What’s Legal When It Comes to CBD in Edibles and Alcohol
As new trends and topics in the alcohol industry emerge, the OLCC strives to keep current on these issues. Recently, there has been significant interest throughout the industry in the use and sale of cannabidiol (CBD) items on liquor-licensed premises. The Agriculture Improvement Act of 2018 (also referred to as the 2018 Farm Bill) was partially responsible for generating this interest because a part of the bill removed “hemp” and its derivatives from the definition of “marihuana” in the Controlled Substances Act. Although the 2018 Farm Bill established some regulatory authority for hemp under the U.S. Department of Agriculture (USDA) and the Federal Food and Drug Administration (FDA), this piece of legislation did little to explain or clarify the legal status of CBD and CBD products. Due to this uncertainty, the next few paragraphs will attempt to explain the complexities of this issue and help to answer a few questions about CBD products and OLCC liquor licensees.
What is CBD?
First, it is important to understand what CBD is and where it comes from. CBD is a non-intoxicating chemical compound (called a cannabinoid) that can be derived from cannabis plants. Because both hemp and marijuana come from the same plant (cannabis) they are both interchangeably referred to as cannabis, but there is an important legal distinction. Whether a cannabis plant is considered hemp or marijuana depends upon the amount of tetrahydrocannabinol (THC) the plant contains. THC is, of course, the cannabinoid responsible for the psychological effects associated with marijuana consumption. For a cannabis plant to be considered hemp, it must contain less than 0.3 percent THC, otherwise the plant is considered marijuana. Because marijuana is still considered to be a Schedule I controlled substance by the federal government, the source of the CBD is important. Even if a finished CBD product contains 0 percent THC, if the CBD was derived from a plant that contained more than 0.3 percent THC and is therefore marijuana, the CBD is considered a marijuana derivative. In Oregon, marijuana and all marijuana derivatives may only be sold by a licensed recreational marijuana retail store or medical marijuana registrant. For OLCC liquor licensees, the source of the CBD is also important because permitting the use or sale of a marijuana item on a liquor-licensed premises is a violation that could result in a license suspension or civil penalty.
Although the CBD must be derived from hemp, not all hemp products contain CBD. Hemp stalks and seeds contain only trace amounts of CBD and have been legally used in food and beverages prior to the passage of the 2018 Farm Bill. The CBD used in many popular products is commonly extracted from the flowers and leaves of the hemp plant. The remainder of this article refers to CBD derived from hemp.
What Conduct is Prohibited?
Despite the current lack of legal clarity, federal agencies have provided guidance on two types of conduct that are prohibited. First, the FDA, which regulates food products and food safety, has determined that selling or offering to sell a food or beverage item containing CBD in interstate commerce is illegal. For OLCC liquor licensees to comply with federal law, they should not purchase CBD products that were produced in another state.
Second, the Alcohol and Tobacco Tax and Trade Bureau (TTB), which regulates the manufacture and sale of alcoholic beverages, has determined it will not approve any alcoholic beverage formulas that contain CBD. Because obtaining formula approval is required to produce an alcoholic beverage with a non-traditional ingredient (such as hemp), all alcoholic beverages manufactured with CBD are prohibited. This means that all OLCC licensees that manufacture alcoholic beverages are prohibited from adding CBD during the production of the beverage or prior to bottling. To help clarify the agency’s position, the OLCC has proposed a rule change that would make it a violation for any OLCC liquor licensee to manufacture, store, or sell any alcoholic beverage that contains cannabinoids or any substance derived from cannabis, including cannabis terpenes. If adopted at the December Commission Meeting, the rule would apply to all license types and be effective January 1, 2020.
What about Non-Alcoholic CBD Products?
The two other common questions received by the OLCC on this issue involve non-alcoholic CBD products. Licensees are particularly interested in mixing non-alcoholic CBD beverages with alcohol in a mixed drink for on-premises consumption and are also interested in selling non-alcoholic CBD products on liquor-licensed premises.
In Oregon, hemp production is regulated by the Oregon Department of Agriculture (ODA). The ODA has adopted rules that govern products made with hemp, including items intended for human consumption. Under ODA rules, those food and beverage items made with hemp are required to be tested in the same manner that marijuana food items are tested in Oregon. This means that an OLCC licensed laboratory or equivalent lab must receive samples from each process lot of the hemp items and the lab must test those products to ensure they meet certain standards regarding pesticides, solvents, and potency. Because people are going to be consuming these products, it is extremely important to make sure that these items have been tested.
Because the effect of mixing CBD and alcohol is currently unknown, the OLCC recommends that licensees do not mix CBD and alcohol together into mixed drinks for on-premises consumption. If a licensee chooses to do so, it is done at the licensee’s own risk. If a licensee would like to sell a non-alcoholic CBD item on a liquor-licensed premises, the licensee must obtain a copy of the lab report showing that the product was properly tested according to the ODA’s rules. If any licensee is currently selling any CBD products that have not been properly tested, the licensee should have removed all non-compliant products from their inventory by December 31, 2019.
The OLCC is publishing guidance documents on the OLCC website to help explain what types of activities may occur on a liquor-licensed premises. The guidance is split into five categories: alcohol manufacturing, wholesale and distribution, liquor store sales, sale of alcohol at retail, and testing requirements. The guidance is meant to help provide clarity for a very complex issue. These documents are scheduled to be available by the end of December and will be updated if rules or policies change. If you have questions, please visit the OLCC website at Oregon.gov/OLCC or contact the OLCC. | Jamie Dickinson, Oregon Liquor Control Commission
This article originally published in the Oregon Restaurant & Lodging Association Magazine - Winter 2020
Oregon Restaurant & Lodging Association to Honor Six Restaurant Industry Members
[Wilsonville, OR] – Oregon Restaurant & Lodging Association (ORLA) is proud to announce the 2020 state winners of the National Restaurant Association Educational Foundation’s (NRAEF) Restaurant Industry Awards. Two restaurants, Elephants Delicatessen (Portland) and Sybaris Bistro (Albany) were named state winners for the Restaurant Neighbor Award. Loretta Guzman (Bison Coffee House, Portland), Jason Devrouax (First Burger, Albany), and Lauro Romero (Kimpton Hotel & Restaurant Group, Portland) were named state winners for the Faces of Diversity Award. Paul Paz (WaitersWorld, Portland) was named state winner for the Ambassador of Hospitality Award.
“The involvement and dedication these restaurants have shown in support of local philanthropy is commendable and exemplifies the spirit of our industry and our state,” said Jason Brandt, ORLA President & CEO. “It’s an honor to recognize these restaurants as well as four individuals who have achieved success through perseverance and passion.”
Nine out of 10 restaurants give back to their communities through charitable activities. Restaurants also play an important role in providing a ladder of opportunity for millions of Americans to achieve the American Dream.
Each year, the NRAEF recognizes restaurants around the country for outstanding community service, diversity and leadership. These prestigious national awards honor restaurants that go above and beyond in supporting their community and inspiring others with their stories of success.
All state winners were forwarded to NRAEF in consideration for national awards to be announced early March. Three national Restaurant Neighbor Award winners will receive a $10,000 award to help support their favorite charity or community project. Three national winners of the Faces of Diversity Award will have a $2,500 scholarship awarded in their name to an aspiring student from their state. In addition, all national winners will be flown to Washington, DC to receive the award at a special banquet on March 4, 2020.
Oregon’s award recipients will be formally recognized among their peers during the ORLA Hospitality Conference, this year in Ashland, September 28-29, 2020.
For more information on Oregon's restaurant awards, visit OregonRLA.org/restaurant-awards.
ProStart Teacher's Education Session Fall 2019 Resources
In November 2019, Metro's Sustainability and Food Waste team gave a presentation to ProStart teachers on food systems, food waste and climate change. The following resources are made available to teachers for use in their culinary classrooms.
Plan, Shop, Chop (PSC)
In this interactive simulation, students plan and shop for a meal of their choosing and then calculate and discuss the impact when an average of 40% of food is wasted in the United States. Topics include greenhouse gas emissions, use of landfill space, and loss of natural resources, human labor, and money, as well as generating solutions to prevent food waste at home. The lesson includes optional extensions to investigate the food waste hierarchy and examine the supply chain of a common food item, the banana.
Plan, Shop, Chop Lesson:
Banana Supply Chain:
Living with Food in the 21st Century
This two-part lesson guides participants through a new story of climate change using a lens of hope, equity, community resilience, and increased quality of life. After discussing the basics of climate science with graphs and personal stories, participants will use an interactive concept map and short video series to understand the link between consumer culture and climate disruption. They will then investigate a range of individual and collective actions to combat climate change through a ranking activity with drawdown solutions and a climate justice mixer.
Additional Resources from the Oregon Department of Education (ODE)
At their most recent meeting, the Oregon Restaurant & Lodging Association (ORLA) Board of Directors voted unanimously (with 1 abstention) to support a legislative bill which will originate from Governor Brown’s office in support of a permanent 1.8% statewide lodging tax rate during the 2020 Oregon Legislative Session. Revenue raised by the statewide lodging tax is invested in Travel Oregon’s efforts to strengthen the economic impact of our state’s tourism industry. Oregon’s statewide lodging tax is currently collected at a rate of 1.8% with a reduction in the rate scheduled to take effect as of July 1, 2020 to a permanent rate of 1.5%.
“We appreciate Governor Brown’s proactive outreach to meet with ORLA and some of our key lodging stakeholders in person to discuss the merits of keeping the statewide lodging tax rate at 1.8% permanently,” said Jason Brandt, President & CEO of ORLA. “Our goals for lodging tax rate structures in Oregon are two-fold – protecting all statewide lodging tax resources to create return on investment for the industry through the efforts of Travel Oregon and protecting local lodging tax reforms passed in the 2003 Legislative Session.”
Oregon continues to experience healthy growth in tourism spending logging our ninth consecutive year of industry growth in 2018. Compared to 2017, visitor spending was up 4.2% reaching a record $12.3 billion. Industry employment was also up year over year by 2.9% to approximately 115,400. Year over year, hotel room revenue increased by 4.4% as well.
“We have seen firsthand what strategic investments in tourism promotion can do when industry tax dollars are put to their most effective use,” said Brandt. “With many other competing priorities in the Capitol, it is essential the association protects the appropriate use of these dollars at both the local and state levels. The economic impacts we are seeing are significant not just for our industry but for our public sector partners as well.”
The U.S. Travel Association tracks statewide economic impact throughout the country and assists states in quantifying the value of year over year tourism growth. The most recently available data notates Oregon’s tourism growth at 5.3% when comparing 2016 to 2017, further substantiating the value of healthy tourism growth for Oregon’s public sector. From 2016 to 2017, Oregon experienced visitor spending growth of $652 million. That increase in spending and associated payroll income tax increases equates to as many as 410 firefighter positions, 380 police officer positions, or 380 teacher positions.
ORLA continues to focus on the protection of local lodging tax dollars for tourism promotion and tourism related facilities in addition to support given to Governor Brown’s upcoming legislative bill for the statewide resource. Oregon’s local lodging tax structure can be complicated with over 110 different city and county jurisdictions collecting a transient lodging tax outside of the 1.8% statewide tax. Important guidelines have been in place for the past 16 years for how local lodging tax dollars can be spent. To clarify those parameters, ORLA recently produced a new instructional video to assist all stakeholders and the general public in better understanding the rules which govern local lodging tax resources.
The new video specific to local lodging taxes (not to be confused with Oregon’s 1.8% statewide lodging tax) can be viewed here:
For more information about the Oregon Restaurant & Lodging Association’s policies on transient lodging taxes, please reach out to Greg Astley, ORLA’s Director of Government Affairs, at email@example.com via email.