OAR 845-025-8590: Suspension, Cancellation, Civil Penalties, Sanction Schedule

(1) The Commission may suspend or cancel: (a) A license issued under ORS 475C.005 to 475C.525 or 475C.548. (b) A marijuana worker permit issued under ORS 475C.273. (c) A research certificate issued under ORS 475C.289. (d) An industrial hemp certificate issued under OAR 845-025-2700 or 845-025-2705. (e) A laboratory license issued under ORS 475C.548. (2) The Commission may cancel a license under ORS 475C.265(1)(a) only when the conduct poses a significant risk to public health and safety. A significant risk to public health and safety includes, but is not limited to: (a) Exercising licensed privileges while the license is suspended, or in violation of restrictions imposed on the license; (b) Allowing minors at a processor license; (c) Prohibited conduct involving a deadly or dangerous weapon or conduct that results in death or serious injury; (d) Prohibited use of pesticides, fertilizers, and agricultural chemicals; (e) Diversion of marijuana, inversion of marijuana, or other conduct described in ORS 475C.185; (f) Transferring or providing adulterated marijuana items or hemp items to a licensee or consumer; (g) Prohibited conduct by laboratory licensees as described in OAR 845-025-5075; (h) Failure to meet testing requirements as described in OAR 845-025-5700 and OAR chapter 333, divisions 7 and 64; (i) Intentionally destroying, damaging, altering, removing, or concealing potential evidence, or attempting to do so, or asking or encouraging another person to do so. (3) Civil Penalties. (a) The Commission may impose a civil penalty under ORS 475C.405. Civil penalties will be calculated by multiplying: (A) The number of days in a suspension, if suspension could be or is being imposed, by $165 for licensees or certificate holders for Category II(b) violations; (B) The number of days in a suspension, if suspension could be or is being imposed, by $250 for licensees or certificate holders for all other violation categories; or (C) The number of days in a suspension, if suspension could be or is being imposed, by $25 for permittees. (b) The Commission may impose for each violation of a provision of ORS 475C.600 to 475C.644 or OAR 845-025-7000 to 845-025-7190, a civil penalty of no more than $500 for each day the violation occurs. (A) For violations of OAR 845-025-7000 to 845-025-7190, civil penalties will be calculated as described in OAR 845-025-7170(2). (B) For violations of OAR 845-025-2800(4)(p), 845-025-2900(4), or 845-025-3220(2)(e): (i) Each violation of a provision of ORS 475C.600 to 475C.648 or a rule adopted thereunder is a separate violation. (ii) Each unit of sale that is in violation of a rule or statute constitutes a separate violation. (iii) Except as provided in subparagraph (iv) of this paragraph, civil penalties will be assessed at $25 per violation with an overall cap of $5,000 for all violations charged concurrently in a single notice . (iv) If a licensee has previously been assessed a civil penalty under this paragraph, in assessing any subsequent civil penalty under this paragraph within a two year period the Commission will double the amount per violation and the overall cap for all violations charged concurrently in a single notice . (4) The Commission uses the following violation categories for licensees licensed under ORS475C.005 to 475C.525: (a) Category I — Violations that make licensee ineligible for a license or pose a significant risk to public health and safety; (b) Category II — Violations that create a present threat or substantial likelihood of a present threat to public health or safety; (c) Category II(b) — Violations for sales to a minor; (d) Category III — Violations that create a potential threat to public health or safety; (e) Category IV — Violations that create a climate conducive to abuses associated with the sale or manufacture of marijuana items; (f) Category V — Violations inconsistent with the orderly regulation of the sale or manufacture of marijuana items. (5) Violation sanctions. (a) The Commission may sanction a licensee, permittee, Commission-certified hemp grower, or Commission-certified hemp handler in accordance with the guidelines set forth in Exhibit 1, incorporated by reference. (b) Exhibit 1 lists the proposed sanctions for single or multiple violations that occur within a two year period for each category described in section (3) of this rule. The Commission may allege multiple violations in a single notice or may count violations alleged in notices issued within the previous two year period toward the total number of violations. In calculating the total number of violations, the Commission may consider a proposed violation for which the Commission has not yet issued a final order. The Commission reserves the right to sanction producer licensees by imposing civil penalties without the option of suspension. (c) The proposed sanctions in Exhibit 1 are guidelines. If the Commission finds one or more mitigating or aggravating circumstances, it may assess a lesser or greater sanction, up to and including revocation. Mitigating circumstances may decrease the penalty but will not dismiss the violation. The Commission may decrease or increase a sanction to prevent inequity or to take account of particular circumstances in the case. The Commission may use a standard 30 percent reduction in sanctions during the settlement process. (d) Mitigating circumstances include, but are not limited to: (A) Making a good faith effort to prevent a violation. Examples of a good faith effort to prevent a violation may include employee training programs, management oversight, and the existence and enforcement of relevant policies. This mitigation factor reduces the sanction by three percent. (B) Cooperation in the violation investigation demonstrating the licensee, permittee, certificate holder, Commission-certified hemp grower, or Commission-certified hemp handler accepts responsibility. This mitigation factor reduces the sanction by five percent. (C) Self-reporting of a violation by a licensee or applicant. This mitigation factor reduces the sanction by seven percent. (D) The licensee or applicant has demonstrated to the satisfaction of the Commission that the conduct that led to the violation is not persistent or serious. This mitigation factor reduces the sanction by three percent. (E) The licensee or applicant has demonstrated to the satisfaction of the Commission a willingness and ability to control the licensed premises and inventory. This mitigation factor reduces the sanction by two percent. (F) The licensee or applicant was not personally involved or aware of the violation occurring. This mitigation factor reduces the sanction by 10 percent. (G) Repeated violations in a two-year period do not qualify for the mitigating factors described in paragraphs (A), (D), and (E) of this subsection on a subsequent violation of the same rule. (e) Aggravating circumstances include, but are not limited to: (A) Receiving a prior warning about one or more compliance problems. This aggravating circumstance increases the sanction by two percent. (B) Repeated failure to comply with laws. This aggravating circumstance increases the sanction by two percent. (C) Failure to use age verification equipment purchased as an offset to a previous penalty. This aggravating circumstance increases the sanction by two percent. (D) Efforts to conceal a violation. This aggravating circumstance increases the sanction by five percent. (E) Intentionally committing a violation. This aggravating circumstance increases the sanction by five percent. (F) A violation involving more than one consumer or employee. This aggravating circumstance increases the sanction by two percent. (G) A violation involving a juvenile. This aggravating circumstance increases the sanction by four percent. (H) A violation resulting in injury or death. This aggravating circumstance increases the sanction by six percent. (I) A violation that occurred at a licensed premises that has been granted a security waiver. This aggravating circumstance increases the sanction by two percent. (f) Aggravating circumstances as described in subsection (e) of this section cannot increase the penalty beyond a maximum penalty of $10,000 per violation. (g) License suspensions that are decreased or increased as described in subsections (c) to (e) of this section will be rounded to the nearest whole number of days. (6) A licensee, certificate holder, Commission-certified hemp grower, or Commission-certified hemp handler may not avoid the sanction for a violation or the application of the provision for successive violations by changing the corporate structure. For example, by adding or dropping a partner or converting to another form of legal entity when the individuals who own, operate, or control the business are substantially similar. (7) For the purposes of these rules, “a violation of this rule” means a violation of any provision of the rule. [ED. 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