# Answorth, Inc. v. OLCC

> Court of Appeals of Oregon · October 29, 2025 · 344 Or. App. 470

URL: https://www.frixlaw.com/law-library/cases/11197207

## Case

- **Court:** Court of Appeals of Oregon
- **Decided:** October 29, 2025
- **Citations:** 344 Or. App. 470
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** Ortega
- **Cited by:** 1 later opinions in the Frix Law Library

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## Opinion text

470 October 29, 2025 No. 934

IN THE COURT OF APPEALS OF THE
STATE OF OREGON

In the Matter of Marijuana Processor
License No. 1003825DB95 held by:
ANWORTH, INC.;
Devan Anthony, Pres/Dir/Stkhldr;
and Sally Alworth, Sec/Dir/Stkhldr,
dba Luminous Botanicals,
Petitioners,
v.
OREGON LIQUOR AND CANNABIS COMMISSION,
Respondent.
Oregon Liquor and Cannabis Commission
2019MJM001;
A177206
Argued and submitted January 9, 2024.
Kevin J. Jacoby argued the cause for petitioners. Also on
the opening brief were Andrew DeWeese and Green Light
Law Group. Also on the reply brief was Jacoby Law.
Peenesh Shah, Assistant Attorney General, argued the
cause for respondent. Also on the brief were Ellen F.
Rosenblum, Attorney General, and Benjamin Gutman,
Solicitor General.
Before Ortega, Presiding Judge, Powers, Judge, and
Hellman, Judge.
ORTEGA, P. J.
Affirmed.
Cite as 344 Or App 470 (2025) 471

ORTEGA, P. J.
On judicial review of an administrative contested
case, ORS 183.482, petitioners challenge an order of the
Oregon Liquor and Cannabis Commission (OLCC) that
denied petitioners’ label application and imposed a penalty
of $100,000 for transferring marijuana items for sale that
had unapproved labels. On appeal, petitioners raise four
assignments of error. We first reject petitioners’ procedural
challenge to the order, because any error was invited. As
to the denial of petitioners’ label application and the label
violations, we conclude that OLCC’s interpretations of the
applicable rules are plausible and thus due deference and
further conclude that OLCC’s final order is supported by
substantial reason. Finally, as to the penalty amount, we
reject petitioners’ contention that OLCC was not authorized
by statute to assess a penalty per marijuana item trans-
ferred with an unapproved label. Accordingly, we affirm.
I. BACKGROUND
We briefly set out background facts and OLCC’s
ultimate conclusions from its final order below. We discuss
in more detail aspects of that final order in our analysis of
petitioners’ specific assignments of error.
Petitioner Anworth is an Oregon corporation doing
business as Luminous Botanicals and holds a marijuana rec-
reational processor license. Petitioners Anthony and Alworth
comprise Anworth’s board of directors and stockholders. We
refer to petitioners collectively throughout this opinion.
Petitioners process and sell a cannabinoid tincture
called Universal Cannabis Tonic (UCT). Petitioners offer
UCT in three different formulations and in three different
sizes, including a small trial-size. In 2017, petitioners were
packaging the trial-size of UCT in small vials with stopper
caps, as follows:
“There was no writing embossed on, or wrapped around,
each glass vial. Each vial was glued to a folded piece of
cardstock containing labeling information with a dab of
fixed glue between the cap and the cardstock. The card-
stock closed over the vial like a book, but it was not sealed
shut.”
472 Answorth, Inc. v. OLCC

Petitioners sought approval of that style of labeling in 2017,
and, after discussions with OLCC, on June 7, 2017, OLCC
approved that labeling.
In 2018, OLCC adopted new packaging and label-
ing rules. Those rules required that all labeling applications
received on or after August 15, 2018, were subject to the
new rules. However, the rules also allowed for a “sell-down
period” of product from August 15, 2018, to March 31, 2019.
Petitioners understood that, under the new rules, “prod-
ucts in packaging that had previously been approved by the
Commission could be transferred from a processor to a dis-
pensary up through March 31, 2019.”
In July 2018, petitioners submitted a label applica-
tion for its UCT product, including the trial-size, with the
intention of complying with the new 2018 rules. The content
of the cardstock label for the trial-size UCT differed from
the 2017 labels in certain ways; however, how the labels
were affixed to the trial-size vials remained the same—
the cap of the vial was glued to the cardstock label. OLCC
rejected the label for the trial-size UCT. Petitioners resub-
mitted its application in August 2018, which OLCC again
rejected. OLCC’s position was that the label was not affixed
to the trial-size vial because the vial must be physically sep-
arated from the cardstock to use the product. In December
2018, petitioners resubmitted the trial-size UCT labels so
that OLCC could issue a formal appealable denial.
In the meantime, between September 11, 2018, and
March 31, 2019, petitioners transferred to marijuana retail-
ers for sale approximately 34,741 vials of trial-size UCT
products using a cardstock label that OLCC later found was
the unapproved cardstock label petitioners submitted in
2018.
On April 16, 2019, OLCC issued its notice of pro-
posed label denial, and petitioners requested a contested
hearing. After postponements of the hearing, on January 21,
2020, OLCC issued an amended notice that included a pro-
posed civil penalty along with the label denial. Ultimately,
as relevant here, OLCC alleged that, between September 11,
2018, through March 31, 2019, petitioners transferred 34,741
Cite as 344 Or App 470 (2025) 473

trial-size UCT products without an approved label, contrary
to the 2018 rules. That notice proposed a $100,000 civil pen-
alty for petitioners’ alleged labeling violations.
After a contested hearing before an administrative
law judge (ALJ), the ALJ issued a proposed order. Petitioners
lodged exceptions to the proposed order, which were heard
before the OLCC Board of Commissioners. OLCC rejected
petitioners’ exceptions and adopted the ALJ’s proposed order
as its final order. In brief, OLCC concluded that (1) petition-
ers’ 2018 label applications were properly denied “because
there was no label printed on or affixed to the container
holding the marijuana item, as required by OAR 845-025-
7030(1)(a) ([June 1,] 2018)”; (2) petitioners violated OAR 845-
025-7160(1) (June 1, 2018) and OAR 845-025-7170(1), (3),
and (4) (June 1, 2018), “on approximately 100 separate days
from September 11, 2018, through March 31, 2019, when
it sold to retail licensees for ultimate sale to a consumer
approximately 34,741 trial-sized vials of * * * UCT canna-
binoid tincture with labels that had not received approval
from [OLCC]”; and (3) it would assess a $100,000 civil pen-
alty against petitioners for those violations.
Petitioners now seek judicial review of that final
order under ORS 183.482, raising four assignments of error.
We address each assignment of error below.
II. ANALYSIS
A. Procedural Challenge
We first address petitioners’ fourth assignment of
error because it raises a procedural challenge. That chal-
lenge is based on an exchange at the hearing before the
OLCC Board of Commissioners on petitioners’ exceptions
to the proposed order. At that hearing, the OLCC case pre-
senter stated that there had been a settlement offer to peti-
tioners. The following exchange then occurred:
“CHAIR ROSENBAUM: And can you—I don’t know if
it’s on or off the record, and Counsel may object, but could
you tell us what that offer was?
“[OLCC CASE PRESENTER]: [Petitioners’ counsel],
do you object to me telling the Chair what the offer was?
474 Answorth, Inc. v. OLCC

“[PETITIONERS’ COUNSEL]: This is all a bit irreg-
ular because this is all outside the record and all prior to
our involvement. I’m at a bit of a disadvantage here. I—I
suppose that I don’t object to talking about what the offer
was, but the statements about what Mr. Goldberg and
Mr. Schein may have discussed, bother me a bit. Go ahead
and tell them what the settlement offer was, I don’t object
to that.”
The case presenter then disclosed the amount of the settle-
ment offer.
On judicial review, petitioners argue that solic-
iting the amount of the settlement offer, which was not in
the record, was a material error in procedure because OAR
137-003-0655(5) provides the process in contested cases for
introducing new evidence after issuance of a proposed order,
which was not followed here. Petitioners further argue that
the new evidence unfairly influenced the OLCC Board of
Commissioners to adopt the proposed order.
We reject petitioners’ argument because any proce-
dural error was invited by petitioners. “Under the invited
error doctrine, a party who was actively instrumental in
bringing about an alleged error cannot be heard to complain,
and the case ought not to be reversed because of it.” State
v. Kammeyer, 226 Or App 210, 214, 203 P3d 274, rev den,
346 Or 590 (2009) (internal quotation marks omitted). Here,
when asked if he objected to the immediate disclosure of the
settlement amount, petitioners’ counsel acknowledged that
the settlement amount was not in the record but affirma-
tively stated, “[g]o ahead and tell them what the settlement
offer was.” Having done so, petitioners were actively instru-
mental in causing the alleged error that they now complain
about. See id. (“The goal of the [invited error] rule is to
ensure that parties who make intentional or strategic trial
choices do not later ‘blame the court’ if those choices prove to
be unwise.”). As a result, we decline to consider the merits of
petitioners’ argument.
B. Label Denial
We next address petitioners’ second assignment of
error, which challenges OLCC’s denial of the proposed card-
stock labels for the trial-size UCT products. Petitioners set
Cite as 344 Or App 470 (2025) 475

out three arguments: OLCC’s interpretation of the word
“affixed” in OAR 845-025-7030(1)(a) (June 1, 2018), is erro-
neous; OLCC’s final order lacks substantial reason; and
OLCC’s application of the labeling rule in this case is incon-
sistent with its prior practice. As explained below, we reject
each of petitioners’ arguments.
We begin with OLCC’s interpretation of its own rule.
Under ORS 183.482(8)(a), our task is to determine if “the
agency has erroneously interpreted a provision of law.” “An
agency may determine whether the standard established in
a rule has been met in a particular instance by interpreting
the rule in the course of applying it.” Papas v. OLCC, 213 Or
App 369, 377, 161 P3d 948 (2007). “We defer to the agency’s
plausible interpretation of its own rule—including an inter-
pretation made in the course of applying the rule—if that
interpretation is not inconsistent with the wording of the
rule, its context, or any other source of law.” Id. (citing Don’t
Waste Oregon Com. v. Energy Facility Siting, 320 Or 132,
142, 881 P2d 119 (1994)). When determining the plausibility
of an agency interpretation, we apply our usual methodology
and consider the text of the rule in its statutory and regula-
tory context. Tualatin Riverkeepers v. DEQ, 235 Or App 132,
144, 230 P3d 559, rev den, 349 Or 173 (2010) (explaining that
we apply the same analytical framework that we apply to
the construction of statutes).
The labeling rule at issue here, OAR 845-025-7030
(1)(a) (June 1, 2018),1 provided:
“(1) A label required by these rules must:
“(a) Be printed on or affixed to the container holding
the marijuana item or industrial hemp commodity or prod-
uct and printed on or affixed to any outer package or con-
tainer that is used to display the marijuana item or indus-
trial hemp commodity or product for sale or transfer to a
consumer, patient or designated primary caregiver[.]”

1
We apply the labeling rule that was in effect at the time of petitioners’
label application. Since that time, OAR 845-025-7030 has been amended several
times. We note, however, that the current version of OAR 845-025-7030(1)(a) is
identical to the June 1, 2018, rule with the exception that the phrase “marijuana
item or industrial hemp commodity or product” in the 2018 rule now reads “mari-
juana item or hemp item.” Compare OAR 845-025-7030(1)(a) (June 1, 2018), with
OAR 845-025-7030(1)(a) (Jan 1, 2025).
476 Answorth, Inc. v. OLCC

In the final order, OLCC interpreted “affixed” in that rule to
mean “a secure and firm attachment, such that the label is
unlikely to fall off or be removed during transport or normal
use of the product.”
Petitioners argue that OLCC’s interpretation is not
plausible because the word “affix” simply means to physi-
cally attach. They assert that OLCC’s interpretation inserts
words and concepts into the rule that would require a
rulemaking to establish. Petitioners also argue that the con-
text demonstrates that “affixed” in OAR 845-025-7030(1)(a)
(June 1, 2018) was not intended by OLCC to mean “a secure
and firm attachment” because OLCC has promulgated other
rules that expressly use the term “securely affixed” when
that is what is meant.
OLCC, for its part, argues that its interpretation
is plausible because it is based on the plain meaning of
the word “affixed,” citing to dictionary definitions. It also
asserts that the interpretation is consistent with the context
and purpose of the rule, which in turn is consistent with the
label requirements in the statutes.
We conclude that OLCC’s interpretation of its own
rule is plausible. The issue here largely centers on OLCC’s
use of the word “affixed” in OAR 845-025-7030(1)(a) (June 1,
2018), which is not defined by statute or rule. When a word is
not defined by statute or rule, we often turn to dictionary defi-
nitions to aid in our understanding of the plain and ordinary
meaning of the word. Central Oregon Landwatch v. Deschutes
County, 276 Or App 282, 290, 367 P3d 560 (2016). As relevant
in the context of affixing a label to an item, “affix” is defined
as “to attach physically (as by nails or glue) : fasten—usually
used with to * * * .” Merriam-
Webster’s Unabridged Dictionary, http://unabridged.merriam-
webster.com/unabridged/affix (accessed Oct 22, 2025). In
turn, “attach” is defined as “make fast or join (as by string or
glue) : bind, fasten, tie .”
Merriam-Webster’s Unabridged Dictionary, http://unabridged.
merriam-webster.com/unabridged/attach (accessed Oct 22,
2025). Further, “fasten” is similarly defined as “to cause
to hold to something else : attach especially by pinning,
tying, or nailing” and “to cause (parts which are separate)
Cite as 344 Or App 470 (2025) 477

to hold together : make fast and secure.” Merriam-Webster’s
Unabridged Dictionary, http://unabridged.merriam-webster.
com/unabridged/fasten (accessed Oct 22, 2025). Based on
those definitions, the plain meaning of affix, in this context,
is to physically attach or join something to something else.
The definitions also include the concepts that the attach-
ment is secure, such that it remains joined. That is conveyed
by detailing that the attachment is usually by glue or nails
and through the examples of labels on packages and price
tags on articles. Petitioners would have us read the defini-
tion for affix as “physically attach” and stop there. However,
that would require us to ignore the full concept of “affix” as
conveyed through the relevant dictionary definitions.
A dictionary definition is not the end of our inquiry.
Although those definitions aid us in understanding the plain
meaning of words, we must also consider the words in the
context in which they are used. Central Oregon Landwatch,
276 Or App at 290-91. Here, the direct context is that the
rule requires that a label must “[b]e printed on or affixed
to the container holding the marijuana item.” That context
suggests that an affixed label must be secure and not easily
removed, because the rule equates printing a label directly
onto the container (a permanent labeling) with affixing a
separate label onto the container. OLCC’s interpretation is
consistent with how the words are used in the context of the
rule.
We also consider the broader statutory and regu-
latory context. The statutory context is provided by former
ORS 475B.605 (2017), renumbered as ORS 475C.604 (2021),
which addresses labeling requirements for marijuana
items.2 That statute provides that the purpose of the label-
ing requirements is to protect the public health and safety by
ensuring that marijuana products sold for retail are labeled
with the required information. See former ORS 475B.605
(1)(a) (2017) (“As is necessary to protect the public health and

2
We cite to the statute in effect at the time OLCC enacted OAR 845-025-
7030(1)(a) (June 1, 2018). However, we note that the cited portions of former
ORS 475B.605 (2017) are identical to the current version of the statute, ORS
475C.604, with the exception that “inhalant delivery systems that contain indus-
trial hemp-derived vapor items” are now also explicitly included as items covered
by the labeling requirements.
478 Answorth, Inc. v. OLCC

safety, * * * [OLCC] shall adopt rules establishing standards
for the labeling of marijuana items, including but not lim-
ited to * * * [e]nsuring that usable marijuana, cannabinoid
concentrates and extracts, cannabinoid edibles, and other
cannabinoid products have labeling that communicates [cer-
tain required information].”); former ORS 475B.605(3) (2017)
(requiring OLCC to require that marijuana items sold or
transferred by a marijuana retailer are labeled in accor-
dance with subsection (1) and OLCC’s rules); former ORS
475B.605(4)(d) (2017) (providing that OLCC “[m]ay not adopt
rules that are more restrictive than is reasonably necessary
to protect the public health and safety”). OLCC’s interpre-
tation is consistent with that statutory purpose. The pub-
lic health and safety purpose of the labeling requirement
would not be met by labels that are not securely attached to
marijuana items, such that the label was likely to fall off or
be removed during transport or normal use.
The regulatory context provides only slight addi-
tional illumination. An OLCC rule provides that the pur-
pose of the labeling rules “is to set the minimum standards
for the packaging and labeling of marijuana items * * * that
are for ultimate sale or transfer to a consumer * * *.” OAR
845-025-7010(1). OLCC’s interpretation of affix as requiring
a firm and secure attachment is consistent with that general
purpose and its other labeling requirements. Petitioners,
however, assert that in two instances OLCC has used the
term “securely affixed” in its rules and, with that context,
“affixed” must mean something other than securely affixed.
We are not persuaded that those two instances of using the
term “securely affixed” by OLCC in sections of the mari-
juana regulations that are not part of the labeling rules
renders implausible what is otherwise a plausible interpre-
tation by OLCC.3
3
Petitioners cite to OAR 845-025-2880(4)(h) and OAR 845-025-3305(2)(a).
The first rule addresses delivery of marijuana items and requires that “[a]ll mari-
juana items must be kept in a lock-box securely affixed inside the delivery motor
vehicle.” OAR 845-025-2880(4)(h) (Dec 28, 2017). That rule does not provide use-
ful context for the labeling rule at issue here. The second rule addresses labeling
requirements for marijuana items processed directly for a cardholder and that
are not for retail sale. That rule as it existed in 2018 when OLCC promulgated
the rule at issue in this case did not use the term “securely affixed.” Instead, it
simply provided that the processor must “label the package” with the required
statements. OAR 845-025-3305(2)(a) (Dec 28, 2017). In December 2018, OLCC
Cite as 344 Or App 470 (2025) 479

Based on the text and context, we conclude that
OLCC’s interpretation of OAR 845-025-7030(1)(a) (June 1,
2018) to require “a secure and firm attachment, such that the
label is unlikely to fall off or be removed during transport or
normal use of the product” is plausible and due deference.
We thus proceed to address whether OLCC’s final
order was based in substantial reason when it concluded
that petitioners’ proposed labels did not meet the affixed
requirement in OAR 845-025-7030(1)(a) (June 1, 2018). For
its order to be supported by substantial reason, “the agency
must articulate a ‘rational connection between the facts and
the legal conclusions it draws from them.’ ” Jenkins v. Board
of Parole, 356 Or 186, 195, 335 P3d 828 (2014) (quoting Ross
v. Springfield School Dist. No. 19, 294 Or 357, 370, 657 P2d
188 (1982)).
Petitioners argue that OLCC’s conclusion lacks sub-
stantial reason because it conflicts with finding of fact 38 in
the order, which details an exchange with petitioners and
Anthony Geltosky, OLCC’s packaging and labeling special-
ist, about the labels, and the testimony of Geltosky at the
contested hearing, without explaining that conflict.
We reject petitioners’ argument. In the final order,
OLCC concluded that it had shown
“that a reasonable cannabis consumer would likely remove
the cardstock label from the container (i.e., vial) of mari-
juana product during (or before) normal use of the product.
And, because the record persuasively establishes that the
trial-sized UCT vials are not intended to be single-dose
or single-serving size, the likely removal of the cardstock
label from the vial will result in a completely unlabeled
vial of marijuana product, which constitutes a public safety
concern.”
OLCC then provided additional rational explanation that
connected its findings with its legal conclusions that peti-
tioners’ proposed label did not meet the rule requirement
that it be affixed to the container.

amended that rule to provide that the processor must “securely affix a label that
contains the following information.” OAR 845-025-3305(2)(a) (Dec 28, 2018). As
a result, that rule also does not provide useful context of OLCC’s intent when it
promulgated the rule at issue here.
480 Answorth, Inc. v. OLCC

The finding and testimony referenced by petitioner
are not in conflict with that explanation and petitioners do
not explain their position. Instead, in their opening brief,
petitioners modified a quotation from the transcript with
well-placed ellipses to make it appear that Geltosky testified
that the proposed cardstock label qualified as a label under
the rules. That was not his testimony. His testimony was
in response to a question by the ALJ whether the proposed
cardstock label was itself a container under the rules, and
he testified that “I would consider it more akin to a flag or
a hand-tag label—that our rules allow for if the container
itself that’s holding the marijuana item meets certain min-
imum requirements.” That testimony does not demonstrate
that OLCC’s order lacked substantial reason. Further, OLCC
was not required to explain its decision with respect to each
line of testimony or each piece of evidence submitted. See
D. T. v. Dept. of Human Services, 247 Or App 293, 304 n 5, 269
P3d 96 (2011) (“The ‘substantial reason’ test does not require
an agency to expressly reject each of a petitioner’s arguments
or recount all the evidence that the agency considered; rather,
it requires that an agency adequately explain ‘the reasoning
that leads * * * from the facts that it has found to the conclu-
sions that it draws from those facts.’ ” (Quoting Drew v. PSRB,
322 Or 491, 500, 909 P2d 1211 (1996) (emphases in Drew).)).
Finally, we address petitioners’ contention that
OLCC’s decision in this case was inconsistent with its
approval of other labels that were placed into evidence.
Petitioners’ argument centers on two labels for products
purchased at a marijuana dispensary that they put into
evidence at the hearing—one for a fudge bar and one for a
chocolate bar. They asserted that normal use of those prod-
ucts, which were more than one serving, left the remain-
ing unused portion unlabeled and, thus, the approved
labels were not securely affixed to the container containing
the marijuana item. Petitioners assert that the inconsis-
tent treatment of petitioners’ proposed labels in this case
requires reversal and remand for an explanation addressing
the inconsistency.
Under ORS 183.482(8)(b)(B), we will remand an
order to an agency if we conclude that an agency’s exercise
Cite as 344 Or App 470 (2025) 481

of discretion is “[i]nconsistent with an agency rule, an offi-
cially stated agency position, or a prior agency practice,
if the inconsistency is not explained by the agency[.]” In
reviewing an order for consistency, we review “to determine
if the [agency’s] findings, reasoning, and conclusions demon-
strate that it acted in a rational, fair, and principled manner
in deciding” petitioners’ case. Gordon v. Board of Parole, 343
Or 618, 634, 175 P3d 461 (2007).
Here, we question whether petitioners have identi-
fied a relevant prior agency practice that is inconsistent with
OLCC’s decision in this case. Petitioners put into evidence
two candy bars that in normal use could result in an unused
amount being unlabeled; they have not explained how that
labeling is a relevant prior practice given the dissimilarity
of the products. Regardless, in its findings in the final order,
OLCC included its position, as explained by Geltosky, for
treating chocolate bars differently from petitioners’ product.
He explained:
“[T]he chocolate bar is capable of being relabeled and [peti-
tioners’] product is not. A chocolate bar will come packaged
in a fully labeled container that protects the bar. Typically,
when a consumer removes the bar from the packaging, he or
she has the option to put the bar back in its original packag-
ing. To remove the bar, have a single serving, and leave the
bar unpackaged is irresponsible. It is also unlikely because
the longer a chocolate bar is exposed to air, the more it oxi-
dizes. In this scenario, the consumer has the convenient
option to be responsible by placing the bar back in its pack-
aging. In [petitioners’] scenario, the consumer cannot phys-
ically reattach the vial to the labeling without glue or tape
and must go through extra steps to be responsible. These
extra steps increase the risk of unintended ingestion.”
Thus, OLCC did explain any inconsistency in its treatment
of labels for marijuana fudge or chocolate bars and petition-
ers’ product. See Thomas Creek Lumber and Log Co. v. Board
of Forestry, 188 Or App 10, 24, 69 P3d 1238 (2003) (rejecting
argument for remand based on unexplained inconsistency
with prior agency practice where the agency did provide an
explanation for its different action).
We thus affirm OLCC’s denial of petitioners’ pro-
posed cardstock labels for its trial-size UCT products.
482 Answorth, Inc. v. OLCC

C. Label Violations
We next address petitioners’ first assignment of
error, which challenges OLCC’s determination that petition-
ers violated OAR 845-025-7160(1) (June 1, 2018)4 and OAR
845-025-7170(1), (3), and (4) (June 1, 2018),5 “on approxi-
mately 100 separate days from September 11, 2018, through
March 31, 2019, when it sold to retail licensees for ultimate
sale to a consumer approximately 34,741 trial-sized vials * * *
with labels that had not received approval from [OLCC].”
OLCC based that conclusion on its finding that the labels
used for the trial-size UCT that petitioner had transferred
for sale during that period were the labels that petition-
ers had submitted for approval in 2018 that OLCC denied.
Petitioners again raises two arguments: OLCC erroneously
applied the 2018 labeling rules because those rules did not
apply to product sold before April 1, 2019, and OLCC’s order
lacks substantial reason. As explained below, we reject both
of those arguments.
When OLCC promulgated the June 2018 labeling
rules, it provided in OAR 845-025-7190 (June 1, 2018) for a
sell-down period during which products transferred for sale
did not have to comply with the new packaging and labeling
rules. As relevant here, OAR 845-025-7190 (June 1, 2018)
provided:
“(1) These rules become effective on August 15, 2018.
On and after August 15, 2018, all package and label
4
OAR 845-025-7160(1) (June 1, 2018) provided:
“Prior to selling, offering for sale, or transferring a marijuana item or
industrial hemp commodity or product that is for ultimate sale to a consumer,
a licensee, a license applicant or a registrant must submit both a package and
a label application to and receive approval from the [OLCC].”
5
OAR 845-025-7170(1), (3), and (4) (June 1, 2018) provided:
“The Commission may impose a civil penalty of up to $500 per day per
violation for any of the following:
“(1) Failure to comply with these rules.
“* * * * *
“(3) Failing to receive package and label approval prior to transferring,
selling, or offering for sale a marijuana item or industrial hemp commodity
or product that is for ultimate sale to a consumer.
“(4) Transferring, selling or offering for sale a marijuana item or indus-
trial hemp commodity or product that has not received package or label
approval.”
Cite as 344 Or App 470 (2025) 483

applications received by the Commission will be reviewed
and evaluated under these rules.
“(2) All marijuana items and industrial hemp com-
modities and products packaged or transferred for sale to
a consumer on or after April 1, 2019 must be labeled and
packaged according to these rules.”
Before the ALJ, petitioners argued that labels were
subject to the 2017 labeling rules through the sell-down
period, which ended March 31, 2019, and not the 2018 rules
cited by OLCC in its violation notice, and, as a result, OLCC’s
notice was defective. In the final order, OLCC rejected that
argument, interpreting the 2018 rules as they apply to pro-
cessors as follows:
“Labels approved prior to August 15, 2018 and sold through
the March 31, 2019 sell-down period were not subject to the
labeling and packaging requirements of the 2018 new rules
package. However, labels that were not approved prior to
August 15, 2018, and that were nonetheless sold through
March 31, 2019, were not afforded that same exclusion from
the 2018 labeling and packaging requirements. Similarly,
any label application received on or after August 15, 2018
was subject to review and evaluation under the 2018 label-
ing and packaging requirements.”
(Emphasis in original.) On judicial review, petitioners chal-
lenge that interpretation as contrary to the text of OAR 845-
025-7190 (June 1, 2018) and the testimony of one of OLCC’s
witnesses.
In addressing OLCC’s interpretation of its own
rule, under ORS 183.482(8)(a), our task is to determine if
“the agency has erroneously interpreted a provision of law.”
“We defer to the agency’s plausible interpretation of its own
rule—including an interpretation made in the course of
applying the rule—if that interpretation is not inconsistent
with the wording of the rule, its context, or any other source
of law.” Papas, 213 Or App at 377. We again apply our usual
methodology and consider the text of the rule in its statu-
tory and regulatory context. Tualatin Riverkeepers, 235 Or
App at 144. Applying that methodology, we conclude that
OLCC’s interpretation is plausible and due deference.
484 Answorth, Inc. v. OLCC

As relevant here, the plain terms of OAR 845-025-
7190 (June 1, 2018) did two things: the rule made the 2018
labeling rules effective on August 15, 2018, and it provided
a window until March 31, 2019, to sell products that did
not have 2018-compliant packages and labels. However, and
importantly, the sell-down period did not provide a blanket
exemption from the August 15, 2018, effective date of the
2018 labeling rules. Although the sell-down period deferred
compliance with the labeling and packaging requirements
for sold product, it did not defer compliance with the label
preapproval requirements (or defer the effective date of the
civil penalty rule enforcing that requirement). OAR 845-
025-7190(1) (June 1, 2018) expressly provided that preap-
proval applications submitted after August 15, 2018, would
be evaluated under the 2018 rules.6 It is the preapproval
requirement that OLCC concluded petitioners had violated.
OLCC’s interpretation of OAR 845-025-7190(1)
(June 1, 2018), set out above, is consistent with the rule’s
plain text. Additionally, we perceive nothing in the regula-
tory or statutory context that is inconsistent with OLCC’s
interpretation, and petitioners point to none.
We also reject petitioners’ apparent argument that
OLCC could not apply the interpretation of OAR 845-025-
7190 (June 1, 2018) that appears in the final order, because
it was not an interpretation offered by OLCC witnesses at
the contested case hearing before the ALJ. Contrary to peti-
tioners’ assertion, OLCC is free to adopt as its own an ALJ’s
interpretation in a proposed order. That is what OLCC did
in this case when the Board of Commissioners rejected peti-
tioners’ exceptions to the ALJ’s proposed order and adopted
it as OLCC’s final order. When we give deference to an
agency interpretation of its own rules, we are giving def-
erence to interpretations by those at the agency who have
policy-making authority. See, e.g., Clardy v. Gangitano, 334
Or App 213, 221-22, 556 P3d 642, rev den, 373 Or 154 (2024)
(stating that deference “applies only to interpretations ren-
dered by agency personnel who possess interpretive author-
ity”); OR-OSHA v. Loy Clark Pipeline Co., 320 Or App 205,

6
We also note that petitioners do not dispute that the label preapproval
requirement predated the 2018 labeling rules.
Cite as 344 Or App 470 (2025) 485

210, 514 P3d 544, rev den, 370 Or 471 (2022) (“[D]eference is
owed only to the authority that promulgated the rule, not to
interpretations by those without policy-making authority.”).
The OLCC Board of Commissioners is the policy-making
authority for OLCC and the interpretation in the final order
is its interpretation. See ORS 471.705(1) (OLCC consists
“of nine commissioners appointed by the Governor”); ORS
471.720 (the OLCC administrator “shall be subject to pol-
icy direction by the commissioners”); ORS 475C.017 (setting
out powers and duties of OLCC with respect to marijuana
regulation). OLCC was not required to explain why its inter-
pretation of its own rule differed from the opinion of a staff
witness that appeared at the contested case hearing.
Finally, we reject petitioners’ substantial reason
challenge. For an order to be supported by substantial reason,
“the agency must articulate a rational connection between the
facts and the legal conclusions it draws from them.” Jenkins,
356 Or at 195 (internal quotation marks omitted).
Here, OLCC determined that petitioners violated the
2018 labeling rules by transferring products for sale with
unapproved labels after August 15, 2018—specifically,
between September 11, 2018, and March 31, 2019. That
determination was based on OLCC’s findings of fact that the
labels used on the products transferred between those dates
were not the same labels that OLCC approved for petition-
ers’ trial-size UCT product in 2017 and, instead, that the
labels were the same labels that OLCC had denied approval
for in 2018.7 OLCC did articulate a rational connection

7
OLCC found:
“From September 11, 2018 through March 31, 2019, [petitioners] trans-
ferred approximately 34,791 trial-sized vials of its UCT cannabis tincture to
licensed retailers for sale to consumers. The folded cardstock labels accom-
panying those trial-sized vials differed from any previously approved tri-
al-sized cardstock labels in the following ways:
“1) the product identity was listed as a ‘Cannabinoid Tincture;’
“2) the lettering of the product identity was in bold font;
“3) the product identity was located in approximately the middle of the
front cardstock page;
“4) [petitioners’] license number was on the back cardstock page;
“5) the driving warning stated, ‘Do not drive a motor vehicle while under
the influence of marijuana;’
486 Answorth, Inc. v. OLCC

between the facts it found and its legal conclusions, having
explained:
“The trial-sized UCT vials that [petitioners] ultimately
transferred for sale during the period September 1[1], 2018
through March 31, 2019 had labels that differed in eight
ways from the previously approved 2017 trial-sized labels.
Contrary to [petitioners’] repeated assertions, the tri-
al-sized labels that [petitioners] sold during the sell-down
period were not the previously approved trial-sized labels
with simply a new product identification and two or three
inadvertent and insignificant changes. In fact, the tri-
al-sized UCT labels that [petitioners] sold from September
11, 2018 through March 31, 2019 were the very labels that
[petitioners] had submitted for OLCC approval in July 2018
(with the intention that they be reviewed under the 2018
rules), August 2018, and December 2018—labels which
OLCC denied.”
(Emphasis omitted.)
On judicial review, petitioners argue that OLCC’s
order lacks substantial reason because it does not square
with petitioners’ preferred interpretation of OAR 845-025-
7190 (June 1, 2018) and finding of fact 15. We reject that
argument because OLCC’s interpretation of that rule is
plausible and entitled to deference. Additionally, we see
nothing in finding of fact 15 that supports petitioners’ argu-
ment that OLCC’s order lacks substantial reason.8
Petitioners also articulate for the first time on judi-
cial review that the final order lacks substantial reason

“6) the caution language stated, ‘Cannabinoid products can take up to 2
hours or more to take effect;’
“7) the first listed ingredient was ‘Cannabis flower;’ and
“8) there was no nutritional information listed.”
(Footnote and record citations omitted.) OLCC also found that “[t]he trial-sized UCT
cardstock labels that Mr. Geltosky observed on April 17, 2019 at the three retail
stores were all materially the same as the trial-sized cardstock labels that [peti-
tioners] had submitted for OLCC approval in July, August, and December 2018.”
8
Finding of fact 15 provides:
“The new rules create a special ‘sell-down’ period from August 15, 2018 to
March 31, 2019, applicable to processors such as [petitioners]. (Test. of Sweet
and Dickinson; see OAR 845-025-7190(2); see also Ex. A40.) The sell-down
period was not intended to allow a processor to sell labels that were non-
compliant with, and not approved under, the former rules. (See test. of
Sweet.)”
Cite as 344 Or App 470 (2025) 487

because the order merely assumes that the changes to
the labels negated petitioners’ 2017 label approval, with-
out conducting an analysis under the 2017 rules to deter-
mine whether those changes would have been permitted by
those rules.9 Even setting aside the lateness of petitioners’
articulation of that argument, we reject it as insufficiently
developed. Petitioners do not cite to any 2017 rules at all, let
alone rules that demonstrate that the unapproved changes
they made to their labels were permitted by their 2017 label
approval. Instead, in their reply brief, petitioners cite to OAR
845-025-7160(7) (June 1, 2018),10 a rule they assert would
allow the changes they made to the labels without resubmit-
tal for approval, and then state, “[i]t stands to reason that
if the 2018 rules allow certain non-material changes to pre-
viously approved labels without requiring re-approval, the
prior rules likely did as well.” As to the 2018 rule, petition-
ers do not explain how OLCC’s decision lacks substantial
9
Petitioners assert that they raised this issue in their exceptions to the
ALJ’s proposed order that they presented to the OLCC Board of Commissioners.
We conclude, however, that petitioners did not raise this issue. In the exceptions,
petitioners argued that the changes to the labels were changes that the 2018
rules allowed without resubmittal, specifically OAR 845-025-7160(7) (June 1,
2018). Petitioners did not directly argue, making only a passing statement in that
direction in a footnote, that OLLC was required to evaluate their labels under the
2017 rules to determine if they were approved labels, despite the changes made
to the labels. And, more importantly, petitioners never identified any 2017 rules
that supported their position that the labels were approved, despite the changes.
10
OAR 845-025-7160(7) (June 1, 2018) provides:
“Packages and labels that have been previously approved do not need to
be resubmitted if the only changes to the packaging or label are:
“(a) Changes in the:
“(A) Harvest or processing date;
“(B) Strain;
“(C) Test results;
“(D) Net weight or volume; or
“(E) UID numbers.
“(b) The deletion of any non-mandatory label information.
“(c) The addition, deletion or change in the:
“(A) UPC barcodes or 2D mobile barcodes (QR codes);
“(B) Website address, phone number, fax number, or place of address of
the licensee or registrant; or
“(C) Instructions for opening or using child-resistant packages.
“(d) The repositioning of any label information on the package, as long as
the repositioning of label information is consistent with these rules.”
488 Answorth, Inc. v. OLCC

evidence or contains legal error when it rejected petitioners’
argument that the changes were permissible under the 2018
rule without resubmittal of the label, which was the argu-
ment petitioners made in their exceptions to the ALJ’s pro-
posed order. As the 2017 rule, petitioners’ speculation about
the likely effect of an unspecified 2017 rule does not demon-
strate that OLCC’s final order lacks substantial reason,
particularly when petitioners failed to raise that argument
below.
OLCC’s final order articulates a rational connec-
tion between the facts it found and its legal conclusions.
Petitioners have not challenged any of OLCC’s findings of
fact as lacking substantial evidence, including OLCC’s find-
ings that the labels were not the 2017 approved labels, but
were, in fact, the 2018 labels that OLCC rejected. Nor have
petitioners explained a basis on which we could conclude
that OLCC’s order lacks substantial reason.
We thus reject petitioners’ first assignment of error.
D. Penalty Amount
Finally, we address petitioners’ third assignment
of error. In that assignment petitioners argue that OLCC
exceeded its discretion in imposing a $100,000 penalty for
the labeling violations because that amount is not autho-
rized by former ORS 475B.655(1) (2017), renumbered as ORS
475C.644(1) (2021).11 Because petitioners’ assignment is
grounded in their contention that former ORS 475B.655(1)
(2017) compels a particular method for calculating a penalty,
we review for an error of law. See ORS 183.482(8)(a) (provid-
ing that a court may reverse or remand an agency order “[i]f
the court finds that the agency has erroneously interpreted
a provision of law and that a correct interpretation compels
a particular action”); Springfield Education Assn. v. School
Dist., 290 Or 217, 227, 621 P2d 547 (1980) (“The dispositive
question of law on review, under this section, is whether the
agency action is within the legislative policy which inheres
in the statutory term.”).
11
We cite to the version of the penalty statute in effect at the time of peti-
tioners’ alleged violations. However, we note that former ORS 475B.655 (2019) is
substantively identical to the current version of the statute, ORS 475C.644.
Cite as 344 Or App 470 (2025) 489

In the final order, based on OLCC written policy,
OLCC concluded that petitioners’ violations were Category
III violations, which were subject to a penalty of $400 per
day per violation, with the total penalty amount capped at
$100,000. OLCC determined that the $400 per day per vio-
lation applied to each of the 34,741 items transferred with
unapproved labels.
On judicial review, petitioners argue that, under
former ORS 475B.655(1) (2017), OLCC could not assess the
penalty on a per unit basis. They argue that the plain text
provided that the metric for civil penalties is the number of
days a violation occurs and not the number of units involved
in the violation. As a result, petitioners assert that the max-
imum penalty that could be imposed is $35,200 (88 days
times $400).
We are thus required to determine whether, under
former ORS 475B.655(1) (2017), OLCC could assess the
penalty as it did. That statute provided that OLCC “may
impose for each violation of a provision of ORS 475B.600
to 475B.655, or a rule adopted under a provision of ORS
475B.600 to 475B.655, a civil penalty that does not exceed
$500 for each day that the violation occurs.”12 Nothing in
ORS chapter 475B provided further guidance on what con-
stitutes “the violation” that can be assessed “each day.”
However, OLCC has promulgated a rule specific to
assessing penalties for labeling violations. The version of
the rule that applied at the time of petitioners’ violations
provided:
“The Commission may impose a civil penalty of up to
$500 per day per violation for any of the following:
“(1) Failure to comply with these rules.
“* * * * *
“(3) Failing to receive package and label approval prior
to transferring, selling, or offering for sale a marijuana

12
Similarly, OLCC’s then-applicable general penalty rule provided that
OLCC “may impose for each violation of a provision of * * * OAR 845-025-7000
to 845-025-7190, a civil penalty of no more than $500 for each day the violation
occurs.” OAR 845-025-8590(2) (Dec 28, 2018).
490 Answorth, Inc. v. OLCC

item or industrial hemp commodity or product that is for
ultimate sale to a consumer.
“(4) Transferring, selling or offering for sale a mari-
juana item or industrial hemp commodity or product that
has not received package or label approval.”
OAR 845-025-7170 (June 1, 2018). That rule, by its plain
terms, permits a civil penalty “per day per violation,” with a
violation including a failure to receive approval before sell-
ing “a marijuana item.” In the final order, OLCC cited that
rule and applied the rule’s plain text when it determined
that a penalty could be assessed for each violation—the
34,741 items transferred with unapproved labels—which
triggered the $100,000 penalty cap.
On judicial review, petitioners fail to address the
text of OAR 845-025-7170 (June 1, 2018) or explain how
OLCC’s application of that rule here is inconsistent with
former ORS 475B.655(1) (2017), besides simply stating that
it is. We will not make arguments for petitioners that they
have failed to make for themselves. We are not persuaded
that OLCC’s application of OAR 845-025-7170 (June 1,
2018) is inconsistent with the plain text or legislative policy
expressed in former ORS 475B.655(1), and we reject peti-
tioners’ third assignment of error.
As a result, we affirm OLCC’s final order.
Affirmed.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11197207. Public record. Not legal advice.