Oregon wants to make online marijuana regulation a chill experience

Oregon wants to make online marijuana regulation a chill experience

Oregon is trying to create an online marijuana license and registration system that is a little more IRS and a little less special forces, according to Nathan Rix, a policy analyst for Oregon’s Liquor Control Commission (OLCC).

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“What we’re trying to do is create an atmosphere where you can come into our regulated system and it will feel much more like an IRS audit than a SWAT team because we want you in the regulated market,” Rix said. That is sometimes a tough sell, he said, when you have people who are used to avoiding rather than complying with the law.

The key to getting people into the regulated market, Rix said, is their first experience with filing an application to apply for a license to sell, grow, produce, process or lab test marijuana. The second experience involves the use of radio frequency ID (RFID) tags that track the product. And the third is with the OLCC staff when they look at a grower’s inventory, Rix said.

Oregon, the third state to legalize recreational marijuana, had the benefit of learning from Washington and Colorado before it teamed up with NIC for user-friendly application licensing and with Franwell for producer-friendly seed-to-sale tracking. Oregon, like states before it, turned to companies with backgrounds in industries that translated well into online marijuana processing and regulation.

NIC already processes all of Oregon’s other ecommerce work, enabling the state to “kill two birds with one stone,” in the IT compliance department, Rix explained. NIC’s system allows retailers to apply for new licenses or renew existing ones, pay fees by credit card and pay taxes on the marijuana they sell, according to OLCC officials.

Franwell, which developed Colorado’s marijuana tracking system, has been using its radio frequency ID technology (developed for perishable agriculture and airfreight cargo) to break into the marijuana plant tracking market. Still, as Franwell CEO  Jeff Wells told GCN in an interview last year, tracking produce isn’t exactly the same as dealing with marijuana because the latter comes with such a high level of regulation.

“In all of our experience, and we’ve been working in supply chains for a few decades, I don’t know another system that exists where a regulatory body is assigning a serial number for each and every box of cucumbers, for example," Wells said. "But, then again . . . it's not federally illegal [to grow and ship] cucumbers.”

The RFID data trail uses tags that are assigned when the plant is just a sprout, Rix explained. “We’re going to require each licensee put an electronic tag on a marijuana product. We’ll start with a small plant. And then that tag will follow the plant all the way through the life cycle of that plant, so that when it goes to be harvested, we will follow that batch. And then when it is turned into an oil or edible product, they get a new tag and then they go with that new tag to the retail outlets.”

When it comes to monitoring compliance online, the OLCC has asked NIC and Franwell to create an interface that will provide real-time licensee data to inform investigations. “The benefit of that for the licensing system on the regulatory side [comes in] if we have any problems like a tag goes missing or we suspect a person is diverting products,” Rix said. “If we have a reason to suspend a license, we can do it all electronically without having to use a single piece of paper.”

It’s a system that also functions as a public health safety monitor. When a plant dies, the producer is required to enter in the reason. If large batches die it might be a more significant problem that the public needs to know about, according to Rix. “It’s not just for compliance and enforcement work. If we find there is an illness going around or problem with manufacturing we can do a product recall.”  

One of the major challenges OLCC faced when trying to get a solid system up and running was the state’s changing policies while it sorted out exactly how regulation of a new business would work -- a problem most states with some form of legalized marijuana are facing. OLCC said it hired NIC and Franwell because they were very willing to develop a system while laws were still being made.

About the Author

Suzette Lohmeyer is a freelance writer based in Arlington, Va.

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