On October 11, the Oregon Liquor Control Commission (“OLCC”) filed emergency rules banning the sale of flavored vaping products in Oregon for the six-month period beginning on October 15, 2019. The rules follow an October 4 executive order from Governor Kate Brown, which directed the agencies to adopt emergency rules banning the sale of “all flavored vaping products.” The Oregon Health authority has filed similar rules covering nicotine vaping products. Oregon’s ban closely follows a similar ban in Washington this week. New York and Michigan have also moved to ban flavored vaping products, and Massachusetts banned all vaping products last month.

The emergency rules add OAR 845-025-2805 to the Oregon Administrative Rules covering cannabis. Beginning on October 15, 2019, the OLCC will prohibit processors from making, and retailers from selling, cannabinoid vaping products that contains a “flavor” or a “non-marijuana terpene.” “Flavor” is defined as any “artificial or naturally-occurring substance that contains a taste or smell, other than the taste or smell of cannabis, that is distinguishable by an ordinary consumer either prior to or during the inhalation of the product, including, but not limited to, any taste or smell relating to chocolate, cocoa, menthol, mint, wintergreen, vanilla, honey, nut, fruit, any candy, dessert, alcoholic or non-alcoholic beverage, herb, spice or concept flavor.” “Non-marijuana terpene” means “a terpene or terpenoid derived from a source other than marijuana.”

Violations of OAR 845-025-2805 are Category I violations, which can be grounds for immediate suspension or cancellation of a license. The OLCC indicated in a press conference that they may do a soft rollout of sanctions against violators, including warning letters or fine, but this is not reflected in the rule text.

How the agencies will enforce this ban is unclear – terpenes that occur naturally in marijuana are also found in other botanicals. The use of non-marijuana terpenes, which are cheaper and do not require an OLCC license to produce, is common in the industry. Determining the source of a particular terpene in a vaping product presents an acute challenge for state labs that are already struggling to tell the difference between marijuana and hemp.

The OLCC will consider any “public statement or claim, whether express or implied, made or disseminated by the licensee or licensees responsible for the manufacture of a cannabinoid vapor product, or by any person authorized or permitted by the manufacturer to make or disseminate public statements concerning such products, that a product has or produces a taste or smell other than a taste or smell of cannabis” (emphasis added) to be presumptive evidence of the use of a flavor or non-marijuana terpene. Note that the underlined text in the preceding sentence likely include employees and contractors hired to do social media or other advertising. Licensees need to keep a close watch on advertising on a go-forward basis, and should also be diligent about scrubbing past posts or ads that make such claims.

The emergency rules do contemplate a process whereby the OLCC can approve requests by processors to add non-marijuana terpenes to vapor products, “so long as every component of the terpene compound is naturally found in cannabis.” The rules mandate that the OLCC will establish form and manner to submit such requests on or before November 15, 2019. The language indicates that a licensee, rather than an unlicensed manufacturer of non-marijuana terpenes, must drive the approval of a particular additive. It is not clear from the rule whether the approval of a particular additive would be limited to its use by the licensee for which it was approved, or if approval for use would allow any licensee to then use the approved additive.

The OLCC has posted a compliance bulletin that answers some of the practical questions around the implementation of the ban. Lane Powell’s cannabis team is closely monitoring this situation as it develops. Please contact us with questions about how the ban affects Oregon businesses.