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New Legislation Gives OLCC More Oversight Over the Hemp Industry and Delta-8 THC

August 12, 2021

Danica Hibpshman and Ferdinand Ruplin - Tonkon Torp LLP

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Oregon

On July 19, 2021, Governor Kate Brown signed HB 3000, a comprehensive bill that gives the Oregon Liquor and Cannabis Commission (OLCC) significantly more authority and oversight over the hemp industry – including the production and sale of products containing hemp-derived Delta-8 THC. HB 3000 appears to have been passed with the aim of protecting consumers from intoxicating marijuana products that contain (previously) unregulated and/or artificially created cannabinoids (like Delta-8 THC). In addition, HB 3000 gives the OLCC increased resources and regulatory authority to crack down on illegal marijuana grow operations that are being conducted under the guise of hemp farming. 

Regulation of Adult Use Cannabinoids and Adult Use Cannabis Items

HB 3000 creates a new definition for “adult use cannabinoids” which encompasses Delta-8 THC and artificially derived cannabinoids that have an intoxicating effect. It directs the OLCC to establish a framework for determining when an industrial hemp commodity or product becomes an “adult use cannabis item” due to the concentration of adult use cannabinoids. With the authority granted under HB 3000, the OLCC established a new rule, which provides that an industrial hemp commodity or product is deemed to be an adult use cannabis item if it:

1. Contains 0.5 milligrams or more of (i) any combination of THC or THC acids including Delta-8 or Delta-8 THC or (ii) any other cannabinoids advertised by the manufacturer or seller as having an intoxicating effect;
2. Contains any quantity of artificially-derived cannabinoids; or
3. Has not been demonstrated to contain less than 0.5 milligrams total Delta-9-THC when tested in accordance with industrial hemp laboratory industrial hemp testing requirements

The new legislation and corresponding OLCC rules also provide that adult use cannabis items can only be sold by OLCC licensed retailers to individuals who are over 21 years old. As a result, any hemp-derived product containing over 0.5 milligrams of Delta-8 THC (or any combination of Delta-8 THC and Delta-9 THC) must be entered into Metrc and sold by an OLCC licensed retailer.

Distinguishing Marijuana from Hemp

HB 3000 also directed the OLCC to establish a methodology for distinguishing marijuana from industrial hemp for the purpose of tracking industrial hemp operations in the state. In response, the OLCC  determined that cannabis plants may be distinguished between marijuana and hemp by (i) using OLCC standards for marijuana testing, (ii) using Oregon Department of Agriculture standards for hemp testing, or (iii) a new “presumptive testing” method.

The new presumptive testing method entails the following process:

1. A minimum of three composite samples from mature plants or a minimum of three composite samples from immature plants are collected. Each composite sample must be taken from a different production area, or if the grow site has less than three production areas, each composite sample must be taken from three different areas of the grow site;
2. Grow sites with multiple production areas must have a composite sample collected from at least one out of every ten separate production areas; and
3. Sampling is not required to be representative of the crop, grow site, or production area

HB 3000 makes it a Class A misdemeanor for the “unlawful production of marijuana,” which includes producing marijuana or industrial hemp outside of a location licensed by the ODA or OLCC, or producing an amount of plants in excess of the allowable limits. Hemp farmers may also be fined up to $10,000 if their crop exceeds allowable THC limits.

It is important for hemp farmers and other stakeholders in the hemp industry to carefully review these new rules and regulations to ensure they fully understand all requirements for the production, testing, and sale of hemp-derived products containing Delta-8 THC or any other cannabinoids. If you have any questions about HB 3000 or the new OLCC rules, please contact Ferdie Ruplin (503.802.2029 or ferdie.ruplin@tonkon.com) or Danica Hibpshman (503.802.2160 or danica.hibpshman@tonkon.com).

About Tonkon Torp
Tonkon Torp LLP is a leading business and litigation law firm serving public companies, substantial private enterprises, entrepreneurial businesses, and individuals throughout the Northwest. For more information, visit tonkon.com.