Today we take a moment to reflect on a significant event that paved the way for a still-standing cannabis market in Oregon, USA. A market of which the entire-state community relies upon for alternative and holistic healing solutions, and harbors the livelihood of many passionate and diligent business owners.
August 24th marks one year since Oregon’s cannabis industry took home a consequential win saving the bulk of all legal cannabis crops. Faced with an administrative rule that threatened business vitality across the market, Petitioners including the Cannabis Industry Alliance of Oregon and a list of cannabis growers, processors, and distributors, challenged the Oregon Health Authority (OHA) and Oregon’s Liquor & Cannabis Committee (OLCC) in a lawsuit to retract a testing requirement for the common and universally-spread mold known as Aspergillus. Amid a series of economic downturns, the cannabis community could not weather against hostile regulations that were inevitably proven to cause irreparable harm.
On March 1st, 2023, a permanent rule amendment went into effect requiring testing procedures for Aspergillus mold in cannabis. A requirement not imposed on any other agricultural product producers, including products intended for human inhalation such as tobacco-Aspergillus is endemic to Oregon and world–wide. The spores are airborne, and multiple scientific studies have concluded that avoiding inhalation of Aspergillus in the air is impossible, and that humans routinely inhale Aspergillus simply by going about their daily lives.
While Aspergillus does pose some risk of infection (a condition called aspergillosis, which coincidentally is not a reportable disease in Oregon or federally), the risk is limited to a small number of immunocompromised individuals. Despite this limited risk and the ubiquitous nature of these four species of Aspergillus, the rule challenged in this proceeding required Petitioners to ensure that their cannabis products are completely free of any trace Aspergillus nucleic acids – not just that there is an insufficient quantity of organisms to become infectious, normally counted as colony-forming units (“CFU”) or by most probable enumeration (“MPN”), but that there is not a single, errant fragment of Aspergillus nucleic acid in the batch sample whatsoever, including the nucleic acids of dead organisms and non-viable spores.
In other words, because of the Aspergillus Testing Rule, Petitioners were expected to ensure that their products are cleaner than the air Oregonians breathe every day, whether indoors in a controlled air environment, such as a hospital, or outdoors in the general environment.
How Was Irreparable Harm Prevented?
The unique medley of administrative law experience as it relates to agriculture generally and cannabis specifically gave Jacoby Law owner Kevin Jacoby an effective approach to untangling the market-threat “zero tolerance policy”. See the full written argument here.
With having practiced administrative and appellate law his entire career, Kevin was quick to identify where the testing rule was legally was questionable. The credit is equally shared with our trusted colleagues and savvy strategists, Todd Key of, JTK Law, Myron Chadowitz of, Cannassentials, Adam Teuscher of, Utokia Farms, Mike Getlin at, Nectar Legal Affairs, Les Helgeson of Green Hills Botanicals, and Jesse Bontecou, Executive Director of Cannabis Industry Alliance of Oregon.
Jacoby Law filed the rule challenge in the Oregon Court of Appeals on July 29, 2023 along with a motion to stay enforcement of the Aspergillus testing rule pending completion of the rule challenge. OHA and OLCC opposed that motion, and on August 24, 2023, the Court of Appeals sided with the Petitioners, issuing an order staying enforcement of the rule after finding that Jacoby Law’s arguments on behalf of the Petitioners was persuasive and that Petitioners had a strong likelihood of success on their argument that the Aspergillus testing rule was legally invalid. In the weeks following the court’s ruling, OHA promulgated a temporary rule that repealed the Aspergillus testing rule, which was made permanent several months later, which rendered Petitioners’ legal challenge to the rule moot. While industry advocates are closely monitoring for any attempts to reprise the Aspergillus testing rule, one year later, the agency has not taken any steps to revisit or reinstate a similar rule.
We are all deeply grateful that this rule was successfully overturned-before severely harming Oregon cannabis. Jacoby Law is honored to have collaborated with such dedicated constituents.
What Does the Future Hold?
Given the demand for industry representation as the nation gradually goes legal, we hope to provide counsel to other recreational markets outside of Oregon experiencing the same administrative litigation issues. Our goal is pitching this development as an example for responsible cannabis policy in any state.
We also recognize the effort put forth by Oregon Health Authority to ensure safe products for consumers and look forward to working closely with OHA on future legislation and rulemaking.
We will continue to draft about currents in Oregon policy as well as stand at the ready for the next critical situation.
