Investigation and Enforcement - Oregon Liquor Control Commission

Effective September 20, 2016

OREGON LIQUOR CONTROL COMMISSION
DIVISION 25
RECREATIONAL MARIJUANA

INVESTIGATION AND ENFORCEMENT

Source: Oregon.gov

845-025-8500
Responsibility of Licensee, Responsibility for Conduct of Others
Each licensee is responsible for violations of any provision of ORS 475B affecting the licensed privileges, or these rules and for any act or omission of a licensee representative that violates any law, administrative rule, or regulation affecting the licensed privileges.
Stat. Auth.: ORS 475B.025
Stats. Implemented: ORS 475B.025
845-025-8520
Prohibited Conduct
(1) Sale to a Minor. A licensee or permittee may not sell, deliver, transfer or make available any marijuana item to a person under 21 years of age.
(a) Violation of this section for an intentional sale to a minor by a licensee, permittee or license representative is a Category II violation.
(b) Violation of this section for other than intentional sales is a Category II(b) violation.
(2) Identification. A licensee or license representative must require a person to produce identification as required by ORS 475B.170 before selling or providing a marijuana item to that person. Violation of this section is a Category IV violation.
(3) Access to Premises. A licensee or permittee may not:
(a) During regular business hours for the licensed premises, refuse to admit or fail to promptly admit a Commission regulatory specialist who identifies him or herself and who enters or wants to enter a licensed premises to conduct an inspection to ensure compliance with ORS 475B affecting the licensed privileges; or these rules;
(b) Outside of regular business hours or when the premises appear closed, refuse to admit or fail to promptly admit a Commission regulatory specialist who identifies him or herself and requests entry on the basis that there is a reason to believe a violation of ORS 475B affecting the licensed privileges; or these rules is occurring; or
(c) Once a regulatory specialist is on the licensed premises, ask the regulatory specialist to leave until the specialist has had an opportunity to conduct an inspection to ensure compliance with ORS 475B affecting the licensed privileges; or these rules.
(d) Violation of this section is a Category II violation.

(4) Use or Consumption of Intoxicants on Duty and Under the Influence on Duty.
(a) No licensee, licensee representative, or permittee may consume any intoxicating substances while on duty, except for employees as permitted under OAR 845-025-1230(5)(b). Violation of this subsection is a Category III violation.
(b) No licensee, licensee representative, or permittee may be under the influence of intoxicating substances while on duty. Violation of this subsection is a Category II violation.
(c) Whether a person is paid or scheduled for a work shift is not determinative of whether the person is considered “on duty.”
(d) As used in this section:
(A) “On duty” means:
(i) From the beginning to the end of a work shift for the licensed business, including any and all coffee, rest or meal breaks; or
(ii) Performing any acts on behalf of the licensee or the licensed business outside of a work shift if the individual has the authority to put himself or herself on duty.
(B) “Intoxicants” means any substance that is known to have or does have intoxicating effects, and includes alcohol, marijuana, or any other controlled substances.
(5) Permitting Use of Marijuana at Licensed Premises. A licensee or permittee may not permit the use or consumption of marijuana, or any other intoxicating substance, anywhere in or on the licensed premises, or in surrounding areas under the control of the licensee, except for employees as permitted under OAR 845-025-1230(5)(b). Violation of this section is a Category III violation.
(6) Import and Export. A licensee or permittee may not import marijuana items into this state or export marijuana items out of this state. Violation of this section is a Category I violation and could result in license or permit revocation.
(7) Permitting, Disorderly or Unlawful Conduct. A licensee or permittee may not permit disorderly activity or activity that is unlawful under Oregon state law on the licensed premises or in areas adjacent to or outside the licensed premises under the control of the licensee.
(a) If the prohibited activity under this section results in death or serious physical injury, or involves unlawful use or attempted use of a deadly weapon against another person, or results in a sexual offense which is a Class A felony such as first degree rape, sodomy, or unlawful sexual penetration, the violation is a Category I violation and could result in license or permit revocation.
(b) If the prohibited activity under this section involves use of a dangerous weapon against another person with intent to cause death or serious physical injury, it is a Category II violation.
(c) As used in this section:
(A) "Disorderly activities" means activities that harass, threaten or physically harm oneself or another person.
(B) “Unlawful activity” means activities that violate the laws of this state, including but not limited to any activity that violates a state criminal statute.
(d) The Commission does not require a conviction to establish a violation of this section except as required in ORS 475B.045.
(8) Marijuana as a Prize, Premium or Consideration. No licensee or permittee may give or permit the giving of any marijuana item as a prize, premium, or consideration for any lottery, contest, game of chance or skill, exhibition, or any competition of any kind on the licensed premises.
(9) Visibly Intoxicated Persons. No licensee or permittee may sell, give, or otherwise make available any marijuana item to any person who is visibly intoxicated. Violation of this section is a Category III violation.
(10) Additional Prohibitions. A licensee or permittee may not:
(a) Sell or deliver any marijuana item through a drive-up window.
(b) Sell or offer for sale any marijuana item for a price per item that is less than the licensee’s cost for the marijuana item;
(c) Use any device or machine that both verifies the age of the consumer and delivers marijuana to the consumer; or
(d) Deliver marijuana to a consumer off the licensed premises, except that retail licensees may provide delivery as set forth in OAR 845-025-2880.
(e) Violation of this subsection is a Category III violation.
Stat. Auth.: ORS 475B.025, 475B.070, 475B.090, 475B.100 & 475B.110
Stats. Implemented: ORS 475B.070, 475B.090, 475B.100, 475B.110, 475B.185, 475B.270 & 475B.275
845-025-8540
Dishonest Conduct
(1) False Statements. A licensee or permittee may not:
(a) Make a false statement or representation to the Commission or law enforcement in order to induce or prevent action or investigation by the Commission or law enforcement. Violation of this subsection is a Category II violation.
(b) If the Commission finds that the false statement or representation was intentional, the Commission may charge the violation as a Category I violation and could result in license or permit revocation.
(2) Marijuana Item Misrepresentations.
(a) A licensee or permittee may not misrepresent any marijuana item to a consumer, licensee, or the public, including:
(A) Misrepresenting the contents of a marijuana item;
(B) Misrepresenting the testing results of a marijuana item;
(C) Misrepresenting the potency of a marijuana item; or
(D) Making representations or claims that the marijuana item has curative or therapeutic effects.
(b) A licensee may not treat or otherwise adulterate usable marijuana with any chemical, biologically active drug, plant, substance, including nicotine, or other compound that has the effect or intent of altering the usable marijuana’s color, appearance, weight or smell or that has the effect or intent of increasing potency, toxicity or addictiveness.
(c) A knowing or intentional violation of this section is a Category I violation and could result in license or permit revocation.
(d) Violation of this section in any manner other than knowing or intentional is a Category II violation.
(3) Supply of Adulterated Marijuana Items.

(a) A licensee may not supply adulterated marijuana items.
(b) Violation of this section is a Category I violation and could result in license revocation.
(4) Evidence. A licensee or permittee may not:
(a) Intentionally destroy, damage, alter, remove or conceal potential evidence, or attempt to do so, or ask or encourage another person to do so. Violation of this subsection is a Category I violation and could result in license revocation.
(b) Destroy, damage, alter, remove or conceal potential evidence, or attempt to do so, or ask or encourage another person to do so, in any manner other than intentional. Violation of this subsection is a Category II violation.
(c) Refuse to give, or fail to promptly give, a Commission regulatory specialist or law enforcement officer evidence when lawfully requested to do so. Violation of this subsection is a Category II violation.
Stat. Auth.: ORS 475B.025, 475B.070, 475B.090, 475B.100, & 475B.110
Stats. Implemented: ORS 475B.205
845-025-8560
Inspections
(1) The Commission may conduct:
(a) A complaint inspection at any time following the receipt of a complaint that alleges a licensee or permittee is in violation of ORS 475B or these rules;
(b) An inspection at any time if it believes, for any reason, that a licensee or permittee is in violation ORS 475B or these rules; or
(c) Compliance transactions in order to determine whether a licensee or permittee is complying with ORS 475B or these rules.
(2) A licensee, licensee representative, or permittee must cooperate with the Commission during an inspection.
(3) If licensee, licensee representative or permittee fails to permit the Commission to conduct an inspection the Commission may seek an investigative subpoena to inspect the premises and gather books, payrolls, accounts, papers, documents or records.
Stat. Auth.: ORS 475B.025, 475B.070, 475B.090, 475B.100 & 475B.110
Stats. Implemented: ORS 475B.285 & 475B.635
845-025-8570
Uniform Standards for Minor Decoy Operations
(1) Purpose. ORS 475B prevents anyone who has not reached 21 years of age from obtaining marijuana or marijuana items. It is the Commission's intention that decoy operations are to be an impartial test of a licensee’s ability and willingness to obey laws on preventing sale marijuana or marijuana items to minors.
(2) Uniform standards for minors used in minor decoy operations:
(a) The minor must be under 21 years of age; and
(b) The minor may not use false identification; and
(c) The minor may not lie about their age.

(3) Uniform standards for coordination with law enforcement agencies. The Commission will coordinate with law enforcement agencies to ensure, to the greatest extent possible, that:
(a) Law enforcement agencies are informed of the Commission's uniform standards for minor decoy operations; and
(b) Law enforcement agencies provide the Commission with copies of their minor decoy policies.
(4) In order for the Commission to process violation cases in a timely manner, law enforcement agencies will be encouraged to provide the Commission with the results of any minor decoy operation.
(5) Licensees or any employee of a licensee must immediately return identification presented by the minor decoy upon request of law enforcement or an OLCC representative.
Stat. Auth.: ORS 475B.025 Stats. Implemented: ORS 475B.025
845-025-8580
Suspended Licenses: Posting of Suspension Notice Sign, Activities Allowed During Suspension
(1) Before 7:00 a.m. on the date a license suspension goes into effect, and until the suspension is completed, Commission staff must ensure that a suspension notice sign is posted on each outside entrance or door to the licensed premises.
(2) The suspension notice sign must be posted in a way that allows any person entering the premises to read it. Licensees must use the suspension notice sign provided by the Commission. The sign will state that the license has been suspended by order of the Commission due to violations of the recreational marijuana laws (statutes or administrative rule) of Oregon. If there are multiple licenses at the location, the sign will specify which license privileges have been suspended.
(3) During the period of license suspension, the licensee is responsible for ensuring:
(a) Compliance with all applicable laws and rules; and
(b) That the suspension notice sign is not removed, altered, or covered.
(4) A licensee or licensee representative may not allow the sale, delivery to or from, or receipt of marijuana items at the licensed premises during the period of time that the license is under suspension. During a period of time that the license is under suspension, a recreational marijuana licensee may operate the business provided there is no sale, delivery to or from, or receipt of a marijuana item.
(5) Sanction:
(a) A violation of section (4) of this rule is a Category I violation.
(b) A violation of sections (2) or (3)(b) of this rule is a Category IV violation.
Stat. Auth.: ORS 475B.025
Stats. Implemented: ORS 475B.295 & 475B.635
845-025-8590
Suspension, Revocation, Civil Penalties, Sanction Schedule

(1) The Commission may suspend or revoke:
(a) A license issued under ORS 475B.010 to 475B.395 or 475B.560.
(b) A marijuana workers permit issued under ORS 475B.215.
(c) A research certificate issued under ORS 475B.235.
(2) The Commission may impose a civil penalty under ORS 475B.295. Civil penalties will be calculated by multiplying:
(a) The number of days in a suspension, if suspension could be or is being imposed, by $165 for licensees or certificate holders; or
(b) The number of days in a suspension, if suspension could be or is being imposed, by $25 for permittees.
(3) The Commission uses the following violation categories:
(a) Category I -- Violations that make licensee ineligible for a license;
(b) Category II -- Violations that create a present threat to public health or safety;
(c) Category II (b) – Violations for sales to a minor;
(d) Category III -- Violations that create a potential threat to public health or safety;
(e) Category IV -- Violations that create a climate conducive to abuses associated with the sale or manufacture of marijuana items;
(f) Category V -- Violations inconsistent with the orderly regulation of the sale or manufacture of marijuana items.
(4) Violation sanctions
(a) The Commission may sanction a licensee or permittee in accordance with the guidelines set forth in Exhibit 1, incorporated by reference. Exhibit 1 also contains the categories for the most common violations.
(b) Exhibit 1 lists the proposed sanctions for single or multiple violations that occur within a two year period for each category described in section (3) of this rule. The Commission may allege multiple violations in a single notice or may count violations alleged in notices issued within the previous two year period toward the total number of violations. In calculating the total number of violations, the Commission may consider a proposed violation for which the Commission has not yet issued a final order.
(c) The proposed sanctions in Exhibit 1 are guidelines. If the Commission finds one or more mitigating or aggravating circumstances, it may assess a lesser or greater sanction, up to and including revocation. The Commission may decrease or increase a sanction to prevent inequity or to take account of particular circumstances in the case.
(d) Mitigating circumstances include, but are not limited to:
(A) Making a good faith effort to prevent a violation.
(B) Extraordinary cooperation in the violation investigation demonstrating the licensee or permittee accepts responsibility.
(e) Aggravating circumstances include, but are not limited to:
(A) Receiving a prior warning about one or more compliance problems.
(B) Repeated failure to comply with laws.
(C) Failure to use age verification equipment purchased as an offset to a previous penalty.
(D) Efforts by licensee or permittee to conceal a violation.
(E) Intentionally committing a violation.
(F) A violation involving more than one consumer or employee.
(G) A violation involving a juvenile.

(H) A violation resulting in injury or death.
(I) A violation that occurred at a licensed premises that has been granted a security waiver.
(J) Three or more violations within a two-year-period, regardless of the category, where the number of the proposed or final violations indicate a disregard for the law or failure to control the premises.
(5) A licensee may not avoid the sanction for a violation or the application of the provision for successive violations by changing the corporate structure for example, by adding or dropping a partner or converting to another form of legal entity when the individuals who own, operate, or control the business are substantially similar.
Stat. Auth.: ORS 475B.025
Stats. Implemented: ORS 475B.210, 475B.295, 475B.560 & 475B.635

Exhibit 1, OAR 845-025-8590
Oregon Liquor Control Commission
Recreational Marijuana Sanctions

 

Categories for Most Common Violations

Category 1

Violation:

  • Conviction of a felony (licensee)
  • Operating other than the license permits
  • Intentional false statement to the Commission
  • Intentional destruction or concealment of evidence
  • Intentional failure to pay taxes to Department of Revenue
  • Permitted noisy, disorderly or unlawful activity that results in death or serious physical injury, or that involves unlawful use or attempted use of a deadly weapon against another person, or that results in a sexual offense which is a Class A felony, such as first degree rape, sodomy, or unlawful sexual penetration
  • Failure to notify prior to complete change of ownership/allowed interest in licensed business without prior Commission approval
  • Operated licensed business while suspended

Category 2

Violation:

  • False statement or representation to Commission (other than intentional)
  • Under the influence of intoxicants while on duty
  • Failure to verify the age of a minor (intentional)
  • Failure to promptly admit regulatory specialist or law enforcement into licensed retail premises
  • Destruction or concealment of evidence (other than intentional)
  • Denial of access by law enforcement or regulatory specialist to the licensed premises during regular business hours
  • Permitted noisy, disorderly or unlawful activity that involves use of a dangerous weapon against another person with intent to cause death or serious physical injury
  • Failure to promptly admit regulatory specialist or law enforcement onto the licensed premises when premises appear closed (for producer, processor, wholesale or lab licensees, and research certificate holders)
  • Failure to permit premises or records inspection

Category 3

Violation:

  • Permitted minor to enter or remain in a prohibited area
  • Conviction of a crime other than a felony (licensee)
  • Permitted sales by an employee without a marijuana worker permit
  • Sold or made recreational marijuana available to a visibly intoxicated person
  • Consumption of marijuana, alcohol or other intoxicants while on duty
  • Permitted consumption (by employees, customers or the public) of alcohol, marijuana or other intoxicants on the licensed premises or in areas adjacent to the licensed premises under licensee’s control (such as parking lots)
  • Failure to keep required records (other than as required in 845-025-7500, seed-to-sale tracking requirements)
  • Failure to follow an approved security plan
  • Permitted disorderly activity
  • Permitted unlawful (under state law) activity
  • Failure to complete manifest before transport
  • Failure to pay taxes to the Department of Revenue

Category 4

Violation:

  • Operated the licensed business after lawful hours for sale of marijuana items (retail licensees)
  • Removed, altered or covered license suspension or other required notice sign
  • Advertising violations

Category 5

Violation:

  • Permitted marijuana items to be given as a prize (retail licensees)
  • Failure to notify the Commission of a temporary closure of the licensed business (all licenses and certificates)

845-025-8700
Prohibited Interests in the Marijuana Industry
(1) Definitions. For purposes of this rule:
(a) "Business connections" include, but are not limited to, the following behaviors and relationships:
(A) Knowingly providing anything of value to a business licensed by the Commission in return for something of value except for the exchange of commodities or services that are routinely provided to the general public under the same terms; and
(B) Partnerships with a licensee and similar ventures formed for the purpose of making a profit.
(b) "Employee" means any permanent, temporary or limited duration Commission employee.
(c) "Financial Interest" means knowingly holding an ownership interest as a sole proprietor, partner, limited partner or stockholder, in any marijuana business. This definition excludes any investment that the investor does not control in nature, amount or timing.
(d) "Household member" means all persons living as a family unit in the same dwelling as the commissioner or Commission employee.
(e) "Immediate family" means the spouse, and juvenile dependent children of a commissioner or Commission employee.
(f) “Knowledge” and "knowingly" mean that the person had actual knowledge of or reasonably should have known of the fact in question.

(g) “Marijuana Business” means any business or individual licensed by the Commission under ORS 475B.070, 475B.090, 475B.100, 475B.110 and 475B.560, any business or individual registered by the Authority under ORS 475B.420, 475B.435 and 475B.450 and any business whose primary activity is to provide services to marijuana licensees or registrants.
(h) "Position to take action or make decisions that could affect the marijuana business" means that a commissioner or employee's job duties include the discretion to take actions or make decisions that are reasonably likely to create more than a trivial cost or benefit for a licensed business in money, time or anything else of value
(2) Prohibitions.
(a) Financial Interests. No commissioner, employee, household member or immediate family member may hold a financial interest in a marijuana business.
(b) Employment. No commissioner, employee, household member or family member may be employed by a marijuana business unless the commissioner or employee is not in a position at the Commission to take action or make decisions that could affect the business. An individual is not in a “position to take action or make decisions that could affect the marijuana business" if the Commission removes the employee from actions and decisions affecting the business. The Commission will do so where the removal would not unreasonably effect the employee's ability to perform his or her job duties.
(c) Business Connections. No commissioner, employee, household member or family member may have a business connection described in this rule unless the commissioner or employee is not in a position to take action or make decisions that could affect the licensed business.
(3) Reporting Requirements.
(a) A commissioner or employee who has a business connection association with a marijuana business must:
(A) Inform the Commission of the association as soon as the commissioner or employee has knowledge of the association, and
(B) Refrain from participating in any decision that directly affects the marijuana business.
(b) An applicant for a Commission job must disclose all financial interests, current employment relationships and business connections that the applicant, or any person in the applicant's household or immediate family, has with a marijuana business of which the applicant has knowledge. If the Commission determines that a prohibited financial interest, employment relationship or business connection exists, the applicant must divest the financial interest, employment relationship or business connection before he or she may be hired.
(c) A Commission employee must report all financial interests, current employment relationships and business connections that the employee, or any person in the employee’s household or immediate family, has with a marijuana business to his or her supervisor as soon as the employee has knowledge of it. If the financial interest, employment relationship or business connection is prohibited, the Commission will set a reasonable time period for divestiture. If divestiture does not occur within the given time period, the Commission will terminate the employee's employment.
(4) Disciplinary Action. The Commission will appropriately discipline any employee, up to and including termination, who:

(a) Fails to report a prohibited financial interest, employment relationship or business connection as required under this rule, or
(b) Knowingly acquires or establishes a financial interest, employment relationship or business connection prohibited under this rule.
Stat. Auth.: ORS 475B.025
Stats. Implemented: ORS 475B.025