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Welcome Jon Norling

Emerge Law Group welcomes attorney Jon Norling to the firm’s Business/Corporate Law Practice Group!

Jon is a corporate lawyer with a practice focused on the development and financing of business ventures.  He represents emerging growth companies on business and commercial matters including project development and finance. He has significant experience advising clients with respect to corporate governance, regulatory compliance, securities matters, entity formation, structured finance, and renewable energy and real estate project development matters.

Prior to joining Emerge Law Group, Jon was a partner at Cleantech Law Partners and was formerly chair of the energy practice group at Lane Powell P.C. He also previously served as general counsel for several solar and wind energy development companies.

You can reach Jon through any Emerge Law Group attorney or directly by phone at 503-227-4525 or by e-mail at jon@emergelawgroup.com.

Welcome Jon!

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sadness

Unfortunately the hope that the October 1, 2016 deadlines would be pushed back did not occur.  The Oregon Health Authority (OHA) and Oregon Liquor Control Commission (OLCC) both adopted emergency temporary rules today.  However, the changes appear to provide very limited relief for Oregon cannabis businesses.

Labeling and Packaging

Inventory taken in prior to October 1, 2016 must be sold with labels and packaging that meet the new standards, but are not required to have gone through the OLCC pre-approval process.  Inventory taken in by a dispensary on and after October 1, 2016 must have pre-approved labels and packaging.

The text of OHA’s temporary rules can be found here.

Testing

There is a reduced requirement for testing of pesticides on usable marijuana only.  Prior to September 30, 2016 changes, the rule was that every batch of usable marijuana in a harvest lot had to be tested for pesticides.  Under the temporary rule, only a percentage of batches in a harvest lot will need to be tested for pesticides.  The OLCC will issue an order periodically dictating the percentages of batches requiring testing.  At the special Commission meeting today, Steve Marks indicated that 33% of batches in each harvest lot would be the initial testing percentage.  These percentages will likely be increased.  This reduced testing would only be permitted until March 1, 2017.

We will post a follow-up blog with more details.  Please feel free to contact us to discuss how this may impact your particular situation.

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October1

The Oregon Health Authority (OHA) has announced that it will engage in temporary emergency rulemaking this week to address two key issues which may affect current medical marijuana businesses preparing for October 1, 2016.

1. Pending OHA Processor Registrations

The OHA has confirmed that it intends to adopt a temporary emergency rule that would allow applicants who have applied for a medical marijuana processor registration to continue operating without interruption under a pending registration status.  The expectation is that OHA dispensaries will be able to accept products from processors that are included on the list of Pending Processor Applications.  Under current rules, processors are required to complete their registration on or before October 1, which involves an OHA readiness inspection.  However, with less than a month until October 1, no processors have yet completed a full registration.

In order to get on the list of Pending Processor Applications, a processor must submit a “complete” application to the OHA.  If the OHA has deemed a processor application “complete,” it will place the applicant on the list. Beginning October 1, OHA dispensaries must only accept edibles, concentrates, and extracts from processors on the list.

In a previous blog post we summarized the processor registration requirements.  The OHA reviews applications for completeness once per week, in the order they are received. To avoid any business interruption, processors should still submit their applications as soon as possible.

2. Extended Deadline for Dispensary ODA Certification

OHA also announced that it intends to push back the date by which registered dispensaries must have a food establishment license from the Oregon Department of Agriculture (ODA), from October 1, 2016 to January 1, 2017.  Stay tuned for an upcoming blog post on working with ODA.  Also, in case you missed it, we posted our Top 5 tips for Oregon dispensaries gearing up for October 1.

We will also continue to publish blog posts to update you on key issues and changes affecting Oregon’s marijuana industry.

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Emerge Law Group is excited to offer the free Employment Law Compliance for Cannabis Employers class on September 28, 2016 in Portland from 9:30 a.m. to 3:00 p.m., with free lunch provided.

Our experts will guide you through the fundamentals that every employer must follow to fully comply with the mountains of Oregon and federal employment laws, including:

  • Employees vs. independent contractors
  • Exempt vs. nonexempt employees
  • Marijuana worker’s permits
  • Forms I-9, W-2, W-4, W-9, 1099, etc.
  • Salary, hourly and piece rate compensation
  • Workweeks, paydays, final paychecks and other payroll fundamentals
  • Workers’ compensation and OHSA compliance
  • Must-have employment policies
  • And much, much more!

You will also have an opportunity to ask the questions that matter most to you. Register online today.

More details can be found here.

Space is limited, so early registration is recommended. We look forward to seeing you!

REGISTER ONLINE at http://emergeclassregistration.eventbrite.com.

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Number-5

There are significant changes to the Oregon Medical Marijuana Program that will take effect on October 1, 2016.  In recent blogs we have covered:  (1) labeling; (2) packaging; and (3) processor registration. What do these changes mean for Oregon dispensaries?  Below are a few tips for dispensaries preparing for the upcoming rule changes.

1. Identify your top-selling products.                      

If you own or run a dispensary, evaluate your sales history and identify your top-selling products. By focusing on your main sources of revenue, you can hopefully prevent significant disruption to your inventory supply and cash flow.

2. Evaluate whether your top-selling products currently comply with October 1 labeling and packaging requirements.

Once you identify your top-selling products, evaluate whether those products meet the new packaging and labeling requirements. The sale of marijuana flowers and other items in exit packaging may not be affected.  However, the sale of concentrates, extracts, edibles, and other infused products that are generally delivered to dispensaries pre-packaged and labeled will most likely be impacted.

Current Inventory

On and after October 1, if a dispensary has a product in inventory that does not meet the new labeling  requirements, under OAR 333-007-0010(5) the dispensary will be required to:

  • transfer/return the non-compliant item; or
  • if the item cannot be returned – for example, if the vendor cannot be located – dispose of the item in a manner specified by the OHA.

Future Inventory

On and after October 1, a dispensary may not accept any products that do not meet the new labeling and packaging requirements. Ask your vendors that supply pre-packaged and labeled products whether their products comply with the new labeling and packaging requirements. The OLCC has told us that relatively few labels have been submitted for pre-approval. With only one exception (which is explained below), all labels must be pre-approved by the OLCC. If you anticipate a potential disruption in inventory supply, try locating vendors who will likely be compliant by October 1.

Generic Labels

A label that provides only the necessary information required by the rules – and no graphics, photographs, or logos – is considered a “generic” label and requires no pre-approval by the OLCC. You are not required to provide notice to OLCC that you will use a generic label. Consider whether use of generic labels could be a temporary solution.

3. Talk to your extract, concentrate, and edible suppliers about the status of their OHA registration.

On and after October 1, a registered dispensary may accept only a transfer of edibles, concentrates, or extracts from an OHA-registered medical marijuana processing site. Ask your processor vendors about the status of their OHA registration. You can also continue to check the OHA Pending Processor list.

The rules do not prohibit sales of edibles and concentrates that were taken into inventory from a non-registered processor prior to October 1, or extracts that were taken into inventory from a non-registered processor prior to March 1, 2016. Dispensaries may consider purchasing edibles and concentrates from non-registered processors prior to October 1. In contrast, at this time all extracts must come from processors on the OHA Pending Processor list. Regardless of how this rule affects you, if a product in your inventory does not meet the new labeling and packaging requirements, you may not sell it to a consumer (see above).

4. Testing

Beginning October 1, a dispensary may not accept or sell a marijuana product that has not been tested by a laboratory accredited by ORELAP and licensed by OLCC (with one exception explained below). A list of accredited and licensed laboratories will be made available on the OMMP laboratories web page. Currently, no such labs are listed but the OLCC announced today that the first two labs have been certified and licensed.

With respect to inventory accepted by a dispensary prior to October 1, a dispensary may transfer such marijuana items to a patient or caregiver until January 1, 2017 if the item is labeled with the words “DOES NOT MEET NEW TESTING REQUIREMENTS.” These words must be bold, in all capital letters, and at least 12 point font, and the label must be easily seen by the patient or caregiver. We also read this mean that recreational customers may only be sold items tested under the new rules, but we to confirm this with OHA.

Given the current number of accredited and licensed labs, dispensaries should plan their inventory purchases accordingly.  In addition, we recommend affixing the necessary disclaimer labels well before October 1.

5. Do You Need an ODA License?

On and after October 1, a dispensary that sells or handles edibles must be licensed by the Oregon Department of Agriculture (ODA). Check our blog later this week for more information on the ODA’s licensing process.

If you have any questions or concerns about what to do with marijuana items that do not comply with packaging or labeling requirements or about our tips, please do not hesitate to contact a compliance attorney. We are here to help.

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register

On and after October 1, 2016, ALL medical marijuana processors must be registered with the Oregon Health Authority (OHA) in order to sell processed marijuana items to a dispensary. This includes processors making concentrates, extracts, and edibles and other infused products. Many extractors have already initiated the registration process and are on the pending processors list. However, according to OHA rules, even these applicants must complete their registration – which includes an OHA readiness inspection – to continue selling their products on and after October 1, 2016.

Technically a processor on the pending processors list holds a provisional OHA license.  The hope is that OHA will continue the provisional license approach with respect to the October 1 deadline.  However, the OHA has not confirmed that it will in fact do so. Stay tuned to our blog for updates. If you are such a processor and have not begun the registration process, it would be prudent to do so as soon as possible.

In the meantime, processors and dispensaries should make plans regarding inventory. We have also summarized the application process below:

1. Create an account.
– Use https://ommpsystem.oregon.gov/ to create an account and submit an application.
– When you complete the online application, you will receive your MMPS number. Write this number on all forms and documentation that you send to the OHA.

2. Pay the registration fee.
Use https://ommpsystem.oregon.gov/ to pay your registration fee.
– The full $4,000 registration fee is due at the time you file your application.
– If your application is denied, or returned as incomplete, you will be refunded the full amount minus a $500 application fee.

You then have 30 days from the date that OHA acknowledges receipt of your application to upload, or mail in, the following supporting documentation.

3. Upload your supporting documentation.
Use https://ommpsystem.oregon.gov/ to upload all supporting documentation.
– You must submit the following:

  • Proof that the business applicant is registered with Oregon’s Secretary of State, as well as registration for any assumed business name that will be used
  • A site plan to scale
  • A floor plan to scale
  • Proof of lawful possession of the property to be licensed
  • A description of the products to be processed, with a request for endorsements, on the OHA processor endorsement form
  • An Individual History Form for each owner and Person Responsible (PRP)
  • A copy of government-issued photo identification for each owner and PRP
  • Extract processors must submit written proof from their local government that the proposed location is not located in a residential zone

4. Submit your background check documents.
For each person listed on the application, complete and obtain the following:

Mail both items to the following address:
PO Box 14870
Salem, OR 97309-5066
DHS/OHA Background Check Unit.

– Submit payment for your background check(s).  Issue a $35 check or money order, payable to the “Oregon Health Authority,” for each individual listed on the application.

Mail each check or money order to the following address:
PO Box 14116
Portland, OR 97293-0116
OMMP Dispensary and Processor Unit

The OHA reviews applications for completeness once per week, in the order they are received. Once your application is deemed “complete,” the OHA will list your processing site on the Pending Processor Applications page. Once the OHA determines that you meet the initial application criteria, it will require you to submit a Notification of Processing Site Readiness form within 60 days. Finally, OHA staff will perform an inspection of your premises, and if the results are satisfactory, it will issue you a processing site registration certificate.

Please contact one of our compliance attorneys if you would like assistance with this process.

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Many people have been asking about what to do if their container is too small to fit all of the required label information. Think tinctures, single-serving shots, or small edibles. Fortunately, the OLCC and OHA heard these concerns and created special rules for small containers. If your container is too small to include all required label information, you may now use additional packaging for display purposes to include this required information.

Minimum Information on Small Container

The container actually holding the marijuana item must contain:

  • Information in a minimum 8-point font, Arial, Helvetica, or Times New Roman;
  • A principal display panel containing required information (product identity, universal symbol, net weight) if required for the type of marijuana item;
  • Business or trade name and licensee or registrant number;
  • For OLCC licensees, package unique identification number;
  • For OHA registrants, batch or process lot number;
  • Concentration of THC and CBD; and
  • Required warnings.

Additional Information

All other required information must be included on:

  • a leaflet or hangtag that will accompany the marijuana item; or
  • an outer package.

If an outer package is used, all required information must be listed on the outer packaging, even if some of it has been included on the inner container.  In other words, outer packaging must have a full label.

Check back next week for more updates, including details on the registration procedure for OHA processors, what to do with unsold dispensary inventory on October 1st, and more!

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If you are an Oregon marijuana business owner, you will need to ensure compliance with not only new labeling rules, but also new packaging rules. The general rule to remember is that all marijuana items must comply with these packaging rules at retail sale to the end consumer. This rule applies to OLCC licensees immediately, and OHA registrants on and after October 1, 2016.

OLCC retailers and OHA-registered dispensaries will want to pay particular attention to the new packaging rules as they are ultimately responsible for ensuring that marijuana items leaving their businesses are properly packaged. With that said, any marijuana business that wants its product to be sold to consumers in their own packaging – without first being placed in “exit packaging” (which is explained below) – will also need to ensure that their products are properly packaged.

Pre-Approval

All packaging must be “pre-approved” by the OLCC. Both OLCC licensees and OHA registrants can pursue packaging pre-approval through the OLCC’s licensing portal (this is the same method used to obtain labeling pre-approval).

The OLCC will publish a list of pre-approved packaging. Any OLCC licensee or OHA registrant may use pre-approved packaging without first seeking permission from the OLCC. If you plan to use a pre-approved package from this list, be aware that:

  • the OLCC has not yet published the list;
  • once the OLCC does publish the list, there is no guarantee that the packaging you plan to use will be on the list; and
  • if you plan to use pre-approved packaging, but of a different size or color than is specified on the list, you may not use that packaging without first obtaining pre-approval from the OLCC.

General Requirements for Packaging

The general rule is that packaging used in retail sales to end consumers must:

  • protect marijuana items from contamination or exposure to toxic and harmful substances;
  • not be attractive to minors; and
  • be child-resistant.

There are three types of child-resistant packaging:

      1. Single Use. This packaging loses its child-resistance once opened; it may be used for usable marijuana (dried flower), single-serving edibles, single-serving topicals, single-serving concentrates, and single-serving extracts. singleusepackage
      2. Continual Use. This packaging maintains its child-resistance throughout the life of the marijuana item within; it may be used for usable marijuana, edibles, topicals, concentrates and extracts. continualusepackage
      3. Exit Packaging. This packaging can be used at the point of sale to enclose non-child resistant packaging. Use of exit packaging ensures that the sale to the end consumer complies with the new packaging rules. exitpackaging

For a complete list of packaging requirements and restrictions, see Oregon Administrative Rules 845-025-7000 to 845-025-7060.

Exception to the Child-Resistance Rule

Packaging does not need to be child-resistant if the product being sold is a marijuana seed or immature marijuana plant. Regardless of this exception, all packaging – including non-child resistant packaging and exit packaging – must be pre-approved by the OLCC.

Transportation Packaging

An additional rule applies to all transfers of marijuana items among OLCC licensees. In short, these transfers must use shipping containers and must be labeled with a UID tag prior to transport. For a complete list of requirements and restrictions applicable to these transfers, see Oregon Administrative Rule 845-025-7700.

For more information, please visit the OLCC’s page for packaging and labeling pre-approval. There you will find links to guides, workshop presentations, and frequently asked questions. If you have further questions, please contact one of our compliance attorneys and we will be happy to assist you with your packaging or other needs.

Tune in tomorrow for information on how small packages (e.g., 5ml plastic screw top containers) can comply with the new packaging and labeling rules.

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Whether you are involved in the medical or recreational side of the Oregon cannabis industry, you will likely be required to comply with new labeling regulations on and after October 1, 2016. These regulations, contained in Oregon Administrative Rule 333-007-0010 to 333-007-0100, apply to all recreational licensees at all times during licensure, and most medical registrants. These labeling requirements do not apply to you if you are:

  • A grower providing usable marijuana or an immature plant to a patient who designated you as their grower or to the caregiver of a patient who designated you as their grower; or
  • A designated caregiver who is transferring a marijuana item to the patient who designated you as their caregiver

Generic Labels

A label that provides only the necessary information required by the rules, and no graphics, photographs, or logos, is considered a “generic” label and requires no pre-approval. You are not required to provide notice to OLCC that you will be using a generic label.

Pre-Approved Labels

All other labels require pre-approval from OLCC before they may be placed on a marijuana item. OLCC licensees and OHA registrants may submit labels for pre-approval through the OLCC’s licensing portal. Although not ideal, if you are unable to obtain pre-approval prior to October 1, 2016, you may use a generic label until you are pre-approved. Going forward, certain label information may be changed without the need for a new pre-approval. The OLCC has been working on detailing what label information this applies to (e.g. strain, net weight, test results, etc.). We will update you as we learn more.

General Requirements for Labels

A container holding a marijuana item must have a principal display panel (PDP) that provides:

  • The product’s identity;
  • The universal marijuana symbol at a minimum size of .48” x .35 inches; universalsymbol
  • If applicable, the medical grade symbol at a minimum diameter of .35 inches; and medicalsymbol
  • Net weight in US Customary and metric units.

Labels must:

Pictograms may be used in place of written label information where appropriate, such as for activation time.  activationpictogram

Specific Labeling Requirements by Product Type

Follow the links below to find administrative rules containing lists of labeling requirements for each different product type.

Prohibitions

A label may not contain any untruthful or misleading statements. These include:

  • Use of the term “organic” unless the product has been certified;
  • Claiming that the product is gluten-free, unless labeling follows FDA labeling requirements for gluten-free products; and
  • Health claims that have not been substantiated by the totality of publicly available scientific evidence, for which there is scientific agreement among experts.

A label must not be attractive to minors. This includes:

  • Brands or designs that resemble a product marketed to children;
  • Brands or designs typically marketed to children;
  • Cartoons; and
  • Images of minors.

For more information, please visit the OLCC’s page for packaging and labeling pre-approval. There you will find links to guides, workshop presentations, and frequently asked questions. If you have further questions, please contact one of our compliance attorneys and we will be happy to assist you with your labeling or other needs.

Tune in tomorrow for information on packaging requirements under the new rules.

 

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OMMP Reporting: Do your best

OMMPonlinesystem

As many of you know, the Oregon Medical Marijuana Program (OMMP) requires reporting to track medical marijuana transfers. All registered dispensaries and processors must submit inventory and transfer reports on a monthly basis. Dispensaries participating in early retail sales must submit quarterly reports. In addition, some growers and patients growing for themselves are required to submit similar reports. Reports are due by the 10th of each month.

We have now been through two reporting periods. The feedback has been that grower reporting has been very cumbersome. This is partly because of the following:

  1. A separate user account must be created for each grower.
  2. A different e-mail address is required for each account.
  3. A grow site may have numerous patients designated as their own grower.
  4. A patient does not appear on the online system because renewals have not been fully processed.
  5. Some users have experienced technical difficulties with the website.

In response to points 1-3 above, the Oregon Health Authority (OHA) is in the process of creating a new user status called a “Grow Site Administrator.” Delegating reporting duties to a Grow Site Administrator requires a signature from the patient. In addition, it is unpredictable how long it will take the paperwork to be processed by the OHA once it is submitted. The idea is a good one for growers staying in the OMMP, but this may be too late for grow sites transitioning into recreational production facilities relatively soon.

If you experience points 4 or 5, we have been told that you can submit your monthly report by e-mail to MMG.Online@state.or.us.

In the meantime, all we can say is do your best. For those worried about penalties, Emerge received the below automatic response from the OHA last week:

Thank you for contacting the program. If you have emailed us, we know you are doing your due diligence and trying to comply to the reporting requirements. You will not receive any civil penalties if your reporting is late. We continue to experience high volume and your email will be addressed as quickly as possible.  Please allow 7 – 10 business days for us to reply back to your request.

Thank you,

 The Oregon Medical Marijuana Program

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