OLCC to limit use of Delta-8-THC, other artificially derived cannabinoids

Produces similar high to marijuana's THC; commission also discusses COVID-19 impacts; 2 Bend liquor licensees sanctioned

Portland, OR -- The Oregon Liquor Control Commission has initiated rule-making for Delta-8-THC and other psychoactive components of hemp and marijuana that currently fall outside the adult-use cannabis market’s system of testing and labeling.

At their regular monthly meeting on Thursday, commissioners expressed concern about the general availability of this unregulated, intoxicating product.

Delta-8-THC has recently emerged for sale nationwide, including in the supply chain of the OLCC recreational marijuana market, as well as in unregulated brick and mortar convenience stores and internet websites. Delta-8-THC is present in marijuana, but the OLCC only regulates Delta-9-THC produced in marijuana. When consumed by humans, Delta-8-THC produces an effect (“high”) similar to Delta-9-THC.

Delta-8-THC can also be created from hemp, which is regulated under the federal Farm Bill of 2018. Typically, hemp-derived Delta-8-THC is converted from CBD through a chemical process, which also produces a large proportion – as high as 30 – 50% – of unknown byproducts. Delta-8-THC created from hemp can be found in food products and sprayed on hemp flower.

Delta-8-THC isn’t addressed in Oregon statutes, isn’t included in Oregon Health Authority marijuana concentration limits, and there’s no testing for the Delta-8-THC or the byproducts included in its chemical conversion. But Delta-8 products are currently widely available for purchase outside the OLCC adult-use market, even by children.

“When this was brought to my attention, alarm bells went off in my head,” said Paul Rosenbaum, OLCC Commission chair. “You have minors going into grocery stores, and they understand very well what this is all about. And let me tell you, if there’s a way to find it, people will do it.”

OLCC’s proposed rulemaking would only address the presence of Delta-8-THC and other artificially-derived cannabinoids in products grown, manufactured and sold in Oregon’s recreational marijuana market. But for OLCC and the Oregon Department of Agriculture to take effective action on total THC measurement and tamp down the availability of such products to minors, legislative action is required.

“We don’t have sufficient authority over total THC in Oregon,” said Steve Marks, OLCC's executive director. “But until we get that and ability to do final product testing to help get these things into the right markets where they’re supposed to be, either in the unregulated hemp CBD market or into our market, it’s going to be hard.”

Marks observed that all states are facing the issue of how to regulate Delta-8-THC, but that Oregon is at the forefront in addressing it. Regulatory gaps do remain surrounding the broader issue of intoxicating hemp cannabinoid products in the general marketplace that can be legally sold to minors, and who should be responsible for regulating those products.

“Unregulated hemp has no final product testing,” said Marks. “They only test for Delta-9 in the field. You can’t regulate what you don’t test for. We’re talking about two species of the same plant. And that means that federal and state regulators need to harmonize their oversight of this plant, and work towards across-the-board testing of marijuana and hemp products designed for human consumption before they enter the marketplace.”

The House General Government Committee of the Oregon Legislature is expected to take up the Delta-8-THC issue at a public hearing on Thursday, March 25, where it could consider legislation ensuring that all intoxicating THC products, properly tested and labeled, are sold within the OLCC regulated system and also ban the sale of currently non-regulated Delta-8-THC products to minors under age 21.

The State of Oregon’s epidemiologist updated the Oregon Liquor Control Commission, at its regular monthly meeting on March 18, 2021, about the progress in Oregon’s fight against the COVID-19 virus, and what that means for the re-opening of OLCC licensed bars and restaurants. Dr. Dean Sidelinger, with the Oregon Health Authority, provided an update on COVID-19 infection trends, vaccination rates, and the outlook for re-opening Oregon this summer. The revelations led to a discussion with Commissioners about how to balance the risk of the virus spread and the sustained economic hardship faced by the hospitality industry. The Commissioners also appointed a new liquor agent in Ontario and voted to adopt three stipulated settlement agreements.

According to Sidelinger, there has been a steady decline in the number of COVID-19 cases in the state countered by an increase in vaccination rates that are helping control the virus spread; that’s reflected in the county risk level maps now showing more counties in the lower and moderate risk categories compared to the high and extreme risk categories. Statistical modeling suggests this trend will continue and could lead to more re-opening activities taking place.

Sidelinger emphasized that capacity restrictions in bars and restaurant have contained community spread in locations where virus case counts have spiked. “When there’s a larger amount of Covid in the community, so the counties in extreme and high risk, the risk of spread in these communities tends to go higher, and that’s why the restrictions look a little different in eating and drinking establishments,” said Sidelinger.

Several Commissioners questioned Sidelinger about the difference in restrictions faced by the hospitality industry compared to other businesses. “Many of our [alcohol] licensees and the more than 70,000 Oregonians they employ, feel lost and that they received the ‘brunt end of the stick’,” said Commissioner Kiauna Floyd. “They want to know how they can safely and successfully plan for the future.”

Sidelinger indicated data from several national studies conclusively correlates that wearing face coverings, practicing social distancing, and modifying gathering spaces to improve airflow have reduced the spread of COVID-19; he attributed the behavior of Oregonians following these measures to the success Oregon has had, compared to other states, in battling the virus.

OLCC Commission Chair Paul Rosenbaum expressed thanks to Sidelinger and OHA for the ongoing conversations the two agencies have had during the pandemic and expressed optimism that the state’s COVID guidance would help OLCC licensees reduce the risk of virus spread as they re-opened.

“Our agency is a regulatory agency, which first and foremost has the interest of the general public at heart,” said Rosenbaum. “There is a tremendous concern for the protection of the public and the protection of the business.”

OLCC Executive Director Steve Marks expressed appreciation to OHA for creating a public health framework during the multiple phases of the pandemic that allowed OLCC to waive rules and enable licensees to conduct some business activity and scale up that activity as the spread of the virus subsides.

"OLCC alcohol licensees have suffered significant economic harm because of the pandemic and have struggled to stay open and make money, even when following public health guidelines to stop the spread of COVID-19 and keep Oregonians safe,” said Marks.

Commissioners reinforced they would take a similar approach to the one they took as the pandemic forced alcohol licensees to reduce and restructure their business models. As OLCC licensed bars and restaurants re-open, the OLCC will continue to look for ways to help provide economic relief to licensees.

Commissioner Matt Maletis called out one action that could help OLCC licensees that the Commission can’t take unilaterally -- waiving license fees. “Throughout the pandemic, we’ve been able to provide financial regulatory relief to the hospitality industry, but Washington State has gone even further by temporarily waiving liquor license fees,” said Maletis. “That’s an idea worth exploring by the legislature in order to provide additional help to this important, but struggling part of Oregon’s economy."

In other business before the Commission, three applicants presented plans to be considered for appointment as the Liquor Agent for Ontario, Oregon. After considering the qualifications of each applicant, the Commissioners selected Jennifer Weichers, as the new operator.

The Commission also ratified violation fines and suspensions based on stipulated settlements (detailed information on specific cases can be found here on the OLCC website).

River Pig Saloon (FCOM) in Bend held an event in an unlicensed common area of the building where the business is located. The area serves as an entry way for other businesses housed within the building. Licensee will pay a civil penalty of $5,660.00 OR serve a 36-day suspension.

Licensee is: Zeco Development Group, LLC; Ramzy Hattar, Managing Member; Shadi Hattar, Member.

501 Grill (FCOM) in Salem engaged in activity that violated the Oregon Health Authority’s (OHA) Statewide Mask, Face Shield, Face Covering Guidance issued on July 24, 2020, when it failed to require its patrons and employees to wear appropriate face masks, face shields, or face coverings at the premises. Licensee also violated Phase II Guidance for Restaurants and Bars when at least six feet of physical distancing was not maintained between patrons, or between patrons and employees. Licensee will either pay a $6,600.00 civil penalty and serve a 10-day suspension OR serve a 50-day suspension.

Licensees are: JQ Restaurant, Inc.; Yonggen Qiu, President/Secretary/Director/Stockholder.

White Water Taphouse (L) in Bend allowed consumption of alcoholic beverages on the licensed premises after 10:00 pm in violation of Oregon Health Authority guidelines relating to the hours that a business may serve alcoholic beverages for on-premises consumption on the licensed premises. Licensee will either pay a $3,795.00 civil penalty OR serve a 23-day suspension.

Licensees are: Griffin Restaurants, LLC; Nicholas Griffin, Managing Member.