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Rob Patridge, chairman of the Oregon Liquor Control Commission, on Thursday talked about potential grow site limits, fees related to marijuana licenses and out-of-state investment in the state's recreational marijuana industry.
(Beth Nakamura/The Oregonian)
The size of marijuana grow sites, as well as the cost of holding a state-issued license and the terms under which entrepreneurs can deal with out-of-state investors are among the thorniest issues state regulators will grapple with in the coming months.
The Oregon Liquor Control Commission, the agency charged with regulating the state's recreational marijuana industry, is expected to finalize a set of temporarily rules that will govern the recreational marijuana industry by early November, said Rob Patridge, chairman of the commission and the Klamath County District Attorney.
Patridge sat down with The Oregonian/OregonLive Thursday to talk about the rule making process and some of the more controversial issues before the commission. (This interview has been edited for length and clarity.)
Under the early sales law, anyone 21 and older may purchase marijuana from a dispensary starting Oct. 1. Meanwhile, the liquor control commission isn't expected to launch regulated recreational sales until late next year. How do early sales impact the liquor control commission's work?
Patridge: We are going to get a lot of questions related to, 'What does this really mean?' and 'What is going on?' But the OLCC is not the enforcement arm for that particular piece.
Does it complicate next year's rollout of recreational sales under the OLCC?
Patridge: I think it could get awkward toward the end of 2016 because we will be putting up stores at the end of 2016. There could be some overlap and some market confusion.
One of the issues the OLCC has to address is whether to allow medical marijuana dispensaries to also sell to the 21 and over consumer. It is possible that some stores that will be selling under the early sales program will not be allowed to sell to the recreational market once the OLCC rolls out its program, correct?
Patridge: Correct.
Are you on track to meet your deadline for finishing the rule-making process by early November?
Patridge: I think we are well on track. The commission is geared to do that. We have blocked out extra (meeting) dates as a contingency to make sure we hit those deadlines. Staff is hitting all their deadlines.
What's the timeline for introducing marijuana concentrates and infused edibles into the recreational market?
Patridge: I don't think we have a concrete timeline related to that. We are going to try to approve product when we feel it's safe for the community and we can meet our statutory requirements. We are going to take this a step at a time.
The commission is considering a proposal that would limit majority ownership to Oregon residents and another that would restrict out-of-state investors from controlling the management of a marijuana company. Some marijuana growers and business people say this will hamstring their ability to find financing. What is the thinking behind this proposal?
Patridge: There is a strong interest that marijuana should be produced by, that the majority (owners) and producers would be Oregonians. I don't think there is a big interest in prohibiting out-of-state investment, but out-of-state investment doesn't necessarily mean ownership. It can be financial backing.
As someone who has done over a billion in capital financing in other industries, there are all kinds of people who are investors only for return on their investments. Not everybody takes an equity stake in the ownership of a business.
I think people want accountability. As we went around the state overwhelmingly we heard that people thought that we should utilize the existing structure that is in place to leverage opportunity for Oregonians.
Oregon has been a longtime (marijuana) exporter and those in-state resources and capital that are already there can be leveraged to continue to create jobs for Oregonians.
To what extent is Gov. Kate Brown engaged in the issues related to marijuana regulation?
Patridge: I met with the governor during the legislative session. We have continued to keep her staff involved in the process. We have worked with her staff and they have encouraged us to move forward with direction from the Legislature.
Do you intend to limit the number of marijuana-related licenses you issue?
Patridge: I don't think there has been much discussion about limiting the number of licenses. We've got Colorado that doesn't have limits and Washington that does. My initial reaction is not to limit the number of licenses. I think generally it's been set up as a market-driven approach.
Are there proposed limits on the size of grow sites?
Patridge: I think that there is a general consensus that we don't want these huge monumental grows, acres upon acres of grows. That is pretty clear that the industry as a whole, local government and law enforcement think that they should be smaller, more small-business model as opposed to fields of marijuana as far as the eye can see.
Packaging and labeling: By law, the liquor control commission will review all packaging and labeling of marijuana products - a requirement that producers will pay a fee to meet, said Patridge. He said the mandate, part of legislation passed this year, will ensure that marijuana packaging and labeling meet state requirements before products hit store shelves.
On fees related to marijuana licensing: Under a legislative change made to Oregon's retail marijuana law, the liquor control commission's marijuana budget must be funded exclusively by licensing fees. Patridge said the agency has not yet determined what those fees will be, but he estimated they may be double or more than what was originally planned.
-- Noelle Crombie