Oregon cannabis: Why public records laws are important for Oregon cannabis businesses
Every state has some form of public record law. Most of us have probably heard of Freedom of Information Operation (“FOIA”), which is the Federal Open Records Act. According to the Supreme Court of the United States, the purpose of the Freedom of Information Act is to “ensure that citizens are informed, which is vital to the operation of a democratic society. It is necessary to check corruption and hold the governor accountable to the governed.” The purpose of the State Open Records Act is also not exception. In addition to the important role of checking corruption and holding government officials accountable, the open records law can also serve other purposes.
This article discusses how licensees and businesses participating in the Oregon recreational marijuana market—and often do—use the Oregon Public Records Act. The Oregon Public Records Act (“Act”), ORS 192.001 and the following regulations give “everyone” the right to inspect the public records of public agencies, unless specific exemptions apply. (The term “everyone” also includes business entities and partnerships).
The Act applies to the Oregon Alcohol and Cannabis Commission (“OLCC”) because it is a public agency that maintains non-exempt public records. (Side note: Oregon Liquor Control Board recent Change “control” to “marijuana”; we are very happy about it).
The bill is fairly easy to understand. Institutions like OLCC are obliged to provide non-exempt records after receiving a written request. The agency must respond within five working days of receiving the written request to confirm receipt. The bill establishes a baseline for public agencies to complete the response no later than 15 working days after receiving the request. To be sure, there are exceptions to the 15-day period, but these exceptions are very narrow, and public agencies have the responsibility to prove the applicability of the exceptions. The general idea is that the organization must complete its response as quickly as possible without unreasonable delay.
Our company has been involved in cannabis work for many years before OLCC even participated. We have written a lot about the OLCC and its rules governing the licensing of cannabis producers, processors, and retailers in Oregon. (Look here, here, here, here with here …Just to name a few).
When representing cannabis companies, we often require OLCC to provide records under the Act. We do this for many reasons, and each of them can prove that strong public records laws are vital to the Oregon cannabis market.
First – We make public record requests on behalf of clients who find themselves in the wrong ending OLCC enforcement actionAs ordinary readers know, one of OLCC’s many jobs is to enforce the laws and administrative rules governing the recreational marijuana market in Oregon.
When OLCC believes that the licensee is engaged in a violation of the rules, it will issue an allegation document listing the suspected violation and the proposed sanctions. The fee file itself is usually an understatement, focusing on technical management language.
Licensees who receive a notice of proposed cancellation of a license (or a lower fee) need to understand what caused OLCC to issue a fee file, who is involved, and what OLCC believes has happened. The public record request is a foolproof way for OLCC to disclose the documents that are the basis of the fee file.
Although the OLCC case introducer usually provides a basic report to the lawyer informally, the public record request imposes a legal obligation on OLCC to provide the requested information.When the licensee challenges the proposed sanctions and thus begins the administrative hearing process, the public record request is an almost foolproof document discover The licensee must seek tools for recording.
When the document requested by the licensee exceeds the content of the basic report, the requirements under the Act are particularly important. Relevant documents may include internal OLCC emails, the results of actions by licensees in similar situations, or internal OLCC policies and procedures.
In short, the ability to request and obtain public records in a timely manner is an important part of resisting law enforcement actions. .. Or realize that reconciliation is the only real option.
second, We often make public record requests to potential purchasers of licensed cannabis companies. Whether the buyer is entering the market for the first time or a mature multi-state operator looking to increase its holdings in Oregon, every M&A transaction involves (or at least should) conduct some form of investigation on the seller. Griffin Thorne I have been writing articles about cannabis M&A transactions recently. (Look here, here, here, here, here, with here … To name a few).
Part of any (good) transaction is Due diligence period. Although the seller may indicate to the buyer that they have a good reputation with OLCC and have nothing to worry about, this is not always the case. We have seen the transaction break down after a few months of work because either the seller was not completely honest or, in a few cases, was unaware of the adverse actions of OLCC.
The public record request is an important due diligence tool. Potential buyers can learn about the seller’s compliance history, whether OLCC has filed any allegations of violations to the seller and the disposition of these actions, and whether OLCC has any pending investigations or litigation procedures involving the seller. In this regard, public record requests are a powerful option. Buyers can not only understand any potential problems with OLCC, but also understand what kind of people they are dealing with on the other side.
third, We occasionally make public record requests for reasons other than law enforcement procedures or business sales. The reasons vary—sometimes they involve civil litigation in which OLCC is not a party—I will not go into the details. However, having a tool to collect accurate information about specific licensees or other aspects of the Oregon cannabis industry is very helpful for cannabis companies and lawyers. Frankly speaking, for the public.
The point here is that the Oregon Public Records Act serves the public in many ways.
The Oregon legislature may be stingy with OLCC—a surprising treatment for an agency responsible for multimillion-dollar state revenue. What the legislature must be aware of is that funding the OLCC makes it better for Oregon cannabis and better for Oregonians. We urge the Oregon State Legislature to provide OLCC with the funds and tools needed to comply with the Act, and OLCC has been working hard to resolve these issues recently.