Recreational MarijuanaPlanning Association of

Washington

Alan E Rathbun, Director

Licensing and Regulation Division

April 10, 2014

Agency Objective

LCB Rulemaking Objective• Creating a tightly controlled and regulated marijuana market;• Including strict controls to prevent diversion, illegal sales, and

sales to minors; and• Providing reasonable access to products to mitigate the illicit

market

LCB Role and Responsibilities:• Ensuring public safety is the top priority;• Creating a 3-tier regulatory system for marijuana;• Creating licenses for producers, processors, and retailers;• Enforcing laws and rules pertaining to licensees; and• Collecting and distributing taxes.

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Rules Highlights: License Requirements

30 Day Window

• The LCB opened registration for all license types for a 30 calendar day window

• LCB may reopen application window at its discretion

• Colorado used the same method. Approx. 50 percent folded w/in 18 months

State Residency Requirement

• The LCB requires a three month state residency requirement

– Applies to all license structure types

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Rules Highlights: License Requirements

Background Checks

• Personal criminal history form with license forfeiture if incomplete or incorrect

• Fingerprinting of all potential licensees

• WSP and FBI background checks of licensees and financiers

Point System

• All applicants must disclose all arrests and/or convictions

• Non-disclosure of arrests regardless of conviction will result in point accumulation

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Rules Highlights: License Requirements

Costs and Fees

• $250 application fee

• $1,000 annual renewal fee

• Additional fees for background check and filing for local business license

Taxes

• License applicants must submit a signed attestation that they are current on taxes owed to the Washington State Department of Revenue

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Rules Highlights: Public Safety

Producer Structures

• Draft Rules allow producer operations in secure indoor and outdoor grows, as well as greenhouses

Traceability

• LCB employs a robust and comprehensive traceability system (software) that will trace product from seed/clone to sale

• LCB enforcement can match records to actual product on hand

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Rules Highlights: Public Safety

Background Checks• Personal criminal history form • Fingerprinting of all potential licensees • WSP and FBI back background checks of licensees and financiers

Point system• LCB will apply a disqualifying point system similar to liquor

Security and Safeguards• Alarm and surveillance video camera requirements (including

minimum pixels and lockbox encasement) • Strict transportation and record keeping requirements (no third

party transport of product) • Hours of retail operation limited to 8:00 a.m. to 12:00 a.m.

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Rules Highlights: Public SafetyViolation Guidelines• $1,000 administrative penalty for minors frequenting

• Sets strict tiered system of violation record over a three year period. Example:– Group 1 public safety:

• First violation: 10 day suspension or $2,500

• Second violation: 30 day suspension

• Third violation: license cancellation

• Furnishing marijuana to a minor remains a felony offense

Child Resistant Packaging• Specific requirements for marijuana and marijuana infused

products in solid and liquid forms8

Rules Highlights: Public Safety

Advertising Restrictions • Law restricts advertising within 1,000 feet of schools, public parks, transit

centers, arcades, and other areas where children are present

• May not contain statements or illustrations that: are false or misleading, promotes overconsumption, represents that its use has curative or therapeutic effects, depicts a child or may be appealing to children

• All advertising of any kind for marijuana or marijuana-infused products must contain the statement: “This product has intoxicating effects and may be habit forming.”

Location Restrictions on Retail Stores• LCB to provide advance notice to local authority

• Per I-502, LCB to determine number of retail outlets

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Rules Highlights: Consumer Safety

Strict Packaging and Labeling Requirements

• Limited servings and concentration per package

• Lot number

• Warning label

• Net weight

• Concentration of THC

• Usage warnings (specific warning for ingestible foods and/or liquids about effect delays)

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Rules Highlights: Consumer Safety

Lab Tested and Approved

• All lots will be tested by independent accredited labs

• Established and uniform testing standards

Store Signage and Product Warnings

• No minors allowed in stores

• Required product and usage signs within stores

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Rules Highlights: Consumer Safety

Behind the Counter Storage• No open containers or handling of product (sample jar

permitted under WAC 314-55-105(8))

Defined Serving Transaction Limits (WAC 314-55-095)• Defined serving sizes on marijuana-infused product label

– 10 mg of THC per serving

– 100 mg of THC per product

– 7 grams infused extract for inhalation

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Application Processing:

Opened 8:00 AM November 20, 2013

Closed 5:00 PM December 20, 2013

Master Applications Received: 5,201

Privileges Applications Received: 6,987

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Application Processing Includes:

• Verification of 1,000 foot buffer from Sensitive Areas

• Seeking Input from Local Authorities (Cities, Counties, Tribes, Port Authorities)

• Verification of Residency

• Entity Formed in Washington

• Criminal Background (WSP, FBI, Fingerprints)

• Financial Investigation

• Review operating plan

• Final Inspection of location

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Local Authority (LA) Input

• Notice of Application (Producer and Processor) sent to Local Authority. Similar to the Liquor Procedure

• LA Must Respond Within 20 Days with an approval or objection. May request an extension (In Writing)

• LA Failure to Respond within 20 Day Period will be viewed as “Neutral”

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Objections

• Must be supported

• Will not consider objections based on local land use, ordinance, or existing moratoria

• Applicant will be notified of LA Objections

• Substantial weight given to objections based on chronic illegal activity (RCW 69.50.331(9))

• If license issued over LA objection, LA may be granted an administrative hearing (RCW 34-05)

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Reasons the Board May Seek Denial,Suspension or Cancellation

WAC 314-55-050

• Sixteen Elements

• If the Board seeks denial, applicant is given the opportunity for an administrative hearing

• Administrative hearing held before ALJ who crafts an “Initial Order.” OR Brief Adjudicative Hearing (BAP)

• Board reviews and issues Final Order

• Actions appealable in Superior Court

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Retail Licenses

• 334 locations statewide

• Allocation posted on our website

• Retail Applications Received: 2,210

• A lottery will be performed after pre-screening

• LAs notified after lottery

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Retail Pre-Screening

• Verify 1,000 Foot Separation

• Criminal History

• Verify Residency and Entity Creation

• Verification of Applicant Age

• Verification that Applicant Has a “Right” to the Location

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Retail Lottery

• Protocols and Process and Timeline Announced – Lottery Week of April 21

• LA Notice and Remaining Application Processing After Lottery Selection

• How will Local Permitting and Licensing Processes Impact Retail “Start Up”?

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Current License Issuance Status

• Number of Licenses Issued to Date– Producer: 1

– Producer/Processor: 9

– Total Canopy: 77,064

• Number of Applicants Pending Final Inspection and/or Payment Of Fee– Producer: 6

– Processor: 1

– Producer/Processor: 16

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Current and Pending Issues

• Medical Marijuana

• ESHB 2304

• Bans/Moratoria

• Rule-making Continues– Processor – Infused Drinks and Food

– Retailer – Product Transportation and Return to Processor

– Processor – Extracting Processing

– Third Party Laboratories (Quality Assurance Testing)

– LCB Seizure of Product

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Staying Connected

Visit the I-502 Webpage. www.liq.wa.gov

• Factsheets

• FAQs

• Timelines

• YouTube video and/or audio of public forums

Listserv with over 9,200 subscribers to date

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Thank you

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