As we wrote recently, 2020 was a notable year for the Oregon cannabis industry for a number of reasons, including COVID-19 and raging forest fires. This post ties in with the “State of the State” and is a sister post to our Californian cannabis: What to look out for in 2021.
OLCC enforcement: Although the OLCC shifted towards a less punitive approach to enforcing rule violations for at least a few rules in 2020, licensees shouldn’t expect a sudden turnaround for many violations. The rules give the OLCC and its case officers pursuing non-compliance with a high degree of discretion in enforcement and resolution. In another case, the result may not mean much. This uneven application of the rules continues to pose significant risks for licensees who may take action against a particularly aggressive case moderator who interprets the rules strictly and narrowly. However, penalties and settlements for certain types of violations (e.g., sales to medical patients over the limit) have come together in reasonably predictable patterns, based on the established settlements that the OLCC has closed in recent months. We will observe how the new VOC program affects the workload of investigators and case officers, and whether the reduced workload means increased scrutiny of licensees and how this may affect the OLCC’s willingness to resolve matters.
Changes to the OLCC rules: The rules will evolve. In December 2020, the OLCC banned certain additives from cannabis vaping products (the press release is here), and the OLCC met to consider adopting rules to streamline marijuana licensing (the draft rules can be found here). One issue we’ll be watching closely is how and when the OLCC changes the rules it passed when COVID-19 first raged through the state, such as easing roadside delivery and collection rules and increasing them the amount of flowers available to OMMP cardholders. While we don’t expect this to change anytime soon, given the spread of COVID-19 in Oregon, this is something you should keep an eye on.
Marijuana litigation: As the Oregon marijuana industry has matured, so has litigation. In the early years, litigation tended to involve jerky investors (see hemp!) Claiming fraud or waste in connection with their investment in the “green rush”. As in 2020, we expect marijuana litigation in 2021 to include partnership disputes, minority acquisitions, and litigation related to the purchase and sale of licensed manufacturing, retailing, and processing companies and their assets.
Hemp litigation: Hemp Litigation in 2021 Oregon is very similar to the marijuana litigation several years ago. The hemp production businesses are failing left and right thanks to the combination of the FDAs dragging CBD, the steep drop in prices, and unscrupulous operators taking advantage of investors who poured money into hemp with little to no experience. A big question for potential plaintiff investors is whether there is money that can be reclaimed, and if there is hemp, how and when to convert it to cash to reduce losses.