The Oregon Liquor and Cannabis Commission (OLCC) “has grown tired of ‘bad actors’ gaming the system when they’re caught breaking the law or violating OLCC rules.”
That’s according to a July 29 press release from the commission announcing plans to crack down on these licensees by limiting their ability to monetize their licenses.
At their July 21 meeting, commissioners discussed a new approach against cannabis operators who, facing license cancelation, want to sell their businesses through a “change of ownership,” which requires the OLCC to use its discretion in issuing a new license to the buyer.
The change of ownership option is available to all licensees, even those facing criminal charges for diverting cannabis into the illicit market, for example, or knowingly selling cannabis to minors.
While commissioners are not advocating to halt the sale of licensed cannabis businesses—a ban they have no authority to enact, according to the press release—they are concerned that the value of the cannabis business is based on the ability of the new owner to receive a new license through a change of ownership, despite Oregon’s current license moratorium.
“It’s not fair to the folks who’ve been doing it the right way,” Commissioner Matt Maletis said in a public statement. “We’ve got enough licensees in the system currently.”
Oregon Senate Bill 408 allows the OLCC to revoke adult-use cannabis licenses, and the commission wants to use that regulatory framework to “get bad actors out of the legalized system,” but they don’t want to allow these licensees to financially benefit by allowing a change of ownership business sale, according to the press release.
The OLCC has directed its Administrative Hearings Division to consider a limited “no change of ownership” approach in licensee violation cases moving forward.
“Nobody on this commission wants to take away any livelihood, everybody understands that, we’re all pro-business,” OLCC Chair Paul Rosenbaum said in a public statement. “I think it’s important that we set some ground rules on this so that nobody’s going to be surprised in the future.”