After the Measure 91 legalization initiative passed with over 56% of the vote, the Oregon Liquor Control Commission (OLCC), as the regulatory body in charge of implementing commercial cannabis rules for the state, had a big job in front of them. That task has forced the OLCC to make tough choices and adapt.
Much more has to be done, of course, but thousands of new jobs later, to go along with more than $85 million in new revenue for the state, I personally believe the OLCC has done a good job, all things considered. Full disclosure, I was Chief Petitioner of the New Approach Oregon campaign team that tabbed the OLCC as the regulatory agency.
OLCC Executive Director Steve Marks, the top cannabis and alcohol regulator in the state, was kind enough to answer a few of my questions, ahead of his appearance this weekend at the Oregon Marijuana Business Conference in Ashland, where a panel of OLCC regulators will present the latest information regarding licensing and compliance and answer attendees’ questions. We touch upon some challenges, successes, the Donald Trump Administration, and whether the future could include cannabis cafes like Amsterdam and a low-income program to assist medical marijuana patients in need.
Anthony Johnson: You were tasked with leading the implementation of rules a brand-new (regulated) industry in Oregon. Has anything surprised you about this new job?
Steve Marks: Every day was…and continues to be a surprise with the implementation of recreational marijuana in Oregon! But the most surprising thing when we started this effort, given the challenge, was the general lack of controversy. Then Chairman Rob Patridge’s leadership had a lot to do with that, so did having the Joint Marijuana Committee of the legislature with Senator Ginny Burdick and Representative Ann Lininger leading a bipartisan charge. And thanks to our decision at OLCC to tap into the industry’s expertise in Oregon to help frame the regulatory structure, the state was in a good position to launch this new era of controlled commercial legal marijuana production and sales.
What have been some of the biggest challenges?
Well it was largely unchartered waters. Colorado and Washington had navigated some of this, but the formation of establishing a grounds up framework was a first time experience for the agency, with each new aspect of regulating marijuana as a challenge in itself. The sheer workload has been a constant challenge. The speed with which we had to contract with the private sector to create licensing and cannabis tracking systems, and launch those systems during a time when policies weren’t fully developed was of course a fundamental challenge.
Another primary challenge is the state doesn’t do “start-ups” frequently or well. Capitalizing the agency and staffing it to meet the challenge always lags behind. There was no “rear view mirror” of experience and our systems of budgeting and government just aren’t very adaptable to that constructive.
How has the politics and work that has gone into regulating marijuana compared to alcohol, beer and wine and other political work that you have done?
So you know I have experience as a policy advisor and then chief of staff to Governor Kitzhaber so dealing with stakeholders and policy issues was routine, but the primary issue difference here was the uncertainty of federal intervention and the fact that we couldn’t rely on federal regulatory systems to dovetail with, as we do on the alcohol side of the agency. So our principal challenge was to meet the mandate of Measure 91 and balancing the regulatory structure that we would create for the production and sale of marijuana with public health and public safety needs. As the primary decision-maker for the first marijuana rules advisory committee, I can tell you that was about as difficult a process as I’ve ever been involved with in state government. Everyone wanted the opportunity to contribute to the process. As tough as it was I think we established a very good committee that accomplished great work for the industry and the citizens of Oregon.
Has it been extremely unique or some similarities exist across industries and other issues?
I think what was unique about regulating marijuana was that it was coming directly out of prohibition and very rarely do regulators and government face that kind of fundamental change. Our agency’s only experienced this once before – upon the passage of the 21st Amendment, which ended the prohibition…on alcohol. But, the primary difference between this and other sets of issues was the fact that the product remains federally illegal which is a challenge for every aspect of setting up the economic systems for commerce in Oregon.
Oregon’s recreational system has created thousands of jobs and brought in over $85 million in new revenue already. Has the amount of business generated surprised you?
No. Oregon is well known for its craft and artisanal industries – craft distilling, craft brewing, craft winemaking. And craft cannabis. Our markets might not be the biggest, but they’re certainly among the best and they’ve cultivated a worldwide reputation that’s been a significant driver in the state’s economy. Now that we have proven our mettle and created support for the industry, we need to nurture this market by investing in our business service to improve compliance and enforcement against illegal operations.
Do you think that regulators and industry participants can be proud of the work so far?
This is the question I wanted to answer because I’m very proud of the industry and I’m proud of the OLCC and Commission and legislature for taking a considered, deliberate and serious approach to implementing regulations for recreational marijuana. I think the work we’ve been doing together the state should be proud of because Oregon is leading the nation with what I believe is the most overall cogent policy implementation. Again, we may not have programs as big as Colorado and Washington, but other states and jurisdictions that are starting to regulate marijuana are looking to us because of the approach we’re taking. We’ve had some great advantages in accomplishing this work to date and a lot more must be done before we can look back and say it was a success.
Regulators and legislators seem to have adapted a bit to the new Donald Trump regime, particularly with Jeff Sessions as head of the Justice Department. Do you feel the state has taken the necessary steps to ensure that the federal government remains at bay and continues the policy of not interfering with state-legal cannabis businesses?
Oregon’s executive branch has made it pretty clear it will defend Oregonians access to regulated cannabis in the face of a Federal challenge. The legislature has spoken too – in the form of SB 863 which only allows retailers to keep consumer’s info if they opt in, and the legislature also passed and the Governor signed into law SB 1057 which allows recreational licensees to seamlessly switch to becoming exclusive medical licensees if the Federal government intervenes. That said, it’s incumbent on all of us involved in this – regulators, industry, consumers, law enforcement and the general public to support the regulated market, to make it work, to improve and make it better. Because complying with the parameters of the Cole Memo is the best approach to satisfying Federal concerns and perceptions.
I understand that you can’t endorse any piece of legislation, but do you feel that the OLCC could effectively regulate cannabis consumption businesses, such as the cannabis cafes that exist in Amsterdam?
As we’ve witnessed in Colorado coming up with an optimal solution to allow public consumption is a challenge. In Oregon a significant challenge is the state’s Indoor Clean Air Act. And our agency is further challenged because we regulate the alcohol industry, which the Federal government also has oversight on. So there’s a tension that exists over the prospect of allowing cannabis consumption in a location where alcohol consumption takes place, and our commission has been clear that the products do not mix for our regulated environments. All said we need practical answers for consumers and if called on the OLCC can certainly regulate social consumption.
Again, understanding that you aren’t endorsing any legislation, but do you feel that the state could take some steps to amend the law to assist low-income patients, such as setting up a plan like OHP or food assistance programs? Or policies to help patients in need to get medicine directly from licensed marijuana businesses?
Oregon’s legislature has already shown it was open to accommodating and ensuring access to cannabis medicine for patients who needed it because OLCC licensed stores are able to sell medical grade product – and more than 10 percent of sales from retailers is for medical. Plus medical patients can show their OMMP cards in OLCC licensed stores and get their medicine without paying any sales tax. SB 1057 also provides a “bump-up” for growers to produce an additional 10% of their canopy, and that 75% of what’s produced from that extra canopy go to specified cardholders and caregivers for no charge. I think the legislature would be open to additional approaches to ensure patient access if necessary. As a general comment state policy makers are very familiar with creating program to allocate resources to meet the needs of Oregon’s low-income and medically vulnerable citizens.
With the experience in Oregon and other legalized states thus far, do you see the momentum for legalization to continue in other states? What about federally, at least treating cannabis like alcohol and freely allowing states to set their own policies? What are some changes in federal law that could happen in the short-term that could benefit Oregon?
It’s interesting because recently cannabis regulators from US states and Canada and its provinces recently got together to share best practices and it’s clear that while Canada has a federally encompassing regulatory system, there will still be a patchwork of provincial and city regulations. That’s similar to what’s happening here in the States, but when the U.S. regulates cannabis at the federal level it will benefit from all the approaches at the state level and be able to pick from the best practices of many states. Frankly the alcohol regulation systems and laws found across the U.S. are balkanized and not necessarily a model the cannabis industry should aspire to emulate.
The OLCC, and the state in general, celebrates the beer, wine and liquor industries and the economic benefit of those. Marijuana isn’t quite there yet. Do you see a future where Oregon is touting its cannabis industry in the same type of way?
As I mentioned earlier Oregon celebrates its craft industries which provide a significant contribution to our state’s economy. Tourism is tied in to all of those craft industries. Already entrepreneurs are attempting to find creative ways to accommodate tourists who appreciate cannabis in ways that don’t run afoul of the law. As the cannabis industry matures Oregon’s established tourism industry is positioned to appeal to the market.
Anything that you would like to add?
Compliance is still the keyword for our agency…and the industry. A well-regulated cannabis industry not only provides public safety and consumer protections, it also helps to ensure a level competitive playing field for our licensees. All our work together has taken us to this good point today and both the OLCC and industry are improving practices and removing the barriers to anyone who wants to “go legal.” Our early licensees are pioneers who are creating the future of a safe, controlled system for cannabis consumers that fits into our community structures, local and regional economies and in doing so establishes a standard of equality that all Oregonians can follow.
Thanks for your time, Steve.