensary owners, Dickinson said, “if everything in your retail shop already came child-proof, you don’t need child-resistant bags.”

You can follow Liz Gold on Twitter/Instagram @lizstacygold or read her blog at www.14karatliving.com.

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