Author: Alex J. Berger, Shareholder; Leticia Maskell, Law Clerk

On March 20, Governor Kotek signed HB 4121 into law, which first and foremost extends the moratorium on new adult-use cannabis licenses, which was set to sunset on March 30. HB 4121 also includes significant changes to Oregon’s hemp industry.

Marijuana License Moratorium Extension and Caps: HB 4121 extends the current moratorium on new cannabis production, processor, wholesaler, and retailer licenses passed the original March 30, 2024 sunset date, to December 31, 2024, after which the new license cap system will go into effect.

The Act establishes a permanent cap on the per capita number of licenses in Oregon (counting residents 21 years or older). The caps are:

• 1 license per 7,500 residents for production and retail licenses; and
• 1 license per 12,500 residents for processor and wholesaler licenses.

The licensing cap will not apply to renewal applications, or new licenses resulting from a change in location or ownership, so purchases of existing licenses should not be affected.

Given the high number of active licenses already out there, and the ability to renew licenses and transfer licensed businesses, it’s unlikely that the overall number of licenses will fall to the cap numbers anytime soon.

Expanded Industrial Hemp Inspections: Also, per HB 4121, effective immediately, the Oregon Dept. of Agriculture (ODA) and Oregon Liquor and Cannabis Commission (OLCC) must adopt rules to allow for joint inspections of ODA-licensed industrial hemp premises and for law enforcement to accompany ODA inspectors. The Governor may order the Oregon National Guard to assist with inspections, as well.  This is likely included to further curtail the use of industrial hemp licenses to grow illegal cannabis.

Industrial Hemp Product Registration: Finally, effective, January 1, 2026, the Act requires OLCC to establish a registration program for cannabinoid-containing finished industrial hemp products intended for human or animal consumption or use, which would include hemp CBD and other hemp products that contain any cannabinoid.  So domestic and out-of-state cannabinoid hemp product manufacturers, packagers, and distributors, must maintain compliance with the registration regime, to sell a finished product at retail or to a retailer for final sale.

Please contact Emerge directly with any questions or concerns about potential business impacts.