Oregon Marijuana Wholesaler License

What Is a Marijuana Wholesaler License in Oregon?

A marijuana wholesaler license permits the licensee to procure marijuana items from Oregon Liquor Control Commission (OLCC)-licensed cultivators, processors, and transfer, deliver, transport, or sell, including sale by auction of the marijuana items to other licensed wholesalers, research certificate holders, retailers, and non-profit dispensaries. The license does not permit holders to sell, transfer, deliver, or transport whole, non-living marijuana plants to retailers and non-profit dispensaries.

Pursuant to Oregon Administrative Rules OAR 845-0225-3500, a licensed wholesaler may also transfer, deliver, transport, or sell:

Immature marijuana plants and seeds to producers
Usable marijuana to the licensed producer, which has been stored on the producer's behalf
Trade samples as permitted under OAR 845-025-1330
Inventory from retailers as permitted under OAR 845-025-2800(5)
Marijuana waste to processors, producers, other wholesalers, or research certificate holders
Usable marijuana, cannabinoid extracts, and concentrates to licensed processors

A licensed wholesaler in Oregon may trim entire non-living plants and useable marijuana on behalf of a producer licensee, provided that both the wholesaler and producer licensee adhere to all relevant regulations, including documenting all transactions and packing of marijuana items in the Cannabis Tracking System (CTS), and:

Trimming is done at the licensed premises of the wholesaler; or
Trimming is done at the licensed premises of the producer, and the licensed wholesaler holds a "For a Hire Trimming Privilege" as outlined in OAR 845-025-3505

Note that Oregon does not define "marijuana item" to include a mature marijuana plant.

Does Oregon License Marijuana Wholesalers?

Yes. The wholesale of marijuana and marijuana items are subject to regulation by the Oregon Liquor Control Commission (OLCC). Pursuant to the Oregon Revised Statutes ORS 475B.100, marijuana wholesalers can only conduct businesses legally in Oregon if the OLCC has granted them wholesaler licenses. A marijuana wholesaler must possess a wholesaler license issued by the OLCC for the premises where marijuana items are received, stored, or delivered.

How to Apply for a Marijuana Wholesaler License in Oregon?

To obtain a wholesaler license from the OLCC, the applicant must apply for the license in the manner described in ORS 475B.040. The applicant must provide proof of being over the age of 21, and meet the requirement of any rule adopted by the OLCC under Subsection 3 of ORS 475B.100. No applicant may propose locating a wholesaler premises in an area zoned exclusively for residential use.

An application for a wholesaler license must include the name and other required information for all individuals who are considered applicants as set forth in OAR 845-025-1045 and persons who are not applicants but who have "financial interests" in the wholesaler business, as defined in OAR 845-025-1015.

If a legal entity is the applicant, the following persons must also be included as applicants on the wholesaler application:

All limited partnership partners
All limited liability company members
All corporate entity directors and senior officers

At least one applicant, or all applicants stated on a license application, must be the legal owner of the company for which the license is being sought. The OLCC will not consider an individual or legal entity to be directly involved in the ordinary course of business for the wholesaler establishment sought to be licensed based on:

Being a director, shareholder, member, or limited partner
Being an independent contractor or employee
Engaging in issues that are not in the ordinary course of business, such as amending organizational documents of the wholesaler establishment, making distributions, changing the establishment's corporate structure, or approving transactions beyond the ordinary course of business as stated in the entity's organizational documents

The OLCC will consider an individual applicant or applicant legal entity to be a legitimate owner of the business if:

The individual applicant or applicant legal entity applicant owns at least 51% of the business proposed for licensing; or
One or more individual applicants or applicant legal entities collectively own at least 51% of the business proposed for licensing

In and of themselves, the following do not constitute ownership according to the OLCC rules:

Convertible promissory notes
Options to acquire an ownership interest that may be exercised in the future
Preferential rights to distributions based on the return of capital contribution
Security interests in an ownership interest

Note that the OLCC may consider factors other than those listed in determining whether a legal entity or individual is directly or indirectly involved in operating or managing a wholesaler establishment in Oregon. An individual listed on a wholesaler application or identified as an applicant must maintain Oregon residency while the wholesaler business is licensed. As part of the wholesaler licensing application, an applicant must complete theMarijuana Applicant Questionnaire, which helps the OLCC identify individuals and legal entities who qualify for the marijuana wholesaler license.

Upon verifying the identifies and qualifications of persons or entities to be listed on an application, it is recommended that you carefully review in its entirety, the Oregon Administrative Rules 845-025, available on the Oregon Secretary of State website. You can avail yourself of updated rules (if any), notices of proposed rule-making, and enforcement activities on the OLCC website.

Before applying for a wholesaler license from the OLCC, you should ensure that your proposed establishment will comply with the local rules in the municipalities where it will be located. Although the OLCC regulates most of Oregon's recreational marijuana industry, state law permits local governments to adopt reasonable regulations to restrict cannabis activities within their jurisdictions.

Many Oregon municipalities do not allow certain license types within their county or city borders. A list of county and municipal-wide bans on cannabis licenses can be found on the OLCC website. Note that some cities may have regulations that are contrary to their surrounding counties. Local rules may also restrict your wholesaler establishment's operation hours, access requirements, noise and odor limits, location areas, and waste management practices.

An applicant must submit a valid Land Use Compatibility Statement ("LUCS") as part of the OLCC's license application procedure. The LUCS is the OLCC's method of verifying that each application has examined and obtained permission from local county or municipal land use regulations. Applicants must bring the LUCS to their local planning department for signing, likely resulting in the notification of a necessary land use application. The OLCC will not consider an application that does not include a valid LUCS; therefore, it is critical to get an authorized land use application.

Also, each jurisdiction has its own set of zoning and building development regulations. For instance, recreational marijuana wholesaler premises are often permitted in industrial zones but not in rural residential land zones. Certain zones may necessitate the issuance of a conditional use permit. Proof of lawful possession of the premises proposed for licensure is mandatory as the OLCC will not accept applications without a lease or evidence of property ownership. The majority of jurisdictions have a planning and building department that can help determine which rules and land use applications apply; hence, it is recommended that you contact the county or clerk office in your jurisdiction to verify the applicable land use regulations.

If you have a lease or ownership interest in a property that complies with local regulations and a valid LUCS, you can proceed to complete the rest of the application using the application forms on the OLCC website. There are three forms on the OLCC website for wholesaler applicants: The marijuana wholesaler application form, a supplemental form - wholesaler medical purposes registration form, and the for-hire trimming privilege form.

The supplemental form is for a recreational marijuana wholesaler who intends to register with the OLCC to sell marijuana for medical purposes. This registration permits wholesalers to purchase medical-grade cannabinoid products from wholesalers and processors registered to sell marijuana for medical purposes. The registration also enables the wholesaler to offer medical-grade cannabis products to other registered wholesalers, processors, and retailers.

The for-hire trimming privilege form is only applicable to the wholesaler seeking to dry or trim usable marijuana on behalf of a licensed producer at the producer's licensed premises using mobile trimming equipment that will be located on the producer premises. Note that this form is not required if you are a wholesaler who receives whole harvested plants from a producer and performs trimming at the licensed wholesaler premises.

It is crucial that you thoroughly examine each form before completing the papers; making false claims to the OLCC may result in a license application being denied and, in some instances, applicants being barred from applying for marijuana licenses in the future. The forms will require specific information about applicants, applicants' spouses, and any individual or entity "financially involved" in the proposed marijuana wholesaler establishment. The OLCC's broad definition of "financial interest" includes investors, lenders, and sometimes landlords.

The OLCC will also conduct criminal background checks on all financially interested individuals, so ensure disclosures in your application are correct. For an individual listed on the application as an applicant or a person with a financial interest, the information or fingerprints for a criminal background check in accordance with OAR 845-025-1080 will be required. In addition, an Individual History Form and any information identified in the form are also required.

Subsequently, you will be required to provide sufficient floor drawings illustrating the structure of your company, including planned storage places for marijuana products, the position of each entry point, the location of your alarm sensors, and the direction of your cameras. The OLCC places a premium on security, so carefully examine the application forms and Division 25 regulations. Additionally, note the distinctions between the criteria stated on the forms and those outlined in the Division 25 regulations.

The OLCC sometimes includes legislative limitations via its forms; hence, it is always prudent to plan for the most conservative restrictions to guarantee a smooth application process. In the wholesaler application form, for example, an applicant must submit a map or sketch of the proposed premises for licensure, including defined premises boundaries, a scaled floor or plot plan sketch of all enclosed areas, and the location of any primary residence located on the same tax lot as the licensed premises. You can access the OLCC-provided Premises Map Instructions for detailed information about the information needed in the map to be submitted.

A wholesaler license application must also include an operational plan that demonstrates, at the very least, how the applicant's planned facilities and business will comply with the relevant laws and regulations regarding:

Security
Product transportation
Employee qualifications and training
Preventing minors from entering the wholesaler's licensed premises
Preventing minors from acquiring or attempting to acquire marijuana items

When you have completed the LUCS, OLCC forms, and other required paperwork, you may log in to the OLCC portal and begin uploading the application papers. Follow the registration prompts and steps, including providing your establishment's contact information. You may upload the OLCC forms through the portal. Review your information and data for accuracy before paying the non-refundable application fee and submitting the application online. If the OLCC has preliminary questions regarding your application or an investigator is ultimately assigned to conduct a full examination, the Commission will notify you through the email address you used to register. Log in to the OLCC portal regularly to check on the progress of your application and pay careful attention to interactions with the OLCC; failing to meet response dates to OLCC inquiries may result in a license application rejection.

Following receiving an application for a marijuana wholesaler license in Oregon, the OLCC will review the application for compliance with Chapter 1, Oregon Laws 2015, Chapter 614, Oregon Laws 2015, and Division 25 requirements. The OLCC will inspect the proposed premises before issuing the wholesaler license. If the OLCC finds that an application did not follow the necessary regulations during the inspection, the applicant will be given a notice of the failed inspection and the unsatisfied requirements.

If an applicant fails an inspection, the applicant has 15 calendar days from the day the OLCC issued the notice to submit a written response showing that the defects listed in the notice have been remedied. A request in writing for one extension of the 15-day time limit may be submitted but will not exceed 30 days. If the plan of correction seems to correct the deficiencies, the OLCC will schedule a new inspection date. If the applicant fails a second inspection, the OLCC is authorized to deny the application except where the applicant shows good cause for the OLCC to perform further inspections.

If the OLCC determines that an application complies with the required rules, the OLCC will notify the applicant in writing that the application has been approved. After the license fee payment, the OLCC will also provide the applicant with proof of licensure that will include a unique license number, the effective date of the license, date of expiration, and a description of premises for which the license has been issued. Note that a wholesaler licensee:

Must display proof of licensure in a prominent location on the licensed premises, such as the entrance of the establishment
Must not commence operations until on or after the effective date of the license
May not use transfer the license to another person or entity except as provided in OAR 845-025-1160
Licensure is only valid for the premises specified on the license and is only issued to the persons or entities listed on the application or subsequently approved by the OLCC

An applicant may withdraw a wholesaler license application at any time before the OLCC acts on it unless the Commission determines that the applicant provided false or misleading information. In such instances, the OLCC may refuse to accept the withdrawal and issue a notice of proposed denial in accordance with OAR 845-025-1115.

The OLCC is currently not accepting new applications for the wholesaler license or any cannabis license category. Due to concerns over the perceived oversupply of cannabis and a myriad of applications, the OLCC paused the processing of new applications on June 15, 2018. Only applications received on or before that date are being considered for review and possible license issuance. At the moment, it is unclear when the OLCC will begin accepting new applications. However, when the OLCC starts processing new applications, the Commission may implement additional criteria to guide the issuance of new licenses, guarantee that market conditions stay steady, and that OLCC resources are not overstretched.

You can stay up to date on the licensing window and other requirements by regularly checking the OLCC marijuana licensing page or contacting the OLCC at (503) 872-5207, (800) 452-6522, or by mail at Marijuana.Licensing@oregon.gov.

How Much Do Marijuana Wholesaler Licenses Cost in Oregon?

Per[ OAR 845-025-1060], a marijuana wholesaler license in Oregon costs $4,750. Upon submitting the license application, the applicant is also required to pay a non-refundable fee of $250. The license fee is due upon approval of the application. The OLCC only permits electronic payments for the application fee. However, the Commission may be able to accept cash for the license fee.

To pay the license fee in cash, you must schedule an appointment. Setting up an appointment may take time to arrange, possibly resulting in the delay of license approval. The OLCC online portal is compatible with the majority of credit cards. Cash cards in large amounts are available at various local retail locations across the state and may be used to simplify your e-government service experience with the OLCC.

An Oregon marijuana wholesaler license is renewable every year, with the renewal fee the same as the initial license fee ($4,750). Pursuant to OAR 845-025-1190, a licensee must renew the wholesaler license at least 20 days prior to the date the license expires. A licensee who fails to file a renewal application at least 20 days before the licensure expiration must stop engaging in any licensed wholesaler activities when the license expires.

Can Marijuana Wholesaler Licensees Hold Other Cannabis Licenses in Oregon?

Yes. A licensed marijuana wholesaler may acquire other cannabis licenses in Oregon. Marijuana wholesaler licensees may acquire cannabis producer, processor, and retailer licenses.