Oregon Health Authority Improves Cannabis Extracts Policy After Urging from Legislators


The Oregon Health Authority’s interpretation of recent legal changes rocked the Oregon cannabis industry and community, halting the legal production and sale of cannabis extracts. Processing companies were starting to boom in Oregon, employing people, increasing revenue generated by dispensaries and helping patients that have relied upon their medicine. Representative Ann Lininger and Senator Ginny Burdick, the co-chairs of the Marijuana Legalization Committee sent an email to the Oregon Health Authority Director today, urging OHA to take measures that could alleviate the issue.

It appears that OHA has listened and has developed a policy that will exempt processors from criminal liability so long as they have applied for an OHA processor license (instead of having to actually have received the license.) The agency will start accepting applications on April 1st (no joke) and those that have applied can process extracts and provide them to licensed dispensaries. Dispensaries will be able to sell extracts made by these provisionally-licensed processors. While the extracts industry has been been on hold for a few weeks, this new policy will greatly improve the situation as business can resume at the start of April.

While this has been understandably frightening for many and there are still some more issues to be worked out, Oregon lawmakers and OHA policy makers should be commended for addressing the concerns of extractors and patients.

The new rule from OHA:

A medical marijuana processing site that has submitted a complete application for registration with OHA is exempted from criminal liability pursuant to ORS 475B.475. The registration process with OHA opens on April 1, 2016.

The letter from Marijuana Legalization co-chairs Representative Ann Lininger and Senator Ginny Burdick that spurred the new change:


State of Oregon Seal


VIA ELECTRONIC TRANSMISSION: lynne.saxton@state.or.us

March 23, 2016
Ms. Lynne Saxton
Director, Oregon Health Authority
500 Summer Street, NE
Salem, OR 97301-1097

Dear Director Saxton:

We are writing to express concern over the possibility of a gap in the production of cannabis extracts that could deprive patients of medicinal marijuana and undermine the viability of numerous Oregon small businesses. Specifically, we urge the Oregon Health Authority (“OHA”) to find a path forward that would enable safe production of cannabis extracts to continue without undue interruption during the licensure start-up phase.

Background on the Problem

In 2015, the Oregon Legislature passed House Bill 3400, which directed the Oregon Health Authority to license and regulate medical processors of cannabis extracts, concentrates, and edibles. The Oregon Health Authority has been working hard to implement the various pieces of 3400.

The rule making process is still underway, and we understand there is currently no avenue available for licensing medical processors. We understand the opportunity to apply for licensure will begin on April 1st, 2016, and once an application is submitted, additional time will be required for inspections and review.

This situation creates a potential gap in the availability of cannabis extracts for medicinal use. HB 4014 Sec. 39 defines extraction without a license a class B felony. Since there is not yet a process defined in rule making for commercial extract makers to obtain licenses, we understand that many extractors plan to cease operations rather than risk criminal and administrative penalties. This could cause a gap in availability of extracts for medicinal use, and it could drive extract makers out of business.

This outcome would conflict with our legislative intent to provide a smooth transition into thenew regulatory system for medical marijuana patients and for small businesses operating in the legal cannabis space. It would also drive production and sales into the illegal market, conflicting with legislative intent to comply with the Cole Memo.

Possible Solution

There may be a way to resolve this situation by providing a provisional license or some other kind of temporary safe harbor for commercial extract makers that have been operating in compliance with the rules. Oregon has in some instances allowed cannabis sector participants that have applied for permission to undertake an activity to engage in the activity on a temporary basis. The rationale for that approach—to avoid undue disruption to patients and businesses— would be well-served here.

Oregon has allowed applicants to be considered rightful participants with respect to qualification as a “marijuana processing site” in ORS 475B.410(13). The statute defines “marijuana processing site” to include a site that has applied for registration. Similar logic allows Oregon Medical Marijuana Program cardholders to receive protection simply by retaining their certified application copies as part of their “safety packet.” The same approach allows growers seeking an Oregon Liquor Control Commission license or a grandfather determination from OHA to have a provisional stay on plant limit reductions.

We encourage OHA to find a path forward—perhaps using this logic or some other basis—to ensure that rule abiding medical marijuana patients and extract makers are protected from a harmful disruption as we move into our new regulatory system. Thank you for your hard work to protect patients and communities as we evolve our state’s approach to regulating legal cannabis.



Representative Ann Lininger
Co-chair, Joint Committee on Marijuana Legalization

Ginny Burdick Signature

Senator Ginny Burdick
Co-chair, Joint Committee on Marijuana Legalization

Anthony Johnson

Anthony, a longtime cannabis law reform advocate, was Chief Petitioner and co-author of Measure 91, Oregon's cannabis legalization effort. He served as director of both the New Approach Oregon and Vote Yes on 91 PACs, the political action committees responsible for the state's legalization campaign. As director of New Approach Oregon, Anthony continues to work towards effectively implementing the cannabis legalization system while protecting small business owners and the rights of patients. He sits on the Oregon Marijuana Rules Advisory Committee and fights for sensible rules at the legislature as well as city councils and county commissions across the state. Anthony helps cannabis business comply with Oregon's laws and advises advocates across the country. He also serves as content director of both the International Cannabis Business Conference and the Oregon Marijuana Business Conference, helping share the vision of moving the cannabis industry forward in a way that maintains the focus on keeping people out of prison and protecting patients. He was a member of the Oregon Health Authority Rules Advisory Committee, assisting the drafting of the administrative rules governing Oregon’s state-licensed medical marijuana facilities. He first co-authored and helped pass successful marijuana law reform measures while a law student at the University of Missouri-Columbia School of Law. He passed the Oregon Bar in 2005 and practiced criminal defense for two years before transitioning to working full-time in the political advocacy realm. His blogs on Marijuana Politics are personal in nature and don't speak for or reflect the opinions of any group or organization.