Cannabinoids

Oregon Hemp Alert: New Vendor License Requirement Takes Effect July 1

The new rules arise from House Bill 4121

New Oregon hemp rules take effect next week. As of Monday, July 1, 2024, all hemp retailers or wholesalers who store, transfer or sell industrial hemp or hemp items for resale to another person must have a hemp vendor license from the Oregon Department of Agriculture (ODA). The vendor license fee is $100 annually and is valid from July 1 to June 30. You can find the application here.

If you have anything to do with the Oregon hemp trade, whether locally or from out-of-state, please read this blog post carefully. The vendor license requirement is very broad and is certain to catch many people off guard.

Where did these new hemp rules come from?

The new rules arise from House Bill 4121, which Governor Tina Kotek signed into law on March 20, 2024. That law covered both marijuana and hemp considerations. I annotated HB 4121 in my legislative preview here and my session wrap-up here. I would encourage anyone interested in the background of this new hemp vendor licensure program to read those posts.

Following the session, ODA undertook a quick rulemaking round, and adopted OAR 603-048-0175 on June 5. It’s a short rules section, and worth a read as well. You can also find an FAQ style summary from ODA here.

Does the new hemp vendor license apply to out-of-state sellers?

Yes! This is something unusual about the new program, which I highlighted back in February and March. I am not aware of any other state that has taken a similar approach, and I believe it will surprise a lot of people. That said, the rule and the ODA FAQ are clear that both local and out-of-state wholesalers and retailers require a hemp vendor license. The requirement also applies to all online vendors that sell into, or out of, Oregon.

Who does NOT need a hemp vendor license?

There are a handful of exceptions to the licensure requirement, pursuant to OAR 603-048-0175(1). These include:

  • Brokers. Or, as provided by OAR 603-048-0175(1)(a), a person who “only facilitates the sale or transfer by connecting buyers and sellers and the person does not store the industrial hemp or hemp items at any time.”
  • Shippers. Or, as provided by OAR 603-048-0175(1)(d), a person who “only transports hemp or hemp items and does not store [them] at any time other than as necessary for transportation or delivery.”
  • Licensed growers, handlers, or agricultural hemp seed producers, provided the licensee “first notifies [ODA] of the location where the industrial hemp items are stored, transferred or sold in the license application, or on another form provided by [ODA].”
  • Oregon Liquor and Cannabis Commission marijuana licensees.

What if I have multiple sites?

The rules are clear that “a vendor must obtain a separate license for each vendor site.” OAR 603-048-0175(3). They also provide that “each unlicensed vendor site identified by [ODA] is a separate violation.”  At another $100 per site (per year), the cost of compliance is small as compared to the alternative. Here, it’s also worth noting that ODA came down a bit on price: originally, the fee was slated at $200 per site, but wholesalers and smaller retailers pushed back and ODA acceded. For mid-year applicants, the fee is not pro-rated.

What else is changing in Oregon hemp?

Quite a bit. HB 4121 covered a lot of territory beyond the hemp vendor registration requirements. Extensive new rules are coming on everything from hemp product registration, to enforcement, to limitation on hemp product sales containing cannabinoids for human or animal consumption. The Oregon Secretary of State also issued a temporary administrative order back on May 16th, establishing criteria for presumptive testing of hemp plants.

All of these developments and changes are beyond the scope of today’s post. Instead, I will refer anyone to my prior summaries linked above, or to HB 4121 itself (also linked above) for more information. Finally, I would recommend that anyone active in the space keep abreast of the ODA’s Resources, Bulletins and Trainings page, and sign up to receive program email updates.

Source: Canna Law Blog

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