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Wednesday, May 25, 2022

OLCC Violation? Keep these two points in mind

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OLCC’s rules are complex and change frequently, so compliance can be difficult and violations occur frequently. Over the years, we have represented clients in administrative proceedings across the West Coast, and each system has its own quirks. Here are a few things to keep in mind if you find yourself in the process.

Focus on compliance on the front end!

Now more than ever, it is time to ensure compliance with the rules. OLCC has made it clear that it expects licensees to understand and abide by the rules. Access to settlements was easier in previous years. OLCC is no longer willing to allow licensees to retain their licenses in some cases when there are multiple violations of the rules, or even one flagrant violation of the rule.

We strongly encourage all licensees to come up with a comprehensive compliance plan rather than feeling vague about the rules and hoping for the best. If you want to keep your license, learn the rules. One of the best investments and assets you can have for your business is a compliance person whose job it is to know the rules and make sure your company is in compliance at all times. This person’s job will be to keep up with the OLCC’s rules (which are still changing), and ensure that every aspect of the license complies with those rules.

Or split the job between several people. For example, if you have someone managing your Instagram account, make it part of their job to make sure every post complies with the rules. Whatever arrangement you create, make sure you have a person or team of people who know the rules inside and out, and will speak up when your practices are non-compliant.

Your employees should be aware of the rules, too. Although it takes time and effort, you absolutely must develop internal policies that address reporting employee violations of OLCC rules. The fact that your employee has a marijuana worker’s permit is not enough to save you if he errs – your business could be in trouble for any violation he might commit.

When you have questions about whether the process is correct, contact us! If you have someone dedicated to ensuring compliance and an attorney to assist with translation when necessary, you are preparing yourself for minimal risk.

Be proactive while investigating

Generally, clients become aware of a violation through three methods – self-report, notification by the inspector via call or email, or notification during a routine inspection. The inspector will then prepare a fee document, and will not communicate with you about what is in this report. May remain in the dark for 2-4 months. While many people sit on their hands during this time, there are steps that can be taken to prepare for future settlement negotiations or a hearing.

First, you can write a letter summarizing the relevant events, which the OLCC will sort of consider as a self-report (we can help with that). If you are proactive in this way, the investigator will usually attach your summary to their report, which can provide really useful context.

On the other hand, you can put things in order – save backups from security cameras if you think your hearing could be 6 months later, or start making sure your business documents are correct. These are all things that will make your life a lot easier once you have actually received the shipping document.

Once you receive the OLCC Shipping Document, it is important to remember that the process has just begun. We always recommend that you provide an answer each time. The written answer should be very specific in acknowledging or denying certain facts, and should fully include extenuating circumstances such as your acceptance of the breach, instances of cooperation with OLCC, and any self-report you may have made. You should treat this as a court file and make it as comprehensive and persuasive as possible, and make sure you submit it by the deadline.

Submit a public records request to get all those backup documents and investigation materials that were used to prepare the shipping document. A small cost may be associated, but in general it is really useful to have all this information. Our office has a great working relationship with OLCC and this has helped us get records on a quick basis in the past.

Once you have submitted your answer and requested a hearing, you are assigned a case presenter (AP&P person) with whom you can begin negotiating. You can start the process by initiating an informal call or email, or have your attorney do it for you. Settlements take many forms, and having a lawyer who works with the OLCC can be very beneficial.

We hope this serves as a helpful reminder to all of our licensees out there. For up-to-date articles on changing OLCC rules, check out:

For a summary of new laws passed in the last month that will lead to more new rules for Oregon cannabis operators, go to here.

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