Long-time observers of the Oregon cannabis market were not surprised when the OLCC announced two weeks ago that it will be taking a break from the processing of new recreational marijuana license applications. There are almost 1,900 active recreational marijuana licenses and almost 1,500 pending applications. The OLCC is a small agency with limited staff resources. This announcement has been long expected.
After June 15th, 2018, the OLCC will set aside all new applications for all license types until the backlog of current license applications and renewals has been handled. Instead of processing new applications, the OLCC will redirect its limited staff resources to recreational marijuana license applications received by June 15th. Those interested in obtaining an OLCC recreational marijuana license have until this Friday, June 15th to submit an application to meet this deadline. Because there is no certainty on when, if ever, the OLCC will reverse this policy on processing new applications, it is highly recommended that any interested businesses submit an application for a recreational marijuana license by the June 15th deadline.
The OLCC online application system will still accept license applications after June 15th, but the applications will not be looked at by the OLCC in any way until the OLCC can reevaluate and decide on a policy for these new license applications. As far as we currently know, this June 15th cut-off date will create two groups of license applications: one group that will be processed in the same way as license applications have always been processed and one group whose fate is completely unknown.
Excessive work load was the immediate reason given for this abrupt change in policy. However, in addition to reasons related to excessive work load, OLCC Director Steve Marks was quoted in the announcement, saying that part of the rationale behind this policy change is to “preserve for the Oregon Legislature its consideration of the necessity for further statutory controls on marijuana licensing in 2019.” The OLCC has consistently held that it has no current authority to limit recreational marijuana licenses. However, it does have a statutory duty to report to the Oregon Legislature, by February 1 of each odd numbered year, on whether the supply of marijuana in this state is commensurate with the demand for marijuana in this state.
As the OLCC has previously announced, supply of marijuana in Oregon far exceeds the demand. Expect the 2019 biennial OLCC report to study this in detail. It would not be at all surprising if the legislature decided to take action in 2019 to limit recreational marijuana licenses in order to bring supply in line with demand. While the OLCC will not limit licenses, the legislature can, and it would not be surprising if they did. With this June 15th cut-off date, the OLCC has preserved the ability for the legislature to decide how to handle all license applications submitted after June 15th.
After June 15th the OLCC will focus exclusively on renewals and business changes for current licensees, already submitted recreational marijuana applications, and compliance and auditing for medical marijuana registrants required to start using Oregon’s Cannabis Tracking System. Licensees will still be able to accomplish all business changes that are currently available: changes in ownership, changes in location, and premises changes will all continue to be processed as per usual.