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

Pacific Power has announced a new policy of proactively shutting down power if conditions warrant it, in an effort to prevent wildfires. "Public Safety Power Shutoffs may occur with little warning and last for several days. It is currently unknown when these outages may occur; our only indication from Pacific Power is that they will occur during instances of significant wildfire danger (hot, dry, and windy days)," as stated by Hood River County Health Department in a memo to all Licensed Facilities in Hood River County.

The areas affected include Josephine County in southern Oregon (Roseburg, Medford, Grants Pass) and Hood River.  

In Hood River County, health officials announced that food establishments may not operate during prolonged power outages. Within 4 hours of losing power, all food establishments shall cease operating and serving food to the public. Even if a food establishment has a generator, without formal written approval from the County Health office (in advance), no food establishment may operate during a prolonged power outage. Actions may be taken to protect inventories; however, any food exposed to temperature abuse shall be discarded.

Pacific Power has stated:

1. They will alert account holders 3-7 days out when possible
2. They will alert account holders 48 hours in advance, then 24 hours, then 2 hours and then one hour in advance whenever possible
3. Conditions will have to be sustained and will include:

• The presence of dry vegetation and other potential wildfire fuel
• High winds
• Low humidity
• Real time observation from on-the-ground experts
• They will use email, phone and text to alert account holders

If you have questions, please contact Hood River County Health Department directly:

• Ian Stromquist, REHS: 541-387-7130; ian.stromquist@co.hood-river.or.us
• Mike Matthews, REHS: 541-387-7129; mike.matthews@co.hood-river.or.us
• Yolanda Mora: 541-387-6885; yolanda.mora@co.hood-river.or.us

For more information, download the memo from Hood River County Health Department.

Oregon’s lodging tax investments could be drastically reduced if Senate Bill 595 passes.

If successful, SB 595 would eradicate the critical lodging tax reforms of 2003 by taking 30% of our industry’s 70% of any new or increased lodging tax implemented since July 2, 2003, and allowing local governments to redirect those funds for “affordable workforce housing” projects. The result would allow only 40% of new or increased local lodging taxes to be protected for tourism promotion and tourism-related facilities.

ORLA was at the table in November supporting Measure 102, giving communities across Oregon greater flexibility to create the workforce housing they need. ORLA continues to be willing and ready to engage in productive conversations about alternative solutions that can benefit communities and foster economic development without targeting one industry.

The Senate Committee on Housing held a public hearing for SB 595 on February 18. We need lodging industry members to take action now!

Email members of the Senate Committee on Housing and tell them how important the 70% protections are to growing Oregon’s tourism economy. Urge them to consider alternatives to workforce housing initiatives. 

• Senator Shemia Fagan, Chair: sen.shemiafagan@oregonlegislature.gov
• Senator Dallas Heard, Vice-Chair: sen.dallasheard@oregonlegislature.gov
• Senator Jeff Golden, Member: sen.jeffgolden@oregonlegislature.gov
• Senator Tim Knopp, Member: sen.timknopp@oregonlegislature.gov
• Senator Laurie Monnes Anderson, Member: sen.lauriemonnesanderson@oregonlegislature.gov

Read more about the bills ORLA is engaged and/or tracking this session at OregonRLA.org/billtracking.

If you have any questions on this bill, please reach out to me via email at JBrandt@OregonRLA.org or call me directly at 503.302.5060.

Restaurants Who Sell Elouan Wine Should Consider Risks

The OLCC has determined wine producer Copper Cane of California to be misrepresenting Oregon wine geographic designations on its Elouan packaging and sales material, recommending revocation of their Certificate to ship wine into Oregon for resale. Widespread news reports now give restaurateurs knowledge of these misrepresentations and thus liability under the Unlawful Trade Practices Act. The wines are made in California and are not legally eligible to state or infer Oregon American Viticultural Areas on their labels, packaging or advertising material. You may want to consider this risk in selling this product in your restaurants.

• Download OLCC's Notice of Proposed Certificate Revocation
  

News:
Oregon Legislature to consider laws protecting wine industry (1.14.19 - Capital Press)
Copper Cane Controversy (11.1.18 - Oregon Wine Press)

Update 2.13.19 - The Centers for Disease Control (CDC) has officially declared the U.S. outbreak to be over; the FDA continues to recommend to suppliers and distributors that romaine lettuce be labeled with a harvest location and a harvest date, or labeled as being hydroponically or greenhouse-grown. ​

December 17, 2018 - The FDA, along with CDC, state and local agencies, is investigating a multi-state outbreak of E. coli O157:H7 illnesses linked to romaine lettuce grown in California. Restaurants and retailers should not serve or sell romaine from Monterey, San Benito, and Santa Barbara counties in California. Romaine from outside those regions need not be avoided. 

On December 13, 2018, Adam Bros. Farming, Inc., in Santa Barbara County, recalled products that may have come into contact with water from the water reservoir where the outbreak strain was found. The firm recalled red leaf lettuce, green leaf lettuce and cauliflower harvested on November 27 through 30, 2018. According to the firm, cauliflower was distributed to wholesalers in the U.S.

The Adam Bros. recall has prompted a sub-recall by Spokane Produce Inc. of Spokane, WA. The firm recalled sandwiches and other products under the Northwest Cuisine Creations and Fresh & Local Sandwiches & Green Leaf Filets.
​

• Full U.S. Food and Drug Administration (FDA) Posting
• Full Centers for Disease Control (CDC) Posting

The CDC has posted additional guidance regarding the romaine lettuce recall:
​ 

• Based on discussions with producers and distributors, romaine lettuce entering the market will now be labeled with a harvest location and a harvest date or labeled as being hydroponically- or greenhouse-grown. If it does not have this information, you should not eat or use it.
• If romaine lettuce does have this labeling information, we advise avoiding any product from the Central Coast growing regions of northern and central California. Romaine lettuce from outside those regions need not be avoided.
• Romaine lettuce that was harvested outside of the Central Coast growing regions of northern and central California does not appear to be related to the current outbreak. Hydroponically- and greenhouse-grown romaine also does not appear to be related to the current outbreak. There is no recommendation for consumers or retailers to avoid using romaine harvested from these sources.

National Restaurant Association guidance: 5 Tips to Follow When a Recall Happens.  ​