Interested in becoming a licensed cannabis producer in Oregon? There are a few very important things you should know. Voters created Oregon’s legal cannabis market in 2014 when they approved a ballot measure to allow for Adult Use. Since then, this thriving endeavor continues to grow. Unfortunately, the interest in being a retailer, producer and/or processor has made for a sticky licensing situation.
Because this can be confusing, we’re here to help walk you through the details. Here’s everything you need to know about securing a canabis producer license in Oregon.
What is an Oregon Producer License?
This license gives an entity the ability to grow and cultivate cannabis. The cured and finished cannabis flower is sold to a retailer or to a processor. After that, a retailer sells product directly to the consumer and processors create concentrates, topicals, edibles, tinctures, etc.
To get this license, you’ll need to apply to the Oregon Liquor Control Commission (OLCC).
Can I still get an Oregon cannabis Producer License?
Let’s start with the complicated news first. In June of 2018 the OLCC, which is in charge of licensing and regulating the legal cannabis industry in the state, implemented a “temporary” freeze on cannabis license applications. Therefore, applications submitted after June 2018 are held in licensing limbo.
When will the OLCC lift this “temporary” freeze? That’s where things get murky. The OLCC cannot unilaterally decide to stop additional licensing in the state. As a result, state legislatures must take action– and that’s exactly what the OLCC is hoping for as the 2019 legislative session quickly approaches. It’s likely state lawmakers will decide if the OLCC should continue to approve licenses.
Why would the state of Oregon cap producer licenses? This practice isn’t unheard of. Other states, like Washington, have implemented similar rules.
According to the OLCC, this temporary freeze was implemented to help “ensure that the OLCC is fulfilling its regulatory duties and providing timely responses to businesses in the industry.” Essentially, the OLCC argues that their resources are spread thin enough as it is. There are nearly 2,000 cannabis licensees (including more than 1,000 licensed producers). As a result, the OLCC claims it has its hands full.
While that may be true, there are also signs that the state market is oversaturated with growers and processors. If growers and processors can’t sell their crop due to an overcrowded legal market, licensees may start diverting product to the black market to stay afloat. Avoiding this type of scenario gives lawmakers a solid talking point if they decide to cap licenses.
We’ll post an update if any legislative action is taken to permanently cap marijuana licenses in Oregon or the temporary freeze is lifted.
Is there any way around the Oregon Cannabis License freeze?
Oregon rules state that these licenses are non-transferable. A person cannot simply purchase a cannabis license. All license holders must go through the lengthy and intense application process. But where there’s a will, there’s a way.
For example, our team of cannabis law attorneys has successfully worked with the OLCC, and other states with similar circumstances, to change the ownership of a license. The new owners then submit an application, which will be reviewed by the OLCC despite the freeze.
The cost of a producer license in Oregon can vary greatly depending on the seller’s situation but always fall in the five or six figures range. Buying and selling a cannabis license requires many moving parts. To help, consider hiring an attorney with cannabis law experience to handle all of the contracts, filings and negotiations.
What’s the application process for an Oregon Producer License?
Let’s explore the application process for an Oregon Producer License. What does it entail?
Firstly, the application process starts with a non-refundable $250 application fee. Secondly, using this form you will have to submit a laundry list of supporting documentation as well, including:
- A copy of a completed Land Use Compatibility Statement from the local government;
- A lease, deed, purchase documents or any other document proving the applicant has legal access to the property where they plan to produce cannabis;
- A boundary sketch of the proposed premises, including floor plans for any structure on the property. Spare no details here, you should even show where every security camera will be;
- Documentation of the water sources that used in the form of a billing statement or contract.
- Information on the structure of the business applying in the form of an LLC Questionnaire, a corporate questionnaire or sole proprietor documents;
- An individual history form for each person identified as an applicant and the OLCC can ask for Individual History forms for additional people they deem appropriate.
Then, on the application itself you will answer questions about your proposed business. You need to know proposed hours of operation, canopy size, equipment, whether it’s indoor or outdoor grow and more. After that, you’ll submit your application!
Then, your submitted application is assigned to an OLCC investigator. They can ask for additional supporting documentation throughout the process. And once you’re licensed and ready to go, make sure each and every employee you hire has a valid Oregon Marijuana Worker Permit.
What fees do I have to pay for an Oregon Producer License?
Besides the non-refundable application fee of $250, you will be responsible for annual fees as well. Your canopy size determines the annual licensing fee you will pay. As expected, the larger the canopy, the higher the annual license fee.
- Micro Tier I ($1,000): Allows up to 625 square feet of indoor space or 2,500 outdoor
- Micro Tier II ($2,000): Allows between 626 to 1,250 square feet of indoor space or 5,001 to 10,000 outdoor.
- Tier I ($3,759): Allows between 1,251 to 5,000 square feet of indoor space or 5,001 to 10,000 outdoor.
- Tier II ($5,750): Allows between 5,001 to 10,000 square feet of indoor space or 20,001 to 40,000 outdoor.
To see more details on applying for an Oregon Producer License, read through the OLCC’s Frequently Asked Questions. These applications are time-consuming and confusing. With experience successfully filing license applications in the state of Oregon, we’re here to help if you need us.