Oregon Marijuana: Proposed “Change in Location” Rule Adds Risk for Sellers

The Oregon Liquor and Hashish Fee (OLCC) frequently engages in new rulemaking and this yr is no distinctive. The OLCC has a proposed a slate of rule variations it deigns as responsive to put into action 2022 legislation and technical updates. But this round of rulemaking has several considerable revisions to the principles that are not necessary by laws. These policies go much outside of mere complex adjustments.

This post concerns a major alter to principles that would radically impression sellers of cannabis firms, relevant to “change in location” product sales. The current principles that utilize to sellers are typically identified in OAR 845-0240-1160 (“Notification of Changes”).

How OLCC “change in location” gross sales work nowadays

Initial, it is significant to be aware that a seller does not promote its license, while men and women generally communicate about the sale or “purchase of a license.” Rather, an OLCC applicant purchaser have to use for and be granted a new license by the OLCC in relationship with an permitted sale and license surrender by the outbound licensee vendor.

When a purchaser dreams to move the area of the licensed business, component of the transaction includes requesting a change in place from the OLCC. If the offer falls through, the vendor usually retains its license and carries on. But OLCC is proposing to clear away that safeguard.

The proposed rule for OLCC “change in location” revenue

To wit, OLCC proposes to increase an fully new rule, OAR 845-0240-1170 (“Proposed Rule 1170”), titled Transform of Possession. Suggest Rule 1170(6)(a) presents as follows:

A modify of ownership software may be submitted for a proposed certified premises at a diverse locale than the existing certified premises if the existing licensee or laboratory licensee:

(a) Requests to surrender their license prior to getting assigned to a Commission staff members member following OAR 845- 025-8750, comprehending that the license surrender request will be processed even if the modify of possession application is not accomplished

In the context of the order and sale of a cannabis small business exactly where the purchaser wishes to go to a new area, Proposed Rule 1170(a)(6) indicates a certified purchaser may well park its license at a new locale only if: a) the seller requests to surrender its license prior to the transform of ownership is assigned to an investigator, and b) the vendor loses its license if the offer falls as a result of for any explanation. (E.g. the purchaser not earning the payment.)

The potential fallout of the new rule

This is a massive possibility for sellers. Almost this implies that sellers ought to involve the offer near at the present place and leave it to the customer to change the place afterward. Or, alternatively, that the seller alter the locale prior to the alter of ownership. Neither of these workarounds aids create an efficient market. Just about every constitutes a radical sea adjust from founded merger and acquisition exercise in the Oregon marijuana market.

General public hearing and remark deadlines (soon!)

A community hearing is scheduled on this proposed change in spot rule, and other proposed policies, on Oct 25, 2022. The hearing will be at the OLCC workplaces in Portland and on-line from 10:00 – 11:00 am

(Yeah, just a person hour!). The previous day to comment on these principles is Halloween, October 31 at 12:00 p.m. Call data is in the url earlier mentioned.

Hat tip to Alex Berger of Arise Legislation on this concern. Also, test out our current Oregon posts for additional on modern state cannabis licensing developments and OLCC updates.

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