Final month, I spent a Saturday scraping collectively a syllabus for the Hashish Regulation and Coverage class I educate at Lewis & Clark Regulation College right here in Portland, Oregon. In a single unit, we undergo the regulatory historical past of Oregon hashish. From a tutorial perspective, it’s wonderful to have a look at all of the issues which have occurred over time. From a lawyering perspective, it’s nearly unbelievable.

2011

I used to be a second-year lawyer at a enterprise agency downtown when a medical hashish dispensary proprietor got here by way of our workplace. The store was right here in Portland (with a develop within the again) and the proprietor had been handed alongside by two different regulation companies who felt uncomfortable advising him. This gentleman had acquired a chapter trustee’s discover on his door, advising that his landlord was in a Chapter 7 (I believe). He desperately needed to remain within the constructing. Possibly even purchase it, someway.

We seemed on the lawyer ethics guidelines, referred to as the State Bar Affiliation, learn the Ogden memo, and so forth., and it was unclear whether or not we may service the shopper– even concerning compliance with state and native legal guidelines. It was unclear whether or not our malpractice insurance coverage prolonged protection. It was unclear whether or not our financial institution would take the deposits. It was unclear if his enterprise even complied with Oregon regulation to start with. The whole lot was unclear; nobody would opine. The first Cole memo issued that summer time, making issues much more complicated. However, the solutions weren’t clearly “no” and my boss requested me if I’d wish to attempt. I had no drawback with any of it.

We ended up serving to the shopper dealer a deal to pay hire for a time to the chapter trustee (which might by no means, ever occur at this level) after which I began serving to him with enterprise agreements and all the things else. Again then, there have been just about no attorneys engaged on non-criminal hashish points. He began sending me business referrals fairly quick. It was a loopy time— the work was much less refined but additionally more difficult in sure respects than a lot of what we do in the present day.

Sadly, all of these persons are gone now.

2012

Oregon was not licensing medical marijuana dispensaries, however folks had been getting courageous and opening collective-style storefronts, just like the man I simply talked about, ostensibly beneath the state’s decades-old medical marijuana statute. That regulation was not designed for commerce– in any respect. The concept was to easily to confer an affirmative protection to “sufferers” and “caregivers” from prosecution beneath state regulation for hashish possession and use. That’s so far as it went. Plenty of the companies I handled in these days had self-organized as non-profits and collectives and such. I couldn’t discover CPAs for them, or something actually. It was such a large number.

That fall, Measure 80 narrowly misplaced on the polls (47%-53%). Measure 80 would have legalized hashish for grownup use in Oregon, established a licensing and taxation system, and so forth., which in the end occurred a couple of years later beneath Measure 91. Elsewhere, business pioneers like California’s Harborside dispensary (who would later change into a shopper) had been going at it with the feds. In these days, all the things was a rock battle.

2013

The Oregon legislature handed a regulation referred to as HB 3460 that August, directing the Oregon Well being Authority (OHA) to write down guidelines and launch a registry system for medical marijuana operators. This was a giant deal! Shoppers appeared nervous: there was no actual business foyer and all the things coming from Salem appeared reactive. The second Cole Memo additionally issued that summer time, in response to Washington and Colorado coming on-line with grownup use licensing applications. It felt like issues had been altering fairly quick. My boutique enterprise regulation agency “merged” with a mid-sized regulation agency downtown that catered to monetary establishments and didn’t like hashish. I continued to quietly do the work.

2014

OHA issued its guidelines, which had been skeletal, unenforced and ass-backwards on sure issues. There have been no hashish testing necessities; no grandfathering protections for present storefront operators; a rule that individuals who had been convicted for “manufacture or supply of [cannabis]” couldn’t be “liable for” a hashish retailer (?!); and I can’t even bear in mind what else. However I bear in mind shoppers coming to us with so many questions and issues which had been basically unanswerable, as a result of the framework wasn’t there. That November, Measure 91 handed, legalizing hashish for grownup use in Oregon. Lastly.

2015

The legislature began monkeying round with Measure 91 nearly instantly in fairly drastic methods (e.g. tax construction, residency requirement). A few of my shoppers began to ramp as much as transition into the OLCC program, however many sat again and waited. Individuals had been getting greater and bolder on the medical facet. We started to see a proliferation of medical marijuana processors and “wholesalers” round this time, though none of this was contemplated within the guidelines. Numerous crazy stories.

The Oregon State Supreme Court docket amended the lawyer ethics guidelines in February, to expressly enable us attorneys to work with marijuana enterprise “concerning Oregon’s marijuana-related legal guidelines.” I left my outdated regulation agency in June, and began the Portland workplace of Harris Bricken. Lots of people appeared to assume that was a loopy transfer, nevertheless it was actually enjoyable. I began writing right here on the weblog and I wrote the first of 100 columns for the Portland Mercury.

Grownup use and possession turned authorized on July 1, which was awkward within the sense that OLCC had not but licensed shops. The state finally capitulated and allowed for “early gross sales” by way of present medical dispensaries on October 1. The entire system was nonetheless vexing from a contracts perspective– the hashish being purchased and bought all got here in by way of the OHA provide chain, which meant it was theoretically the property of medical marijuana sufferers, not less than to start out.

I recall working with one other lawyer in my agency on one of many OLCC committees on rulemaking (wholesale), after which getting the first batch of the OLCC program rules in October of 2015. The company made a valiant effort there, however enterprise acumen was missing. The “monetary curiosity” and “residency” guidelines had been terribly confusing, and primary business ideas weren’t addressed, from convertible notes to safety pursuits. The Metropolis of Portland was even worse.

Of us began lining as much as submit OLCC functions on January 1, 2016. I recall organizing and incorporating a dizzying variety of little corporations within the months main as much as that date. Again then, a typical setup was somebody with property, a man who knew develop hashish (at all times a man), and possibly an investor with $200,000 or so. Actually easy stuff. I additionally recall testifying at numerous metropolis and county council occasions for shoppers with respect to cannabis-related zoning ordinance proposals. A few of these hearings had been well-run and respectful; a couple of went off the rails.

2016

We muddled by way of licensing and the system started to launch. I recall certainly one of our producer (develop) shoppers being informed they had been the “third licensee within the state.” The legislature started to fiddle with the system additional, together with by way of repeal of the residency requirement (HB 4014). It’s laborious to overstate how necessary this was: no different jurisdiction on this planet had a hashish program the place non-residents might be homeowners. Calls began coming in from all over the place and other people couldn’t appear to get their minds round it. However the rule was clear: you possibly can be from Oregon or California or Israel or Spain. You may be from Mars.

We had been requested loads of questions on federal regulation again in as of late, which hardly occurs anymore. The worry issue ticked up considerably once more in November, when Donald Trump was elected President. That very same election night time, California, Nevada, Maine and Massachusetts all went leisure (and Arkansas, Florida and North Dakota all adopted medical applications), making the state/federal dynamic extra dissonant than ever. Regionally, increasingly more OHA program individuals made their approach into the OLCC system, whereas others stayed put or went off the grid altogether.

The OHA lastly bought its act collectively and began licensing medical marijuana processors though the medical program was clearly on the way in which out. The Oregon Division of Agriculture (ODA) handed a key regulation to propel the stalled state hemp program, and we had a couple of shoppers begin in on that. That they had logistical issues you wouldn’t imagine, together with discovering seeds.

2017

Jeff Classes was confirmed as Legal professional Basic to kick off the 12 months. Individuals will say that didn’t scare anybody, however I’m right here to inform you that funding slowed a bit. By mid-year, although, the OLCC program started to hit its stride. Issues felt principally “constructed” for the primary time, even when a testing lab bottleneck endured alongside different program kinks. Elsewhere, I started instructing the hashish course on the regulation college. Class was bought out after which some.

By December 2017, there have been nearly 900 licensed farms in Oregon, and the M&A market began to achieve steam. There was a LOT of discuss at this level about oversupply, unlicensed cannabis and diversion. We had been fielding fewer and fewer calls from “medical marijuana growers”, though it was identified that people had been nonetheless stacking playing cards and all the things else. That stated, all of these 90-plant medical grows had been going the way in which of the buffalo.

Elsewhere, most of the newer companies had been already failing and people began suing each other in earnest. Reporters nonetheless referred to as each time fits had been filed. I recall placing out adverts for litigators, and questioning if anybody was going to determine generate income within the regulated market. On the hemp facet, we noticed increasingly more shoppers pursuing CBD gross sales, which had been coming into vogue however confusion concerning the 2014 Farm Invoice and all the things else.

2018

Jeff Classes kicked off the 12 months by rescinding the Cole Memo, which bought folks jittery as soon as once more. The native “oversupply” dialog was coming to a head, such that Oregon U.S. Legal professional Billy Williams felt the necessity to writer a memo of his personal. Instantly thereafter, the OLCC “paused” its consumption of marijuana license functions– probably because of the memo, but additionally as a result of the company was simply to date behind.

The Canadian invasion was additionally in full swing at this level. Lots of our native shoppers had been rolling up on the Canadian Inventory Trade by way of reverse mergers, or questioning how to do that, or speaking with somebody about doing it. Different shoppers despised the entire thing. And nonetheless different shoppers WERE the Canadians. Overseas {dollars} had been additionally pouring into different western states by this level, principally California and Nevada.

I can not inform you what number of mergers, reverse mergers, choice agreements, inventory sale agreements, asset buy agreements, convertible debt agreements, and so forth. and so forth. we papered round this time. It was extremely dynamic and extremely quick. Round this era, we additionally had been employed by a sequence of large-cap, bellwether U.S. corporations making an attempt to grasp the CBD market and what might be finished there. Numerous opinion work.

Exterior of Oregon, I doubt there was ever an even bigger 12 months for hashish than 2018. California commenced its grownup use market, Canada legalized marijuana federally, the U.S. legalized hemp by way of the 2018 Farm Invoice, Michigan turned the primary midwestern state to go full rec, and the U.N. introduced it could revisit hashish. Oh, and Jeff Classes was sent on down the road. It was superior.

2019

Hemp was most likely the largest story regionally in 2019. Practically 2,000 growers registered to plant over 63,000 acres, an almost 6x acreage improve from the 12 months prior. Then the issues got here. A lot of the hemp went unharvested as a consequence of dangerous climate and inexperience. Costs additionally went by way of the ground all alongside the provision chain, from seeds to completed merchandise. USDA gave the impression to be slow-walking the foundations and FDA was as ineffective as ever. In all, 2019 was most likely the primary 12 months that our workplace dealt with extra litigation on the hemp facet than on the THC facet. Individuals additionally began to make use of ODA licenses as cowl for diversion round this time, versus persisting within the OHA (medical) system.

On the THC facet, the Oregon legislature lastly passed a law to curtail the award of hashish manufacturing licenses, bowing to stress from all sides. It was most likely too late to have a lot impression at this level, though the hassle did create a robust secondary marketplace for manufacturing license transfers (which we proceed to commerce in in the present day). The Oregon legislature additionally handed a forward-looking regulation to permit hashish exports– the thought right here was to arrange native growers for the top of prohibition. Lastly, vaping got here into the regulatory crosshairs (and this continues to be a problem).

Total, 2019 was the primary 12 months that the OLCC market appeared to essentially settle out and there was much less compliance work than earlier than. We had paralegals masking the entire licensing. I began performing some knowledgeable witness work regionally, however a excessive level was flying out to D.C. and serving to the Nationwide Credit score Union Administration develop its guidance for hemp banking beneath the 2018 Farm Invoice. Past that, it was simply offers and offers and offers.

2020

If you happen to made it this far, thanks and I applaud you. My 2020 “State of the State” publish on Oregon hashish might be discovered here. It provides a strong overview as to the place we’re in the present day.

Ten years in, it has been a visit, from advising unregulated medical outfits to working with personal fairness and multi-state operators. Total, it’s simply been actually enjoyable. Let’s see what occurs subsequent.