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Cannabis Licensing Update – No New Licenses Anytime Soon

September 24, 2021

Danica Hibpshman - Tonkon Torp LLP

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Oregon

At its recent monthly meeting, the Oregon Liquor and Cannabis Commission (OLCC) formally announced that it will recommend extending the moratorium on new producer licenses for two more years. This recommendation will be made to the Oregon legislature during the February 2022 short session, and it is expected that the recommendation will be taken. The agency also announced it would soon be making recommendations on the volume of other (particularly retail) license types as well. 

The announcement comes on the heels of an OLCC report on the implementation of HB 3000 since it went into effect earlier this summer. The report includes a summary of the outcome of the agency’s joint work with various law enforcement agencies and the Oregon Department of Agriculture. The OLCC reported having visited over 300 registered hemp grow sites in Southern Oregon, as well as a measure of success identifying illegal grow operations. Despite their efforts, the OLCC reports that the illicit market continues to run rampant and is undercutting the success of the legal system as a whole. The agency cited the need to get illegal grow operations under control on a statewide basis as its primary reason for keeping the moratorium on new licenses in place.

What’s next?

Oregon’s cannabis industry should not expect new producer licenses until at least 2024. For other license types, it remains an open question as to when new applications will be processed. It will not likely happen any time soon – at least not until the February 2022 legislative session is concluded. The buying and selling of licensed businesses is still permitted and may remain the only avenue for entering the Oregon cannabis marketplace in the foreseeable future. 

The transfer of licenses can be complex, and there are many nuances that both buyers and sellers should consider and expect during the process. It is important to consult with legal counsel early in any cannabis license transaction so you can avoid common pitfalls and obstacles. For more information on this topic, see Cannabis License Rights Transfer 101 – Planning is Key.

Questions? Contact Danica Hibpshman (danica.hibpshman@tonkon.com or 503.802.2160) or one of the other experienced attorneys in Tonkon Torp’s Cannabis Industry Group. This update is prepared for the general information of our clients and friends. It should not be regarded as legal advice.

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.