This 2024 Oregon Session, AgHS led efforts to update Oregon hemp program policies resulting in new victories for our clients and the broader hemp industry! The comprehensive omnibus cannabis/hemp bill HB 4121 passed the Oregon Legislature on March 7 and was signed into law on March 20, 2024.
HB 4121 was a House Judiciary Committee Bill that was the product of months of collaborative work between leading hemp industry stakeholders, cannabis industry stakeholders, OLCC, ODA, law enforcement, the leadership of the HB 3000/SB 1564 Taskforce, and the House Judiciary Committee Chairs and Co-Chairs.
Successes on Behalf of AgHS Clients- Benefits to Broader Industry
AgHS’ Clients had two main goals for the 2024 Session:
Broaden Oregon’s manufacturing safe-harbor clause by securing protection for the interstate and intrastate transport of hemp and hemp commodities produced both in Oregon and under out-of-state compliant programs; and
Reestablish authority for the sale of non-intoxicating artificially derived cannabinoids in the general market, in particular CBN.
Both of these goals were accomplished with updates to the statutory authority in ORS 571.
Protection of Interstate and Intrastate Transport of Compliant Hemp and Hemp Commodities Produced in and outside of Oregon
While the update to ORS 571.306 took months of strategic negotiation with law enforcement, regulators and Legislators, we successfully secured the expansion of the INTRAstate safe-harbor clause with thoughtful updates to the authority on the “Transport, receipt of industrial hemp, certain industrial hemp commodities or products” in line with federal protections on interstate commerce for hemp.
Previously, Oregon licenses only had their manufacturing and in-state transportation protected if the material was sourced from an Oregon-licensed farm. Now, Oregon licensees may also receive hemp and hemp commodities produced compliantly out of state and have the manufacturing and intrastate shipment of that material also protected. This important statutory change protects our client and all industry participants manufacturing and transporting hemp, hemp commodities, and work-in-progress material in Oregon!
The update to ORS 571.306 is in Section 8:
SECTION 8. ORS 571.306 is amended to read:
571.306. [(1) A person licensed under ORS 571.281 may, within the boundaries of this state, transport to or receive from:]
[(a)] (1) A person licensed under ORS 571.281 or a laboratory licensed under ORS 475C.548 may, within the boundaries of this state, transport or receive industrial hemp or an industrial hemp commodity that contains no more tetrahydrocannabinol than allowed by the State Department of Agriculture by rule if the industrial hemp or industrial hemp used in the industrial hemp commodity originated from a crop [inspected under ORS 571.281 (7)] that was found to not contain an average tetrahydrocannabinol concentration exceeding the concentration specified by the department by rule.
[(b)] (2) A person licensed under ORS 475C.085, 475C.093 or 475C.097 may, within the boundaries of this state, receive from a person licensed under ORS 571.281 industrial hemp or an industrial hemp commodity or product that contains no more tetrahydrocannabinol than allowed by the Oregon Liquor and Cannabis Commission by rule if the industrial hemp or industrial hemp used in the industrial hemp commodity or product originated from a crop [inspected under ORS 571.281 (7)] that was found to not contain an average tetrahydrocannabinol concentration exceeding the concentration specified by the department by rule.
[(2)] (3) Industrial hemp or an industrial hemp commodity or product transported or received as described in this section may not be considered a “marijuana item.”
Establishing authority for the sale of non-intoxicating cannabinoids in the general market
In HB 3000 (2021) a deal was made to grant OLCC authority to set concentration levels of THC, cannabinoids, and artificially derived cannabinoids in products sold in the general market. Unfortunately, when OLCC went into rulemaking implementing HB 3000 in the fall of 2021, rather than set limits, OLCC banned many of these products for sale in the general market in Oregon, including CBN. The industry has since broadly advocated for a change to the OLCC rules and authority.
In this 2024 Session, AgHS led lobbying efforts, with the support of the Cannabis Industry Alliance of Oregon (CIAO) and OLCC to reestablish authority for standards around the sale of artificially derived cannabinoids in the general market. The need for these policy updates was clear. AgHS was able to not only secure this amendment but include language that the rules adopted may not be more restrictive than the rules applicable to the sale of similar products in the OLCC-licensed dispensaries. This important statutory change opens up the general market for our client and all industry participants selling into Oregon!
The amendments to ORS 571.309 is in Section 9:
SECTION 9. ORS 571.309 is amended to read:
571.309. The Oregon Liquor and Cannabis Commission, in consultation with the State Department of Agriculture, shall adopt rules to establish:
(1) The maximum concentration of tetrahydrocannabinol permitted in a single serving of an industrial hemp product;
(2) The maximum concentration of any other cannabinoid, adult use cannabinoid or artificially derived cannabinoid that is permitted in a single serving of an industrial hemp product; [and]
(3) The number of servings that are permitted in a package of industrial hemp products[.]; and (4) Standards for approving industrial hemp products that contain artificially derived cannabinoids and that are intended for sale at retail. The rules adopted under this subsection may not be more restrictive than the rules applicable to the sale at retail of adult use cannabis items.
Pro-Bono Lobbying for the Hemp Industry at Large
While AgHS led efforts on behalf of our clients this 2024 Session, we had the best interests of the overall industry in our hearts, remaining true to our overall mission “to open markets and stabilize the supply chain by securing legislation and rule-making that advances the business interests of U.S. hemp farmers, cannabinoid processors, and agribusinesses.”
In carrying forward her efforts as the former lobbyist for the Oregon Industrial Hemp Farmers Association/Oregon Hemp Association, and her role as the Governor-Appointed representative for hemp farmers in the state of Oregon on the HB 3000/SB1564 Taskforce, our Chief Legislative Strategist Courtney N. Moran, LL.M. worked hard behind the scenes to stop harmful proposed policies from moving forward this 2024 Session and ensure specific important clarifying language was added to the bill to ease the adoption of new policies around hemp product registrations. Further, we kept other key stakeholders apprised as negotiations progressed through the interim and Session.
Prevention of Hemp License Moratorium Renewal
In the Interim, leading legislators, law enforcement, and select counties were urging for the reauthorization and expansion of hemp license moratorium language adopted in 2022 under HB 1564, which led to the moratoriums in Jackson, Josephine, and Douglas counties in 2022 and in Jackson and Douglas counties in 2023. Courtney held strong with the 2024 Session working group and made clear any hemp license moratorium language was a non-starter and would lead to serious opposition. With her tenacity and firm opposition on the issue, the language was struck from the initial drafts before the language was made public and sent into the Legislative Counsel in January 2024.
We are grateful to the workgroup for understanding the importance of keeping hemp licensing open and look forward to new participants joining the Oregon industry!
Product Registry Requirements
Background:
HB 3000 provided the authority for ODA to track the transfer of industrial hemp commodities and products intended for human consumption. In discussing implementation, the HB 3000/SB 1564 Taskforce proposed and agreed to a compromise regarding this tracking for hemp products. While the Taskforce discussed at length OLCC and legislators' desire to require all hemp products be tracked in METRC like similar marijuana products, at the time OIHFA Lobbyist Courtney N. Moran, LL.M. stood strong for the industry and repeatedly opposed hemp going into METRC. The Taskforce subcommittee on cannabinoids discussed other proposals such as GMP verification and product registry concepts. The compromise for the Taskforce was the concept of a product registry. The Taskforce did not outline specifics. The concept was brought forward by OLCC through HB 3049 and SB 353 in the 2023 Legislature. While both bills died in the 2023 Session, the desire by OLCC and HB 3000 Leadership remained strong.
2023-2024 Interim:
The workgroup discussed the product regulatory concept during several meetings in the interim. Proposals bringing forth the concept from HB 3049 and a non-published -2 that added OLCC enforcement authority were brought to the group. Our Chief Legislative Strategist consistently and clearly reiterated concerns expressed during the 2023 Session about OLCC oversight over hemp and the need to limit the impacts of this proposal on the industry as much as possible if they would not agree to strike it in whole. During a workgroup meeting in January, one leading Legislator proclaimed that if the hemp industry thought it was a reasonable position not to have cannabinoid products regulated by OLCC she would “Take them to the mat!”. As such, the concept was moving forward despite what objections came.
With concern for the industry and the potential impacts such a concept could have, our Strategist took time to carefully review draft language, propose amendments, and coordinate meetings with the workgroup to secure their adoption. Adding to successes in protecting Oregon manufacturing in 2021, she prioritized the inclusion of language that protected manufacturing in the state and verified products produced in Oregon but sold out of state were not required to be registered as part of the product registry program. She confirmed the language included exemptions so the registry would not apply to grain or fiber products without added cannabinoids, nor to commercial animal feed. Additionally, she demanded that OLCC consult with ODA if a product registry was to move forward. After several months of meetings with OLCC, the collaboration was agreed to.
2024 Session
The 2024 Session started with bill language for HB 4121 introduced and publicly posted the Friday before the Session began, February 2. The 82nd Oregon Legislative Assembly convened for the 2024 Legislative Session on Monday, February 5th. Amendment language (-1), which included AgHS Client requests was posted publicly on the first day of Session. Upon close review, our Chief Legislative Strategist noticed that OR Legislative Counsel had drafted the amendment with critical errors on implementation dates and coordination with ODA.
Our Strategist arrived at the House Judiciary Committee hearing early on the 6th. She had pre-hearing meetings with OLCC, law enforcement representatives, and Committee Staff. In the meetings, she confirmed an agreement to include the interstate transport and market access hemp amendments within the emergency clause for immediate implementation. With everyone in agreement, she was able to have approved the request for an updated amendment. During testimony before the House Judiciary Committee Public Hearing on February 6, our Strategist testified to the Committee that an updated amendment regarding the implementation dates was in progress.
Fees: Application, Enforcement, and an Appropriate Fund
The workgroup received the updated amendment (-2) on Wednesday, February 7. We expected the vote to occur on the morning of February 8 but learned mid-way through the Committee meeting that the DOJ requested an additional amendment to the bill language regarding OLCC funding and fee authority for the product registry. Our strategist led sidebar meetings in the lobby requesting clarifications and additional updates to the bill be made in a new amendment to move forward.
Over the next several days AgHS met with OLCC, law enforcement representatives, the Cannabis Industry Association of Oregon, and other industry stakeholders to ensure a reasonable agreement was made. Our strategist made clear this registry was being forced upon the industry, and advocated to remove enforcement fee authority as proposed by DOJ and to also update the fund the product registry fees would go to if implemented. The initial proposal from the Legislature was to have the registry fees go to the General Fund, which funds all of Oregon and could have funded additional law enforcement objectives. Our Strategist recommended the funds go directly to ODA for enforcement of the program or to a separate specific enforcement fund, as that has been the main area of concern from regulators, law enforcement, and the Legislature for the past several years. The workgroup members worked together and with OCLC's leadership, the -3 removed the enforcement fee language (as we requested), provided that the registration fee could not exceed the cost of administering the registry, and created a new fund, “Marijuana Control and Regulation Fund.” While the product registry itself was not able to be removed, our Strategist limited the impacts and reach of the registry for the benefit of the industry pro-bono.
In summary, this 2024 Session AgHS worked pro-bono for the broader hemp industry to secure the following:
Stopped the reauthorization of the hemp license moratorium
Protected in-state manufacturing from product registry requirements (products manufactured in-state but sold out of state exempt)
Secured ODA collaboration in the development of the Product Registry requirements
Verified industrial hemp grain and fiber products without added cannabinoids and commercial feed are exempt from the product registration requirements
Stopped additional fees being added to the product registry fees for enforcement
Secured the creation of a separate fund for product registry fees and associated violation fees to enhance oversight within the program rather than funding other programs or broader law enforcement objectives
HB 4121 passed the Oregon Legislature with the following votes:
February 13- House Committee on Judiciary-unanimous (10-0)
February 27- Joint Committee on Ways and Means Subcommittee on Transportation and Economic Development-unanimous
February 29- Full Committee on Ways and Means- 17-6
March 6- House- 55-1
March 7- Senate- 20-7
March 13- Signed by Speaker Dan Rayfield
March 19- Signed by Senate President Wagner
March 20- Signed into law by Oregon Governor Tina Kotek.
March 25- Chapter 16, (2024 Laws): Effective date March 20, 2024.
A copy of Enrolled House HB 4121 is available here.
General Overview of Oregon HB 4121 Hemp Policy Updates:
Sections 1-6: reauthorization of enforcement provisions in HB 3000 (2021)- (HB 3000 sections 40-44)
Section 8: opens up interstate shipment of hemp products and commodities among and between hemp licensees by updating ORS 571.306 (protects intrastate transportation of work-in-progress hemp products and commodities to include compliant materials sourced from farms both in and outside Oregon)
Section 9: reestablishes the authority for OLCC to set standards for approving industrial hemp products that contain artificially derived cannabinoids (i.e. CBN!)
Sections 11-14:
Directs the OLCC, in consultation with ODA, to establish a registration system for industrial hemp products that contain cannabinoids intended for human or animal consumption
Specifies minimum labeling requirements, including manufacturer information, ingredients, service size and potency, applicable health and safety warnings, and age restrictions
Section 25: Directs the OLCC to establish uniform standards for minor decoy operations to investigate sales of adult-use cannabis items to persons under age 21
If you have any questions about the legislative history of HB 4121 please contact us at admin@agriculturalhempsolutions.com
For legal questions as to how HB 4121 may impact your business operations, please consult with our sister Law Firm, EARTH Law, LLC, by email at info@earthlawllc.com.
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