OLCC

Oregon: OLCC May Cancel 41 Grow Licenses for Surveillance Camera and Inventory Tracking Violations

The Oregon Liquor Control Commission (OLCC) announced that it conducted an enforcement inspection of 354 legal outdoor growers during the fall harvest, which was named “Operation Good Harvest”. The inspections occurred from September through early November 2018, with a particular focus on southern Oregon. The OLCC used the harvest notifications submitted by growers to schedule the the inspections. The majority of growers (73%) passed the inspection with no violations. However, 41 growers, 22 in Medford alone, could lose their licenses due to compliance issues. Common violations included:

  • Surveillance Cameras: Surveillance cameras did not work, cover the appropriate areas or continuously record;

  • Inventory Tracking: The information in the inventory tracking system did not match the plants on the premises, and growers failed to provide notification about harvests; and

  • Alterations to Premises: Unapproved alterations to the premises including security and alarm issues.

The OLCC has faced challenges ensuring that licensees continuously record operations and retain the surveillance tapes. The OLCC recently proposed a rule that would increase the fines for surveillance camera violations. Cancelling licenses for surveillance compliance violations may provide the teeth needed for licensees to comply.

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Whistleblowers Responsible for 5 out of 6 Oregon Cannabis Enforcement Actions

The Oregon Liquor Control Commission (OLCC) entered into six (6) stipulated agreements against cannabis licensees for a total of roughly $35,000 in penalties or 182 days suspension and one recommendation to cancel a cannabis license. Licensees should note that five (5) of the actions were started by whistleblower including neighborhood watch groups and employees.

The trend in enforcement proceedings over the prior year has been fines for failing to retain video footage. The OLCC will need to assess whether the current penalty structure provides enough deterrence for firms to retain surveillance recordings as retention can provide further evidence of additional violations.

The summary of each stipulated agreement includes:

  • CO2 Company Auction House, LLC d/b/a CANNABIS & CO. :

    • Surveillance Recordings: Failed to retain 90 days of surveillance recordings

    • Compliant Source: Portland Neighborhood Involvement

    • Fine: $4,950.00 civil penalty OR serve a 30-day license suspension

  • TopShelf Garden Centre, LLC d/b/a HEAD STASH HORTICULTURE

    • Surveillance Recordings: Failed to retain 90 days of surveillance recordings

    • Complaint Source; Complaint of On Site Consumption

    • Fine: $4,950.00 civil penalty OR serve a 30-day license suspension

  • Cannabis Corner, LLC CANNABIS CORNER

    • Surveillance Recordings: Failed to retain 90 days of surveillance recordings

    • Complaint Source: Former Employee (illegal sales; unsanitary conditions; unreported theft)

    • Fine: $4,950.00 civil penalty OR serve a 30-day license suspension

  • CO2 Company Auction House, LLC d/b/a HEADWATER (Wholesaler)

    • Surveillance Recordings: Failed to retain 90 days of surveillance recordings

    • Inventory Storage:

      • Failed to keep inventory in enclosed room

      • Failed to use steel door or commercial grade locks

    • Complaint Source: Portland Neighborhood Involvement

    • Fine: $6,105.00 civil penalty OR serve a 37-day suspension

  • Pacific Partners RTG, LLC d/b/a WAY HIGH 101

    • False Statement - Denied on site consumption, which regulators later identified in video recordings

    • Consumption While on Duty

    • Failure to Enter Inventory into Seed-to-Sale System

    • Fail to Use Hygienic Practices when Handling Marijuana

    • Complaint Source: Former employee

    • Fine: $9,075.00 civil penalty OR serve a 55-day suspension

  • Oregon Bud Works, LLC d/b/a Oregon Bud Works

    • Approval of Premises Structure:

      • Unapproved construction of a new building, and

      • Use of conex storage bins

    • Seed-to-Sale Tracking System

      • Failure to enter inventory

      • Intentional misrepresentation of data

      • Failure to segregate harvest lots or affix UID tags and accurately weigh

    • Surveillance Camera & Alarm System

      • Insufficient coverage

      • Failure to maintain video recordings and back up copies for 30 days

      • Failure to ensure 24 hour a day taping

      • Failure to have fully operational alarm system

    • Restricted Access

      • Failing to prevent unauthorized access to restricted areas.

    • Fines: Cancelled License


Oregon Cannabis Regulator Ratchets Up Penalties and Cancels Cannabis Producer License

Staff of the Oregon Liquor Control Commission (OLCC) recommended that the license for Oregon Bud Works, a cannabis producer, be cancelled and inventory destroyed for multiple regulatory violations. Oregon Bud Works will have until January 31, 2019 to complete a sale of the company or it will be required to surrender its producer license. The OLCC staff’s recommendation to cancel the producer’s license sends a significant message to egregious rule violators and licensees that they must comply with the state’s regulations.

The staff of the OLCC found multiple violations of the state’s cannabis regulations during inspections of the premises. The OLCC”s findings are in line with past enforcement actions brought by Oregon including:

  • Approval of Premises Structure:

    • Unapproved construction of a new building, and

    • Use of conex storage bins

  • Seed-to-Sale Tracking System

    • Failure to enter inventory

    • Intentional misrepresentation of data

    • Failure to segregate harvest lots or affix UID tags and accurately weigh

  • Surveillance Camera & Alarm System

    • Insufficient coverage

    • Failure to maintain video recordings and back up copies for 30 days

    • Failure to ensure 24 hour a day taping

    • Failure to have fully operational alarm system

  • Restricted Access

    • Failing to prevent unauthorized access to restricted areas.

Oregon Regulator Shuts Down 2 Marijuana Businesses for Rule Violations

The Oregon Liquor Control Commission is sending a strong message that marijuana establishments must comply with the regulations or be shut down permanently. The Commission shut down two licensees based on significant regulatory violations including misrepresentation and evidence tampering. The Commission’s decision to terminate the license of serious rule offenders is consistent with last month’s determination to revoke the license of Black Market Distribution due to recidivist activity.

First, the Commission upheld the temporary suspension by an administrative law judge of the Corvallis Cannabis Club’s retail license due to federal criminal investigations. The Commission charged the Corvallis Cannabis Club with five (5) violations following a search warrant that was executed by federal investigators.

The Commission also cancelled the recreational marijuana producer license held by the High Cascades Farm of Bend for thirteen (13) significant violations ranging from performing activities outside the authorized scope of the license, misrepresenting the destruction of marijuana plants, intentionally destroying or concealing evidence, and failing to disclose financial owners. The violations cited by the Commission show an intentional attempt to circumvent the regulations for the entity’s financial benefit.

Compliance with regulatory requirements is going heavily scrutinized as the marijuana industry matures and more states enter into the market. Regulators are armed with significant information through the seed-to-sale tracking systems that allow them to identify potentially fraudulent activity which they have the broad authority to investigate. Licensees must be familiar with the regulatory requirements and ensure that compliance systems are in place to identify any misconduct or failing controls. The penalties for failing to do so are significant and can result in the loss of a business.

DEADLINE FOR COMMENT ON OREGON GROW RULE

Today is the deadline for submitting comments to the Oregon Liquor Control Commission (OLCC) on a draft rule requiring medical marijuana growers to track inventory from seed to sale using the cannabis tracking system.  Under the proposed rule, the inventory of registered medical marijuana growers must be entered into the system within 10 days of establishing an account.  All transfers to patients, primary caregivers, dispensaries, laboratories and processors must be recorded.including the amount of marijuana transferred and the date.  Comments can be submitted on the OLCC website.

Growsite Administrator Package
www.oregon.gov/olcc/marijuana/Documents/Rules/Growsite_Administrator_Package/Rulemaking_Notice_GrowsiteAdministratorPackage.pdf

OREGON MOVES TO REVOKE MARIJUANA LICENSE

The Oregon Liquor Control Commission (OLCC) is taking a tough stance agains licensees that do not take compliance seriously.  The Commission's action provides a strong message to licensees that they must abide by the law, or the commission will shut down the business.  The Commission rejected the staff's recommendation .to fine Black Market Distribution $16,355 or impose a 90 day suspension for 10 violations of OLCC rules.  The Commission warned recidivists that it was going to make an example out of rule breakers and impose stronger enforcement measures.

OREGON ENFORCEMENT: CAMERA SHY X 5

Five (5) marijuana licensees settled with the Oregon Liquor Control Commission (OLCC) for various regulatory violations.  All five settlements included surveillance camera infractions.  Licensees violated the rules by failing to retain surveillance recordings for the minimum required time, and by failing to continuously record areas where mature plants or cannabis products were located.  The OLCC also cited licensees physically changing the premises, by building a barn, greenhouse and a Conex structure, without receiving the Commission's prior approval.  

SUSPICIOUS POT ACTIVITY LEADS TO LOWER LIMITS

Oregon detected suspicious activity in the medical marijuana market, and  implemented a temporary rule to reduce the medical marijuana daily purchase limits to the recreational limits.  The Oregon Liquor Control Commission relied on the cannabis tracking system to identify the suspicious activity, and took immediate action as a means of halting the illegal activity.  The OLCC with investigate the incident with the Oregon Health Authority, and determine whether possible findings should be forwarded to law enforcement. The temporary rules expire in 6 months.