Oregon Hemp Alert: New licensing requirement for dealers takes effect on July 1

Oregon’s new hemp rules go into effect next week. Starting Monday, July 1, 2024, any hemp retailer or wholesaler who stores, transfers, or sells industrial hemp or hemp products for resale to another person must have a hemp seller license from the Oregon Department of Agriculture (ODA). The seller license fee is $100 per year and is valid from July 1 to June 30. The application can be found here.

If you are involved in the hemp trade in Oregon, whether local or out of town, please read this blog post carefully. The dealer license requirements are very broad and will surely surprise many people.

Where do these new hemp rules come from?

The new rules stem from House Bill 4121, which Governor Tina Kotek signed into law on March 20, 2024. This bill addressed both marijuana and hemp. I commented on HB 4121 in my bill preview here and in my session summary here. I would recommend anyone interested in the background of this new licensing program for hemp retailers read those posts.

Following the meeting, the ODA conducted a rapid round of rulemaking and adopted OAR 603-048-0175 on June 5. It is a short section of rules that is also worth reading. You can also find an ODA FAQ-style summary here.

Does the new hemp dealer license also apply to sellers from other states?

Yes! This is something unusual about the new programme, which I highlighted in February and March. I am not aware of any other state that follows a similar approach and I think it will surprise many people. However, the regulation and the ODA FAQ make it clear that both local And Wholesalers and retailers from other states are required to have a hemp seller’s license. This requirement also applies to any online retailer selling to or from Oregon.

Who does NOT need a hemp dealer license?

According to OAR 603-048-0175(1) there are some exceptions to the licensing requirement. These include:

• Broker. Or, as provided in OAR 603-048-0175(1)(a), a person who “merely facilitates the sale or transfer by bringing buyers and sellers together and who does not store the industrial hemp or hemp articles at any time.”
• Shipper. Or, as provided in OAR 603-048-0175(1)(d), a person who “only transports hemp or hemp products and does not store them at any time other than as necessary for transportation or delivery.”
• Licensed growers, dealers or producers of agricultural hemp seed, provided the licensee “first notifies (ODA) in the license application or other form provided by (ODA) of the location where the industrial hemp items will be stored, transported or sold.”
• Marijuana licensee of the Oregon Liquor and Cannabis Commission.

What if I have multiple websites?

The rules are clear: “A supplier must obtain a separate license for each supplier location.” OAR 603-048-0175(3). They also provide that “each unlicensed supplier location identified by (ODA) shall constitute a separate violation.” At an additional $100 per location (per year), the cost of compliance is small compared to the alternative. It is also worth noting here that ODA has given in on the price: originally the fee was set at $200 per location, but wholesalers and smaller retailers refused and ODA gave in. For applicants who apply during the year, the fee is not prorated.

What else is changing with hemp in Oregon?

Quite a lot. HB 4121 covered much more than registration requirements for hemp sellers. Coming are sweeping new rules for everything from registering hemp products to enforcement to restricting the sale of hemp products containing cannabinoids for human or animal consumption. The Oregon Secretary of State also issued a temporary administrative order on May 16^thlaying down criteria for the presumptive testing of hemp plants.

All of these developments and changes are beyond the scope of today’s post. Instead, I refer the reader to my summaries linked above or to HB 4121 itself (also linked above) for more information. Finally, I would encourage anyone active in this space to stay up to date through the ODA’s Resources, Bulletins, and Training page and sign up to receive email updates on the program.