OLCC Report: Oregon Cannabis Producers in Substantial Compliance

On Monday, the Oregon Liquor Control Commission (“OLCC”) released results of enforcement inspections of recreational marijuana producers, which indicate that the majority of inspected licensees are in compliance with Oregon laws and the OLCC rules.

“Operation Good Harvest” was a saturation compliance effort that focused on Oregon’s fall 2018 legal outdoor cannabis harvest. OLCC inspectors were in the field for the past two months and conducted 354 inspections across the state, with an emphasis on southern Oregon, a hotbed of marijuana production, accounting for more than a third of the recreational marijuana licenses in the state.

The OLCC inspected a total of 354 outdoor producer licensees and found that 259, or 73 percent of them did not have any “deficiencies” nor were they likely to commit potential violations. Of the 95 licensees with deficiencies, 41 have potential violations that could lead to the cancellations of their license, which roughly represents 12 percent of the outdoor producer facilities inspected. A more comprehensive overview of the inspection results is as follows:

The inspections reflect our agency’s effort to prevent diversion from Oregon’s legal cannabis market, and we’ll continue compliance activity across all license categories to maintain the well-regulated market that Oregonians expect”, declared Steve Marks, OLCC Executive Director.

The results of Operation Good Harvest demonstrate that the OLCC continues to take steps to corral Oregon’s overproduction of marijuana by taking a tougher stance on rule violations by licensees. (For some background on this administrative policy progression, we have recently written about OLCC’s recent “tightening up”, from application scrutiny through dealing with non-compliance.)

The result of Operation Good Harvest also seems to reinforce the fact that the surplus of marijuana in our state does not generally emanate from cannabis grown and produced by OLCC licensees, despite earlier reports to the contrary. Instead, illegal export tends to stem from unlicensed grows and from poorly regulated, quasi-commercial systems like the Oregon Medical Marijuana Program.

As far as the violations actually turned up by OLCC inspections in Operation Good Harvest, the most common deficiencies pertained to issues with cameras and surveillance coverage. Other common violations included:

• Data in the Cannabis Tracking System (METRC) not matching plants or product found on the licensed premises;
• Marijuana plants not tagged and entered into METRC;
• Failure to provide the OLCC with harvest notification information;
• Making unapproved alterations to the licensed premises; and
• Using scales not approved by the Oregon Department of Agriculture.

The agency is currently investigating licensees for alleged violations and will decide how to charge these license holders once its investigations are complete. Any licensees whose license will be revoked will be entitled to challenge the OLCC charges through the State of Oregon’s Administrative Hearings process However, the final decision on any charges will be made by the OLCC Commission.

Operation Good Harvest produced promising results, showing that Oregon continues to be a leader in regulating cannabis, and that this nascent industry is slowly but surely finding its equilibrium.