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

2011

I used to be a second-year lawyer at a enterprise agency downtown when a medical hashish dispensary proprietor got here by means 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 legislation corporations who felt uncomfortable advising him. This gentleman had obtained 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, by some means.

We appeared on the lawyer ethics guidelines, known as the State Bar Affiliation, learn the Ogden memo, and so on., and it was unclear whether or not we might service the consumer– even relating to 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 legislation to start with. All the pieces was unclear; nobody would opine. The first Cole memo issued that summer season, 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 downside with any of it.

We ended up serving to the consumer dealer a deal to pay lease 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 the whole lot else. Again then, there have been just about no attorneys engaged on non-criminal hashish points. He began sending me trade referrals fairly quick. It was a loopy time— the work was much less refined but in addition more difficult in sure respects than a lot of what we do right now.

Sadly, all of these individuals 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 underneath the state’s decades-old medical marijuana statute. That legislation was not designed for commerce– in any respect. The thought was to easily to confer an affirmative protection to “sufferers” and “caregivers” from prosecution underneath state legislation for hashish possession and use. That’s so far as it went. Numerous 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 on., which finally occurred a number of years later underneath Measure 91. Elsewhere, trade pioneers like California’s Harborside dispensary (who would later grow to be a consumer) had been going at it with the feds. In these days, the whole lot was a rock struggle.

2013

The Oregon legislature handed a legislation known 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 trade foyer and the whole lot coming from Salem appeared reactive. The second Cole Memo additionally issued that summer season, 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 legislation agency “merged” with a mid-sized legislation 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 purchasers 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 virtually instantly in fairly drastic methods (e.g. tax construction, residency requirement). A few of my purchasers began to ramp as much as transition into the OLCC program, however many sat again and waited. Folks had been getting larger 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. A lot of crazy stories.

The Oregon State Supreme Courtroom amended the lawyer ethics guidelines in February, to expressly enable us attorneys to work with marijuana enterprise “relating to Oregon’s marijuana-related legal guidelines.” I left my outdated legislation agency in June, and began the Portland workplace of Harris Bricken. Lots of people appeared to suppose that was a loopy transfer, however 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 ultimately capitulated and allowed for “early gross sales” by means of current 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 means of the OHA provide chain, which meant it was theoretically the property of medical marijuana sufferers, not less than to begin.

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

2016

We muddled by means of licensing and the system started to launch. I recall certainly one of our producer (develop) purchasers being instructed they had been the “third licensee within the state.” The legislature started to fiddle with the system additional, together with by means of repeal of the residency requirement (HB 4014). It’s laborious to overstate how vital this was: no different jurisdiction on this planet had a hashish program the place non-residents may very well be homeowners. Calls began coming in from in every single place and folks 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 a number of questions on federal legislation again in lately, which hardly occurs anymore. The worry issue ticked up considerably once more in November, when Donald Trump was elected President. That very same election evening, 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. Domestically, an increasing number of OHA program contributors made their manner 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 despite the fact that the medical program was clearly on the way in which out. The Oregon Division of Agriculture (ODA) handed a key legislation to propel the stalled state hemp program, and we had a number of purchasers begin in on that. They’d logistical issues you wouldn’t consider, together with discovering seeds.

2017

Jeff Classes was confirmed as Lawyer Common to kick off the 12 months. Folks will say that didn’t scare anybody, however I’m right here to let you know 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 persevered alongside different program kinks. Elsewhere, I started educating the hashish course on the legislation faculty. Class was bought out after which some.

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

Elsewhere, lots of the newer companies had been already failing and folk began suing each other in earnest. Reporters nonetheless known as every time fits had been filed. I recall placing out advertisements for litigators, and questioning if anybody was going to determine easy methods to become profitable within the regulated market. On the hemp facet, we noticed an increasing number of purchasers pursuing CBD gross sales, which had been coming into vogue however confusion concerning the 2014 Farm Invoice and the whole lot 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. Lawyer Billy Williams felt the necessity to writer a memo of his personal. Instantly thereafter, the OLCC “paused” its consumption of marijuana license purposes– presumably because of the memo, but in addition as a result of the company was simply up to now behind.

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

I can not let you know what number of mergers, reverse mergers, possibility agreements, inventory sale agreements, asset buy agreements, convertible debt agreements, and so on. and so on. 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. firms making an attempt to grasp the CBD market and what may very well be achieved there. A lot of opinion work.

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

2019

Hemp was most likely the most important story domestically 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 result of unhealthy climate and inexperience. Costs additionally went by means of the ground all alongside the availability chain, from seeds to completed merchandise. USDA appeared to be slow-walking the principles 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. Folks 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 influence at this level, though the trouble did create a powerful secondary marketplace for manufacturing license transfers (which we proceed to commerce in right now). The Oregon legislature additionally handed a forward-looking legislation 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 difficulty).

General, 2019 was the primary 12 months that the OLCC market appeared to actually settle out and there was much less compliance work than earlier than. We had paralegals masking all the licensing. I began doing a little knowledgeable witness work domestically, 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 underneath the 2018 Farm Invoice. Past that, it was simply offers and offers and offers.

2020

For those who made it this far, thanks and I applaud you. My 2020 “State of the State” publish on Oregon hashish could be discovered here. It provides a stable overview as to the place we’re right now.

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