SENATE BILL 6136 - Washingtonlawfilesext.leg.wa.gov › biennium › 2015-16 › Pdf › Bills ›...

AN ACT Relating to comprehensive marijuana market reforms to1ensure a well-regulated and taxed marijuana market in Washington2state; amending RCW 69.50.334, 69.50.357, 69.50.369, 69.50.535,369.50.540, 69.50.331, 69.50.445, 69.50.4013, 18.170.020, 69.50.4014,466.08.050, 69.50.101, 69.51A.---, 69.51A.085, 69.50.530, 69.50.204,569.50.430, 69.50.---, 28B.20.502, 43.350.030, 42.56.---, and669.50.342; adding new sections to chapter 69.50 RCW; adding a new7section to chapter 82.08 RCW; adding a new section to chapter 82.128RCW; adding a new section to chapter 42.56 RCW; creating new9sections; repealing RCW 69.51A.085 and 69.50.425; prescribing10penalties; making appropriations; providing effective dates; and11declaring an emergency.12

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:13

PART I14Intent and Tax Preference Performance Statement15

NEW SECTION. Sec. 101. (1)(a) The legislature finds the16implementation of Initiative Measure No. 502 has established a17clearly disadvantaged regulated legal market with respect to prices18and the ability to compete with the unregulated medical dispensary19market and the illicit market. The legislature further finds that it20

S-3280.2SENATE BILL 6136

State of Washington 64th Legislature 2015 2nd Special SessionBy Senators Rivers, Mullet, and HatfieldRead first time 06/19/15. Referred to Committee on Ways & Means.

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is crucial that the state continues to ensure a safe, highly1regulated system in Washington that protects valuable state revenues2while continuing efforts towards disbanding the unregulated marijuana3markets. The legislature further finds that ongoing evaluation on the4impact of meaningful marijuana tax reform for the purpose of5stabilizing revenues is crucial to the overall effort of protecting6the citizens and resources of this state. The legislature further7finds that a partnership with local jurisdictions in this effort is8imperative to the success of the legislature's policy objective. The9legislature further finds that sharing revenues to promote a10successful partnership in achieving the legislature's intent should11be transparent and hold local jurisdictions accountable for their use12of state shared revenues. Therefore, the legislature intends to13reform the current tax structure for the regulated legal marijuana14system to create price parity with the large medical and illicit15markets with the specific objective of increasing the market share of16the legal and highly regulated marijuana market. The legislature17further intends to share marijuana tax revenues with local18jurisdictions for public safety purposes and to facilitate the19ongoing process of ensuring a safe regulated marijuana market in all20communities across the state.21

(b) The legislature further finds marijuana use for qualifying22patients is a valid and necessary option health care professionals23may recommend for their patients. The legislature further finds that24while recognizing the difference between recreational and medical use25of marijuana, it is also imperative to distinguish that the26authorization for medical use of marijuana is different from a valid27prescription provided by a doctor to a patient. The legislature28further finds the authorization for medical use of marijuana is29unlike over-the-counter medications that require no oversight by a30health care professional. The legislature further finds that due to31the unique characterization of authorizations for the medical use of32marijuana, the policy of providing a tax preference benefit for33patients using an authorization should in no way be construed as34precedent for changes in the treatment of prescription medications or35over-the-counter medications. Therefore, the legislature intends to36provide qualifying patients and their designated providers a retail37sales and use tax exemption on marijuana purchased or obtained for38medical use when authorized by a health care professional.39

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(2)(a) This subsection is the tax preference performance1statement for the retail sales and use tax exemption for marijuana2purchased or obtained by qualifying patients or their designated3providers provided in sections 207(1) and 208(1) of this act. The4performance statement is only intended to be used for subsequent5evaluation of the tax preference. It is not intended to create a6private right of action by any party or be used to determine7eligibility for preferential tax treatment.8

(b) The legislature categorizes the tax preference as one9intended to accomplish the general purposes indicated in RCW1082.32.808(2)(e).11

(c) It is the legislature's specific public policy objective to12provide qualifying patients and their designated providers a retail13sales and use tax exemption on marijuana purchased or obtained for14medical use when authorized by a health care professional.15

(d) To measure the effectiveness of the exemption provided in16this act in achieving the specific public policy objective described17in (c) of this subsection, the department of revenue must provide the18necessary data and assistance to the state liquor and cannabis board19for the report required in RCW 69.50.535.20

PART II21Marijuana Excise Tax, Exemptions, and Distribution of Revenues22

Sec. 201. RCW 69.50.334 and 2013 c 3 s 7 are each amended to23read as follows:24

(1) The action, order, or decision of the state liquor25((control)) and cannabis board as to any denial of an application for26the reissuance of a license to produce, process, or sell marijuana,27or as to any revocation, suspension, or modification of any license28to produce, process, or sell marijuana, ((shall)) or as to the29administrative review of a notice of unpaid trust fund taxes under30section 202 of this act, must be an adjudicative proceeding and31subject to the applicable provisions of chapter 34.05 RCW.32

(((1))) (2) An opportunity for a hearing may be provided to an33applicant for the reissuance of a license prior to the disposition of34the application, and if no opportunity for a prior hearing is35provided then an opportunity for a hearing to reconsider the36application must be provided the applicant.37

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(((2))) (3) An opportunity for a hearing must be provided to a1licensee prior to a revocation or modification of any license and,2except as provided in subsection (((4))) (6) of this section, prior3to the suspension of any license.4

(((3))) (4) An opportunity for a hearing must be provided to any5person issued a notice of unpaid trust fund taxes under section 2026of this act.7

(5) No hearing ((shall)) may be required under this section until8demanded by the applicant ((or)), licensee, or person issued a notice9of unpaid trust fund taxes under section 202 of this act.10

(((4))) (6) The state liquor ((control)) and cannabis board may11summarily suspend a license for a period of up to one hundred eighty12days without a prior hearing if it finds that public health, safety,13or welfare imperatively require emergency action, and it incorporates14a finding to that effect in its order. Proceedings for revocation or15other action must be promptly instituted and determined. An16administrative law judge may extend the summary suspension period for17up to one calendar year from the first day of the initial summary18suspension in the event the proceedings for revocation or other19action cannot be completed during the initial one hundred eighty-day20period due to actions by the licensee. The state liquor ((control))21and cannabis board's enforcement division shall complete a22preliminary staff investigation of the violation before requesting an23emergency suspension by the state liquor ((control)) and cannabis24board.25

NEW SECTION. Sec. 202. A new section is added to chapter 69.5026RCW under the subchapter heading "article V" to read as follows:27

(1) Whenever the board determines that a limited liability28business entity has collected trust fund taxes and has failed to29remit those taxes to the board and that business entity has been30terminated, dissolved, or abandoned, or is insolvent, the board may31pursue collection of the entity's unpaid trust fund taxes, including32penalties on those taxes, against any or all of the responsible33individuals. For purposes of this subsection, "insolvent" means the34condition that results when the sum of the entity's debts exceeds the35fair market value of its assets. The board may presume that an entity36is insolvent if the entity refuses to disclose to the board the37nature of its assets and liabilities.38

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(2)(a) For a responsible individual who is the current or a1former chief executive or chief financial officer, liability under2this section applies regardless of fault or whether the individual3was or should have been aware of the unpaid trust fund tax liability4of the limited liability business entity.5

(b) For any other responsible individual, liability under this6section applies only if he or she willfully failed to pay or to cause7to be paid to the board the trust fund taxes due from the limited8liability business entity.9

(3)(a) Except as provided in this subsection (3)(a), a10responsible individual who is the current or a former chief executive11or chief financial officer is liable under this section only for12trust fund tax liability accrued during the period that he or she was13the chief executive or chief financial officer. However, if the14responsible individual had the responsibility or duty to remit15payment of the limited liability business entity's trust fund taxes16to the board during any period of time that the person was not the17chief executive or chief financial officer, that individual is also18liable for trust fund tax liability that became due during the period19that he or she had the duty to remit payment of the limited liability20business entity's taxes to the board but was not the chief executive21or chief financial officer.22

(b) All other responsible individuals are liable under this23section only for trust fund tax liability that became due during the24period he or she had the responsibility or duty to remit payment of25the limited liability business entity's taxes to the board.26

(4) Persons described in subsection (3)(b) of this section are27exempt from liability under this section in situations where28nonpayment of the limited liability business entity's trust fund29taxes was due to reasons beyond their control as determined by the30board by rule.31

(5) Any person having been issued a notice of unpaid trust fund32taxes under this section is entitled to an administrative hearing33under RCW 69.50.334 and any such rules the board may adopt.34

(6) This section does not relieve the limited liability business35entity of its trust fund tax liability or otherwise impair other tax36collection remedies afforded by law.37

(7) The definitions in this subsection apply throughout this38section unless the context clearly requires otherwise.39

(a) "Board" means the state liquor and cannabis board.40p. 5 SB 6136

(b) "Chief executive" means: The president of a corporation or1for other entities or organizations other than corporations or if the2corporation does not have a president as one of its officers, the3highest ranking executive manager or administrator in charge of the4management of the company or organization.5

(c) "Chief financial officer" means: The treasurer of a6corporation or for entities or organizations other than corporations7or if a corporation does not have a treasurer as one of its officers,8the highest senior manager who is responsible for overseeing the9financial activities of the entire company or organization.10

(d) "Limited liability business entity" means a type of business11entity that generally shields its owners from personal liability for12the debts, obligations, and liabilities of the entity, or a business13entity that is managed or owned in whole or in part by an entity that14generally shields its owners from personal liability for the debts,15obligations, and liabilities of the entity. Limited liability16business entities include corporations, limited liability companies,17limited liability partnerships, trusts, general partnerships and18joint ventures in which one or more of the partners or parties are19also limited liability business entities, and limited partnerships in20which one or more of the general partners are also limited liability21business entities.22

(e) "Manager" has the same meaning as in RCW 25.15.005.23(f) "Member" has the same meaning as in RCW 25.15.005, except24

that the term only includes members of member-managed limited25liability companies.26

(g) "Officer" means any officer or assistant officer of a27corporation, including the president, vice president, secretary, and28treasurer.29

(h)(i) "Responsible individual" includes any current or former30officer, manager, member, partner, or trustee of a limited liability31business entity with unpaid trust fund tax liability.32

(ii) "Responsible individual" also includes any current or former33employee or other individual, but only if the individual had the34responsibility or duty to remit payment of the limited liability35business entity's unpaid trust fund tax liability.36

(iii) Whenever any taxpayer has one or more limited liability37business entities as a member, manager, or partner, "responsible38individual" also includes any current and former officers, members,39or managers of the limited liability business entity or entities or40

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of any other limited liability business entity involved directly in1the management of the taxpayer. For purposes of this subsection2(7)(h)(iii), "taxpayer" means a limited liability business entity3with unpaid trust fund taxes.4

(i) "Trust fund taxes" means taxes collected from buyers and5deemed held in trust under RCW 69.50.535.6

(j) "Willfully failed to pay or to cause to be paid" means that7the failure was the result of an intentional, conscious, and8voluntary course of action.9


(1) Retail outlets ((shall sell no)) may not sell products or12services other than marijuana concentrates, useable marijuana,13marijuana-infused products, or paraphernalia intended for the storage14or use of marijuana concentrates, useable marijuana, or marijuana-15infused products.16

(2) Licensed marijuana retailers ((shall)) may not employ persons17under twenty-one years of age or allow persons under twenty-one years18of age to enter or remain on the premises of a retail outlet.19However, qualifying patients between eighteen and twenty-one years of20age with a recognition card may enter and remain on the premises of a21retail outlet holding a medical marijuana endorsement and may22purchase products for their personal medical use. Qualifying patients23who are under the age of eighteen with a recognition card and who24accompany their designated providers may enter and remain on the25premises of a retail outlet holding a medical marijuana endorsement,26but may not purchase products for their personal medical use.27

(3)(a) Licensed marijuana retailers must ensure that all28employees are trained on the rules adopted to implement this chapter,29identification of persons under the age of twenty-one, and other30requirements adopted by the state liquor and cannabis board to ensure31that persons under the age of twenty-one are not permitted to enter32or remain on the premises of a retail outlet.33

(b) Licensed marijuana retailers with a medical marijuana34endorsement must ensure that all employees are trained on the35subjects required by (a) of this subsection as well as identification36of authorizations and recognition cards. Employees must also be37trained to permit qualifying patients who hold recognition cards and38are between the ages of eighteen and twenty-one to enter the premises39

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and purchase marijuana for their personal medical use and to permit1qualifying patients who are under the age of eighteen with a2recognition card to enter the premises if accompanied by their3designated providers.4

(4) Licensed marijuana retailers ((shall)) may not display any5signage ((in a window, on a door, or on the outside of the premises6of a retail outlet that is visible to the general public from a7public right-of-way, other than a single sign no larger than one8thousand six hundred square inches identifying the retail outlet by9the licensee's business or trade name. Retail outlets that hold10medical marijuana endorsements may include this information on11signage.12

(5) Licensed marijuana retailers shall not display marijuana13concentrates, useable marijuana, or marijuana-infused products in a14manner that is visible to the general public from a public right-of-15way.16

(6))) outside of the licensed premises, other than two signs17identifying the retail outlet by the licensee's business or trade18name. Each sign must be no larger than one thousand six hundred19square inches, be permanently affixed to a building or other20structure, and be posted not less than one thousand feet from any21elementary school, secondary school, or playground.22

(5) No licensed marijuana retailer or employee of a retail outlet23((shall)) may open or consume, or allow to be opened or consumed, any24marijuana concentrates, useable marijuana, or marijuana-infused25product on the outlet premises.26

(((7))) (6) The state liquor and cannabis board ((shall)) must27fine a licensee one thousand dollars for each violation of any28subsection of this section. Fines collected under this section must29be deposited into the dedicated marijuana ((fund)) account created30under RCW 69.50.530.31


(1) No licensed marijuana producer, processor, researcher, or34retailer ((shall)) may place or maintain, or cause to be placed or35maintained, an advertisement of marijuana, useable marijuana,36marijuana concentrates, or a marijuana-infused product in any form or37through any medium whatsoever:38

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(a) Within one thousand feet of the perimeter of a school1grounds, playground, recreation center or facility, child care2center, public park, or library, or any game arcade admission to3which is not restricted to persons aged twenty-one years or older;4

(b) On or in a public transit vehicle or public transit shelter;5or6

(c) On or in a publicly owned or operated property.7(2) Merchandising within a retail outlet is not advertising for8

the purposes of this section.9(3) This section does not apply to a noncommercial message.10(4) The state liquor ((control)) and cannabis board ((shall))11

must fine a licensee one thousand dollars for each violation of12subsection (1) of this section. Fines collected under this subsection13must be deposited into the dedicated marijuana ((fund)) account14created under RCW 69.50.530.15


(1) ((There is levied and collected a marijuana excise tax equal18to twenty-five percent of the selling price on each wholesale sale in19this state of marijuana by a licensed marijuana producer to a20licensed marijuana processor or another licensed marijuana producer.21This tax is the obligation of the licensed marijuana producer.22

(2) There is levied and collected a marijuana excise tax equal to23twenty-five percent of the selling price on each wholesale sale in24this state of marijuana concentrates, useable marijuana, and25marijuana-infused products by a licensed marijuana processor to a26licensed marijuana retailer. This tax is the obligation of the27licensed marijuana processor.28

(3))) (a) There is levied and collected a marijuana excise tax29equal to ((twenty-five)) thirty-seven percent of the selling price on30each retail sale in this state of marijuana concentrates, useable31marijuana, and marijuana-infused products. This tax is ((the32obligation of the licensed marijuana retailer, is)) separate and in33addition to general state and local sales and use taxes that apply to34retail sales of tangible personal property, and is not part of the35total retail price to which general state and local sales and use36taxes apply. The tax must be separately itemized from the state and37local retail sales tax on the sales receipt provided to the buyer.38

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(b) The tax levied in this section must be reflected in the price1list or quoted shelf price in the licensed marijuana retail store and2in any advertising that includes prices for all useable marijuana,3marijuana concentrates, or marijuana-infused products.4

(((4))) (2) All revenues collected from the marijuana excise5((taxes)) tax imposed under ((subsections (1) through (3) of)) this6section ((shall)) must be deposited each day in ((a depository7approved by the state treasurer and transferred to the state8treasurer to be credited to)) the dedicated marijuana ((fund))9account.10

(((5))) (3) The ((state liquor control board shall)) tax imposed11in this section must be paid by the buyer to the seller. Each seller12must collect from the buyer the full amount of the tax payable on13each taxable sale. The tax collected as required by this section is14deemed to be held in trust by the seller until paid to the board. If15any seller fails to collect the tax imposed in this section or,16having collected the tax, fails to pay it as prescribed by the board,17whether such failure is the result of the seller's own acts or the18result of acts or conditions beyond the seller's control, the seller19is, nevertheless, personally liable to the state for the amount of20the tax.21


(a) "Board" means the state liquor and cannabis board.24(b) "Retail sale" has the same meaning as in RCW 82.08.010.25(c) "Selling price" has the same meaning as in RCW 82.08.010,26

except that when product is sold under circumstances where the total27amount of consideration paid for the product is not indicative of its28true value, "selling price" means the true value of the product sold.29

(d) "Product" means marijuana, marijuana concentrates, useable30marijuana, and marijuana-infused products.31

(e) "True value" means market value based on sales at comparable32locations in this state of the same or similar product of like33quality and character sold under comparable conditions of sale to34comparable purchasers. However, in the absence of such sales of the35same or similar product, true value means the value of the product36sold as determined by all of the seller's direct and indirect costs37attributable to the product.38

(5)(a) The board must regularly review the tax level((s))39established under this section and make recommendations, in40

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consultation with the department of revenue, to the legislature as1appropriate regarding adjustments that would further the goal of2discouraging use while undercutting illegal market prices.3

(b) The state liquor and cannabis board must report, in4compliance with RCW 43.01.036, to the appropriate committees of the5legislature every two years. The report at a minimum must include the6following:7

(i) The specific recommendations required under (a) of this8subsection;9

(ii) A comparison of gross sales and tax collections prior to and10after any marijuana tax change;11

(iii) The increase or decrease in the volume of legal marijuana12sold prior to and after any marijuana tax change;13

(iv) Increases or decreases in the number of licensed marijuana14producers, processors, and retailers;15

(v) The number of illegal and noncompliant marijuana outlets the16board requires to be closed;17

(vi) Gross marijuana sales and tax collections in Oregon; and18(vii) The total amount of reported sales and use taxes exempted19

for qualifying patients. The department of revenue must provide the20data of exempt amounts to the board.21

(c) The board is not required to report to the legislature as22required in (b) of this subsection after January 1, 2025.23

(6) The legislature does not intend and does not authorize any24person or entity to engage in activities or to conspire to engage in25activities that would constitute per se violations of state and26federal antitrust laws including, but not limited to, agreements27among retailers as to the selling price of any goods sold.28


((All marijuana excise taxes collected from sales of marijuana,31useable marijuana, and marijuana-infused products under RCW3269.50.535, and the license fees, penalties, and forfeitures derived33under chapter 3, Laws of 2013 from marijuana producer, marijuana34processor, and marijuana retailer licenses shall every three months35be disbursed by the state liquor control board as follows:36

(1))) The legislature must annually appropriate moneys in the37dedicated marijuana account created in RCW 69.50.530 as follows:38

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(1) For the purposes listed in this subsection (1), the1legislature must appropriate to the respective agencies amounts2sufficient to make the following expenditures on a quarterly basis:3

(a) One hundred twenty-five thousand dollars to the department of4social and health services to design and administer the Washington5state healthy youth survey, analyze the collected data, and produce6reports, in collaboration with the office of the superintendent of7public instruction, department of health, department of commerce,8family policy council, and state liquor ((control)) and cannabis9board. The survey ((shall)) must be conducted at least every two10years and include questions regarding, but not necessarily limited11to, academic achievement, age at time of substance use initiation,12antisocial behavior of friends, attitudes toward antisocial behavior,13attitudes toward substance use, laws and community norms regarding14antisocial behavior, family conflict, family management, parental15attitudes toward substance use, peer rewarding of antisocial16behavior, perceived risk of substance use, and rebelliousness. Funds17disbursed under this subsection may be used to expand administration18of the healthy youth survey to student populations attending19institutions of higher education in Washington;20

(((2))) (b) Fifty thousand dollars to the department of social21and health services for the purpose of contracting with the22Washington state institute for public policy to conduct the cost-23benefit evaluation and produce the reports described in RCW2469.50.550. This appropriation ((shall)) ends after production of the25final report required by RCW 69.50.550;26

(((3))) (c) Five thousand dollars to the University of Washington27alcohol and drug abuse institute for the creation, maintenance, and28timely updating of web-based public education materials providing29medically and scientifically accurate information about the health30and safety risks posed by marijuana use;31

(((4))) (d) An amount not ((exceeding)) less than one million two32hundred fifty thousand dollars to the state liquor ((control board as33is necessary for administration of chapter 3, Laws of 2013;34

(5) Of the funds remaining after the disbursements identified in35subsections (1) through (4) of this section)) and cannabis board for36administration of this chapter as appropriated in the omnibus37appropriations act;38

(e) Twenty-three thousand seven hundred fifty dollars to the39department of enterprise services provided solely for the state40

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building code council established under RCW 19.27.070, to develop and1adopt fire and building code provisions related to marijuana2processing and extraction facilities. The distribution under this3subsection (1)(e) is for fiscal year 2016 only;4

(2) From the amounts in the dedicated marijuana account after5appropriation of the amounts identified in subsection (1) of this6section, the legislature must appropriate for the purposes listed in7this subsection (2) as follows:8

(a) ((Fifteen percent)) (i) Up to fifteen percent, but at least9one million five hundred fifty thousand dollars annually, to the10department of social and health services division of behavioral11health and recovery for ((implementation and maintenance)) the12development, implementation, maintenance, and evaluation of programs13and practices aimed at the prevention or reduction of maladaptive14substance use, substance-use disorder, substance abuse or substance15dependence, as these terms are defined in the Diagnostic and16Statistical Manual of Mental Disorders, among middle school and high17school age students, whether as an explicit goal of a given program18or practice or as a consistently corresponding effect of its19implementation, mental health services for children and youth, and20services for pregnant and parenting women; PROVIDED, That:21

(((i))) (A) Of the funds ((disbursed)) appropriated under (a)(i)22of this subsection for new programs and new services, at least23eighty-five percent must be directed to evidence-based ((and cost-24beneficial)) or research-based programs and practices that produce25objectively measurable results and, by September 1, 2020, are cost-26beneficial; and27

(((ii))) (B) Up to fifteen percent of the funds ((disbursed))28appropriated under (a)(i) of this subsection for new programs and new29services may be directed to ((research-based and)) proven and tested30practices, emerging best practices, or promising practices.31

(ii) In deciding which programs and practices to fund, the32secretary of the department of social and health services ((shall))33must consult, at least annually, with the University of Washington's34social development research group and the University of Washington's35alcohol and drug abuse institute;36

(b) ((Ten percent)) Up to ten percent, but at least eight million37dollars annually, to the department of health for the following:38

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(i) Creation, implementation, operation, and management of a1marijuana education and public health program that contains the2following:3

(((i))) (A) A marijuana use public health hotline that provides4referrals to substance abuse treatment providers, utilizes evidence-5based or research-based public health approaches to minimizing the6harms associated with marijuana use, and does not solely advocate an7abstinence-only approach;8

(((ii))) (B) A grants program for local health departments or9other local community agencies that supports development and10implementation of coordinated intervention strategies for the11prevention and reduction of marijuana use by youth; and12

(((iii))) (C) Media-based education campaigns across television,13internet, radio, print, and out-of-home advertising, separately14targeting youth and adults, that provide medically and scientifically15accurate information about the health and safety risks posed by16marijuana use; and17

(ii) The Washington poison control center;18(c) ((Six-tenths of one percent to the University of Washington19

and four-tenths of one percent)) Up to six-tenths of one percent, but20at least two hundred six thousand dollars annually to the University21of Washington, and up to four-tenths of one percent, but at least one22hundred thirty-eight thousand dollars annually, to Washington State23University for research on the short and long-term effects of24marijuana use, to include but not be limited to formal and informal25methods for estimating and measuring intoxication and impairment, and26for the dissemination of such research;27

(d) ((Fifty percent to the state basic health plan trust28account)) Up to fifty percent, but at least seventeen million two29hundred nineteen thousand dollars annually, to be administered by the30Washington basic health plan administrator and used as provided under31chapter 70.47 RCW;32

(e) ((Five percent)) Up to five percent, but at least one million33seven hundred twenty-two thousand dollars annually, to the Washington34state health care authority to be expended exclusively through35contracts with community health centers to provide primary health and36dental care services, migrant health services, and maternity health37care services as provided under RCW 41.05.220;38

(f) ((Three-tenths of one percent)) Up to three-tenths of one39percent, but at least one hundred three thousand dollars annually, to40

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the office of the superintendent of public instruction to fund grants1to building bridges programs under chapter 28A.175 RCW; ((and))2

(g) ((The remainder to the general fund.)) Up to one million3eight hundred thousand dollars annually to the department of commerce4provided solely for community mobilization purposes as identified in5RCW 43.270.020, subject to the amounts appropriated by the6legislature for this purpose; and7

(h) At the end of each fiscal year, the treasurer must transfer8any amounts in the dedicated marijuana account that are not9appropriated pursuant to subsection (1) of this section and this10subsection (2) into the general fund, except as provided in (h)(i) of11this subsection (2).12

(i) Beginning in fiscal year 2018 and each year thereafter, if13marijuana excise tax collections deposited into the general fund in14the prior fiscal year exceed twenty-five million dollars, then each15fiscal year the legislature must appropriate an amount equal to16thirty percent of all marijuana excise taxes deposited into the17general fund the prior fiscal year to the treasurer for distribution18to counties, cities, and towns as follows:19

(A) Thirty percent must be distributed to counties, cities, and20towns where licensed marijuana retailers are physically located. Each21jurisdiction must receive a share of the revenue distribution under22this subsection (2)(h)(i)(A) based on the proportional share of the23total revenues generated in the individual jurisdiction from the24taxes collected under RCW 69.50.535, from licensed marijuana25retailers physically located in each jurisdiction. For purposes of26this subsection (2)(h)(i)(A), one hundred percent of the proportional27amount attributed to a retailer physically located in a city or town28must be distributed to the city or town.29

(B) Seventy percent must be distributed to counties, cities, and30towns ratably on a per capita basis. Counties must receive sixty31percent of the distribution, which shall be disbursed based on each32county's total proportional population, including the population33within incorporated cities and towns, and cities and towns must34receive forty percent of this distribution, which must be based on35each city or town's total proportional population. Funds may only be36distributed to jurisdictions that do not prohibit the siting of any37state licensed marijuana producer, processor, or retailer; except for38counties that prohibit the siting of any state licensed marijuana39producer, processor, or retailer, but have cities or towns within the40

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county which contain marijuana retail stores, such counties must1receive twenty percent of the funds they would otherwise receive if2they did not prohibit the siting of marijuana producers, processors,3or retailers. The funds forfeited by a county prohibiting the siting4of any state licensed marijuana producer, processor, or retailer must5be disbursed to the other counties on a per capita basis using each6county's total proportional population, including the population7within incorporated cities and towns.8

(ii) Distribution amounts allocated to each county, city, and9town must be distributed in four installments by the last day of each10fiscal quarter.11

(iii) By September 15th of each year, the state liquor and12cannabis board must provide the state treasurer the annual13distribution amount, if any, for each county and city as determined14in (h)(i) of this subsection (2).15

(iv) The total share of marijuana excise tax revenues distributed16to counties and cities in (h)(i) of this subsection (2) may not17exceed fifteen million dollars per fiscal year through June 30, 2019,18and may not exceed twenty million dollars per fiscal year thereafter.19

For the purposes of this section, "marijuana products" means20"useable marijuana," "marijuana concentrates," and "marijuana-infused21products" as those terms are defined in RCW 69.50.101.22

NEW SECTION. Sec. 207. A new section is added to chapter 82.0823RCW to read as follows:24

(1) Beginning July 1, 2016, the tax levied by RCW 82.08.020 does25not apply to:26

(a) Sales of marijuana concentrates, useable marijuana, or27marijuana-infused products, identified by the department of health28under RCW 69.50.--- (section 10, chapter 70, Laws of 2015) to be29beneficial for medical use, by marijuana retailers with medical30marijuana endorsements to qualifying patients or designated providers31who have been issued recognition cards;32

(b) Sales of products containing THC with a THC concentration of330.3 percent or less to qualifying patients or designated providers34who have been issued recognition cards by marijuana retailers with35medical marijuana endorsements;36

(c) Sales of marijuana concentrates, useable marijuana, or37marijuana-infused products, identified by the department of health38under RCW 69.50.--- (section 10, chapter 70, Laws of 2015) to have a39

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low THC, high CBD ratio, and to be beneficial for medical use, by1marijuana retailers with medical marijuana endorsements, to any2person;3

(d) Sales of topical, noningestible products containing THC with4a THC concentration of 0.3 percent or less by health care5professionals under RCW 69.51A.--- (section 35, chapter 70, Laws of62015);7

(e)(i) Marijuana, marijuana concentrates, useable marijuana,8marijuana-infused products, or products containing THC with a THC9concentration of 0.3 percent or less produced by a cooperative and10provided to its members; and11

(ii) Any nonmonetary resources and labor contributed by an12individual member of the cooperative in which the individual is a13member. However, nothing in this subsection (1)(e) may be construed14to exempt the individual members of a cooperative from the tax15imposed in RCW 82.08.020 on any purchase of property or services16contributed to the cooperative.17

(2) From the effective date of this section until July 1, 2016,18the tax levied by RCW 82.08.020 does not apply to sales of marijuana,19marijuana concentrates, useable marijuana, marijuana-infused20products, or products containing THC with a THC concentration of 0.321percent or less, by collective gardens under RCW 69.51A.085 to22qualifying patients or designated providers, if such sales are in23compliance with chapter 69.51A RCW.24

(3) Each seller making exempt sales under subsection (1) or (2)25of this section must maintain information establishing eligibility26for the exemption in the form and manner required by the department.27

(4) The department must provide a separate tax reporting line for28exemption amounts claimed under this section.29


(a) "Cooperative" means a cooperative authorized by and operating32in compliance with RCW 69.51A.--- (section 26, chapter 70, Laws of332015).34

(b) "Marijuana retailer with a medical marijuana endorsement"35means a marijuana retailer permitted under RCW 69.50.--- (section 10,36chapter 70, Laws of 2015) to sell marijuana for medical use to37qualifying patients and designated providers.38

(c) "Products containing THC with a THC concentration of 0.339percent or less" means all products containing THC with a THC40

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concentration not exceeding 0.3 percent and that, when used as1intended, are inhalable, ingestible, or absorbable.2

(d) "THC concentration," "marijuana," "marijuana concentrates,"3"useable marijuana," "marijuana retailer," and "marijuana-infused4products" have the same meanings as provided in RCW 69.50.101 and the5terms "qualifying patients," "designated providers," and "recognition6card" have the same meaning as provided in RCW 69.51A.010.7


(1) From the effective date of this section until July 1, 2016,10the provisions of this chapter do not apply to the use of marijuana,11marijuana concentrates, useable marijuana, marijuana-infused12products, or products containing THC with a THC concentration of 0.313percent or less, by a collective garden under RCW 69.51A.085, and the14qualifying patients or designated providers participating in the15collective garden, if such use is in compliance with chapter 69.51A16RCW.17

(2) Beginning July 1, 2016, the provisions of this chapter do not18apply to:19

(a) The use of marijuana concentrates, useable marijuana, or20marijuana-infused products, identified by the department of health21under RCW 69.50.--- (section 10, chapter 70, Laws of 2015) to be22beneficial for medical use, by qualifying patients or designated23providers who have been issued recognition cards and have obtained24such products from a marijuana retailer with a medical marijuana25endorsement.26

(b) The use of products containing THC with a THC concentration27of 0.3 percent or less by qualifying patients or designated providers28who have been issued recognition cards and have obtained such29products from a marijuana retailer with a medical marijuana30endorsement.31

(c)(i) Marijuana retailers with a medical marijuana endorsement32with respect to:33

(A) Marijuana concentrates, useable marijuana, or marijuana-34infused products; or35

(B) Products containing THC with a THC concentration of 0.336percent or less;37

(ii) The exemption in this subsection (2)(c) applies only if such38products are provided at no charge to a qualifying patient or39

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designated provider who has been issued a recognition card. Each such1retailer providing such products at no charge must maintain2information establishing eligibility for this exemption in the form3and manner required by the department.4

(d) The use of marijuana concentrates, useable marijuana, or5marijuana-infused products, identified by the department of health6under RCW 69.50.--- (section 10, chapter 70, Laws of 2015) to have a7low THC, high CBD ratio, and to be beneficial for medical use,8purchased from marijuana retailers with a medical marijuana9endorsement.10

(e) Health care professionals with respect to the use of products11containing THC with a THC concentration of 0.3 percent or less12provided at no charge by the health care professionals under RCW1369.51A.--- (section 35, chapter 70, Laws of 2015). Each health care14professional providing such products at no charge must maintain15information establishing eligibility for this exemption in the form16and manner required by the department.17

(f) The use of topical, noningestible products containing THC18with a THC concentration of 0.3 percent or less by qualifying19patients when purchased from or provided at no charge by a health20care professional under RCW 69.51A.--- (section 35, chapter 70, Laws21of 2015).22

(g) The use of:23(i) Marijuana, marijuana concentrates, useable marijuana,24

marijuana-infused products, or products containing THC with a THC25concentration of 0.3 percent or less, by a cooperative and its26members, when produced by the cooperative; and27

(ii) Any nonmonetary resources and labor by a cooperative when28contributed by its members. However, nothing in this subsection29(2)(g) may be construed to exempt the individual members of a30cooperative from the tax imposed in RCW 82.12.020 on the use of any31property or services purchased by the member and contributed to the32cooperative.33

(3) The definitions in section 207 of this act apply to this34section.35

NEW SECTION. Sec. 209. The provisions of RCW 82.32.805 and3682.32.808(8) do not apply to the exemptions in sections 207 and 20837of this act.38

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(1)(a) Except as provided in (b) of this subsection, a retail3sale of a bundled transaction that includes marijuana product is4subject to the tax imposed under RCW 69.50.535 on the entire selling5price of the bundled transaction.6

(b) If the selling price is attributable to products that are7taxable and products that are not taxable under RCW 69.50.535, the8portion of the price attributable to the nontaxable products are9subject to the tax imposed by RCW 69.50.535 unless the seller can10identify by reasonable and verifiable standards the portion that is11not subject to tax from its books and records that are kept in the12regular course of business for other purposes including, but not13limited to, nontax purposes.14


(a) "Bundled transaction" means:17(i) The retail sale of two or more products where the products18

are otherwise distinct and identifiable, are sold for one nonitemized19price, and at least one product is a marijuana product subject to the20tax under RCW 69.50.535; and21

(ii) A marijuana product provided free of charge with the22required purchase of another product. A marijuana product is provided23free of charge if the sales price of the product purchased does not24vary depending on the inclusion of the marijuana product provided25free of charge.26

(b) "Distinct and identifiable products" does not include27packaging such as containers, boxes, sacks, bags, and bottles, or28materials such as wrapping, labels, tags, and instruction guides,29that accompany the retail sale of the products and are incidental or30immaterial to the retail sale thereof. Examples of packaging that are31incidental or immaterial include grocery sacks, shoeboxes, and dry32cleaning garment bags.33

(c) "Marijuana product" means "useable marijuana," "marijuana34concentrates," and "marijuana-infused products" as defined in RCW3569.50.101.36

(d) "Selling price" has the same meaning as in RCW 82.08.010,37except that when product is sold under circumstances where the total38amount of consideration paid for the product is not indicative of its39true value, "selling price" means the true value of the product sold.40

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(e) "True value" means market value based on sales at comparable1locations in this state of the same or similar product of like2quality and character sold under comparable conditions of sale to3comparable purchasers. However, in the absence of such sales of the4same or similar product, "true value" means the value of the product5sold as determined by all of the seller's direct and indirect costs6attributable to the product.7


(1) Marijuana producers, processors, and retailers are prohibited10from making sales of any marijuana or marijuana product, if the sale11of the marijuana or marijuana product is conditioned upon the buyer's12purchase of any service or nonmarijuana product. This subsection13applies whether the buyer purchases such service or nonmarijuana14product at the time of sale of the marijuana or marijuana product, or15in a separate transaction.16


(a) "Marijuana product" means "useable marijuana," "marijuana19concentrates," and "marijuana-infused products," as those terms are20defined in RCW 69.50.101.21

(b) "Nonmarijuana product" includes paraphernalia, promotional22items, lighters, bags, boxes, containers, and such other items as may23be identified by the state liquor and cannabis board.24

(c) "Selling price" has the same meaning as in RCW 69.50.535.25(d) "Service" includes memberships and any other services26

identified by the state liquor and cannabis board.27

PART III28Marijuana Business: Buffers and Licensee Residency29

NEW SECTION. Sec. 301. (1) The legislature finds that licensing30of marijuana producer and processor businesses within an area zoned31for residential use or an area zoned for rural use with a minimum lot32size of five acres creates a public nuisance, lowers property values,33and increases the risk of criminal activity. The impacts of these34businesses greatly affects the economic value of the neighboring35properties through many factors, such as increased traffic and the36

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potential for increased criminal activity, including trespassing,1theft, and acts of physical violence.2

(2) The legislature finds that locating and relocating these3businesses in other areas more suitable for producing marijuana and4processing marijuana, useable marijuana, marijuana concentrates, and5marijuana-infused products poses a smaller cost on society than to6allow the businesses to diminish the public health, safety, and7welfare of the neighboring residential and rural properties. The8legislature also finds that the newly prohibited areas have other9economically viable or beneficial uses and are not diminished in10value by this act, and in many of these instances this act may11increase the value of the properties in question.12


(1) For the purpose of considering any application for a license15to produce, process, research, transport, or deliver marijuana,16useable marijuana, marijuana concentrates, or marijuana-infused17products subject to the regulations established under section 502 of18this act, or sell marijuana, or for the renewal of a license to19produce, process, research, transport, or deliver marijuana, useable20marijuana, marijuana concentrates, or marijuana-infused products21subject to the regulations established under section 502 of this act,22or sell marijuana, the state liquor and cannabis board must conduct a23comprehensive, fair, and impartial evaluation of the applications24timely received.25

(a) The state liquor and cannabis board must develop a26competitive, merit-based application process that includes, at a27minimum, the opportunity for an applicant to demonstrate experience28and qualifications in the marijuana industry. The state liquor and29cannabis board ((shall)) must give preference between competing30applications in the licensing process to applicants that have the31following experience and qualifications, in the following order of32priority:33

(i) First priority is given to applicants who:34(A) Applied to the state liquor and cannabis board for a35

marijuana retailer license prior to July 1, 2014;36(B) Operated or were employed by a collective garden before37

January 1, 2013;38

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(C) Have maintained a state business license and a municipal1business license, as applicable in the relevant jurisdiction; and2

(D) Have had a history of paying all applicable state taxes and3fees;4

(ii) Second priority ((shall)) must be given to applicants who:5(A) Operated or were employed by a collective garden before6

January 1, 2013;7(B) Have maintained a state business license and a municipal8

business license, as applicable in the relevant jurisdiction; and9(C) Have had a history of paying all applicable state taxes and10

fees; and11(iii) Third priority ((shall)) must be given to all other12

applicants who do not have the experience and qualifications13identified in (a)(i) and (ii) of this subsection.14

(b) The state liquor and cannabis board may cause an inspection15of the premises to be made, and may inquire into all matters in16connection with the construction and operation of the premises. For17the purpose of reviewing any application for a license and for18considering the denial, suspension, revocation, or renewal or denial19thereof, of any license, the state liquor and cannabis board may20consider any prior criminal conduct of the applicant including an21administrative violation history record with the state liquor and22cannabis board and a criminal history record information check. The23state liquor and cannabis board may submit the criminal history24record information check to the Washington state patrol and to the25identification division of the federal bureau of investigation in26order that these agencies may search their records for prior arrests27and convictions of the individual or individuals who filled out the28forms. The state liquor and cannabis board ((shall)) must require29fingerprinting of any applicant whose criminal history record30information check is submitted to the federal bureau of31investigation. The provisions of RCW 9.95.240 and of chapter 9.96A32RCW ((shall)) do not apply to these cases. Subject to the provisions33of this section, the state liquor and cannabis board may, in its34discretion, grant or deny the renewal or license applied for. Denial35may be based on, without limitation, the existence of chronic illegal36activity documented in objections submitted pursuant to subsections37(7)(c) and (((9))) (10) of this section. Authority to approve an38uncontested or unopposed license may be granted by the state liquor39and cannabis board to any staff member the board designates in40

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writing. Conditions for granting this authority ((shall)) must be1adopted by rule.2

(c) No license of any kind may be issued to:3(i) A person under the age of twenty-one years;4(ii) A person doing business as a sole proprietor who has not5

lawfully resided in the state for at least three months prior to6applying to receive a license;7

(iii) A partnership, employee cooperative, association, nonprofit8corporation, or corporation unless formed under the laws of this9state, and unless all of the members thereof are qualified to obtain10a license as provided in this section; or11

(iv) A person whose place of business is conducted by a manager12or agent, unless the manager or agent possesses the same13qualifications required of the licensee.14

(2)(a) The state liquor and cannabis board may, in its15discretion, subject to the provisions of RCW 69.50.334, suspend or16cancel any license; and all protections of the licensee from criminal17or civil sanctions under state law for producing, processing, or18selling marijuana, useable marijuana, or marijuana-infused products19thereunder shall be suspended or terminated, as the case may be.20

(b) The state liquor and cannabis board ((shall)) must21immediately suspend the license of a person who has been certified22pursuant to RCW 74.20A.320 by the department of social and health23services as a person who is not in compliance with a support order.24If the person has continued to meet all other requirements for25reinstatement during the suspension, reissuance of the license26((shall be)) is automatic upon the state liquor and cannabis board's27receipt of a release issued by the department of social and health28services stating that the licensee is in compliance with the order.29

(c) The state liquor and cannabis board may request the30appointment of administrative law judges under chapter 34.12 RCW who31shall have power to administer oaths, issue subpoenas for the32attendance of witnesses and the production of papers, books,33accounts, documents, and testimony, examine witnesses, and to receive34testimony in any inquiry, investigation, hearing, or proceeding in35any part of the state, under rules and regulations the state liquor36and cannabis board may adopt.37

(d) Witnesses ((shall)) must be allowed fees and mileage each way38to and from any inquiry, investigation, hearing, or proceeding at the39rate authorized by RCW 34.05.446. Fees need not be paid in advance of40

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appearance of witnesses to testify or to produce books, records, or1other legal evidence.2

(e) In case of disobedience of any person to comply with the3order of the state liquor and cannabis board or a subpoena issued by4the state liquor and cannabis board, or any of its members, or5administrative law judges, or on the refusal of a witness to testify6to any matter regarding which he or she may be lawfully interrogated,7the judge of the superior court of the county in which the person8resides, on application of any member of the board or administrative9law judge, ((shall)) compels obedience by contempt proceedings, as in10the case of disobedience of the requirements of a subpoena issued11from said court or a refusal to testify therein.12

(3) Upon receipt of notice of the suspension or cancellation of a13license, the licensee ((shall)) must forthwith deliver up the license14to the state liquor and cannabis board. Where the license has been15suspended only, the state liquor and cannabis board ((shall)) must16return the license to the licensee at the expiration or termination17of the period of suspension. The state liquor and cannabis board18((shall)) must notify all other licensees in the county where the19subject licensee has its premises of the suspension or cancellation20of the license; and no other licensee or employee of another licensee21may allow or cause any marijuana, marijuana concentrates, useable22marijuana, or marijuana-infused products to be delivered to or for23any person at the premises of the subject licensee.24

(4) Every license issued under chapter 3, Laws of 2013 ((shall25be)) is subject to all conditions and restrictions imposed by chapter263, Laws of 2013 or by rules adopted by the state liquor and cannabis27board to implement and enforce chapter 3, Laws of 2013. All28conditions and restrictions imposed by the state liquor and cannabis29board in the issuance of an individual license ((shall)) must be30listed on the face of the individual license along with the trade31name, address, and expiration date.32

(5) Every licensee ((shall)) must post and keep posted its33license, or licenses, in a conspicuous place on the premises.34

(6) No licensee ((shall)) may employ any person under the age of35twenty-one years.36

(7)(a) Before the state liquor and cannabis board issues a new or37renewed license to an applicant it ((shall)) must give notice of the38application to the chief executive officer of the incorporated city39or town, if the application is for a license within an incorporated40

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city or town, or to the county legislative authority, if the1application is for a license outside the boundaries of incorporated2cities or towns.3

(b) The incorporated city or town through the official or4employee selected by it, or the county legislative authority or the5official or employee selected by it, ((shall have)) has the right to6file with the state liquor and cannabis board within twenty days7after the date of transmittal of the notice for applications, or at8least thirty days prior to the expiration date for renewals, written9objections against the applicant or against the premises for which10the new or renewed license is asked. The state liquor and cannabis11board may extend the time period for submitting written objections.12

(c) The written objections ((shall)) must include a statement of13all facts upon which the objections are based, and in case written14objections are filed, the city or town or county legislative15authority may request, and the state liquor and cannabis board may in16its discretion hold, a hearing subject to the applicable provisions17of Title 34 RCW. If the state liquor and cannabis board makes an18initial decision to deny a license or renewal based on the written19objections of an incorporated city or town or county legislative20authority, the applicant may request a hearing subject to the21applicable provisions of Title 34 RCW. If a hearing is held at the22request of the applicant, state liquor and cannabis board23representatives ((shall)) must present and defend the state liquor24and cannabis board's initial decision to deny a license or renewal.25

(d) Upon the granting of a license under this title the state26liquor and cannabis board ((shall)) must send written notification to27the chief executive officer of the incorporated city or town in which28the license is granted, or to the county legislative authority if the29license is granted outside the boundaries of incorporated cities or30towns.31

(8)(a) Except as provided in (b) through (d) of this subsection,32the state liquor and cannabis board ((shall)) may not issue a license33for any premises within one thousand feet of the perimeter of the34grounds of any elementary or secondary school, playground, recreation35center or facility, child care center, public park, public transit36center, or library, or any game arcade admission to which is not37restricted to persons aged twenty-one years or older.38

(b) A city, county, or town may permit the licensing of premises39within one thousand feet but not less than one hundred feet of the40

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facilities described in (a) of this subsection, except elementary1schools, secondary schools, and playgrounds, by enacting an ordinance2authorizing such distance reduction, provided that such distance3reduction will not negatively impact the jurisdiction's civil4regulatory enforcement, criminal law enforcement interests, public5safety, or public health.6

(c) A city, county, or town may permit the licensing of research7premises allowed under RCW 69.50.--- (section 1, chapter 71, Laws of82015) within one thousand feet but not less than one hundred feet of9the facilities described in (a) of this subsection by enacting an10ordinance authorizing such distance reduction, provided that the11ordinance will not negatively impact the jurisdiction's civil12regulatory enforcement, criminal law enforcement, public safety, or13public health.14

(d) The state liquor and cannabis board may license premises15located in compliance with the distance requirements set in an16ordinance adopted under (b) or (c) of this subsection. Before issuing17or renewing a research license for premises within one thousand feet18but not less than one hundred feet of an elementary school, secondary19school, or playground in compliance with an ordinance passed pursuant20to (c) of this subsection, the board must ensure that the facility:21

(i) Meets a security standard exceeding that which applies to22marijuana producer, processor, or retailer licensees;23

(ii) Is inaccessible to the public and no part of the operation24of the facility is in view of the general public; and25

(iii) Bears no advertising or signage indicating that it is a26marijuana research facility.27

(9) The state liquor and cannabis board may not issue a marijuana28producer or marijuana processor license for any premises located29within an area zoned for residential use or an area zoned for rural30use with a minimum lot size of five acres.31

(10) In determining whether to grant or deny a license or renewal32of any license, the state liquor and cannabis board ((shall)) must33give substantial weight to objections from an incorporated city or34town or county legislative authority based upon chronic illegal35activity associated with the applicant's operations of the premises36proposed to be licensed or the applicant's operation of any other37licensed premises, or the conduct of the applicant's patrons inside38or outside the licensed premises. "Chronic illegal activity" means39(a) a pervasive pattern of activity that threatens the public health,40

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safety, and welfare of the city, town, or county including, but not1limited to, open container violations, assaults, disturbances,2disorderly conduct, or other criminal law violations, or as3documented in crime statistics, police reports, emergency medical4response data, calls for service, field data, or similar records of a5law enforcement agency for the city, town, county, or any other6municipal corporation or any state agency; or (b) an unreasonably7high number of citations for violations of RCW 46.61.502 associated8with the applicant's or licensee's operation of any licensed premises9as indicated by the reported statements given to law enforcement upon10arrest.11

PART IV12Consumption of Marijuana in a Public Place13


(1) It is unlawful to open a package containing marijuana,16useable marijuana, ((or a)) marijuana-infused products, or marijuana17concentrates, or consume marijuana, useable marijuana, ((or a))18marijuana-infused products, or marijuana concentrates, in view of the19general public or in a public place.20

(2) For the purposes of this section, "public place" has the same21meaning as defined in RCW 66.04.010, but the exclusions in RCW2266.04.011 do not apply.23

(3) A person who violates this section is guilty of a class 324civil infraction under chapter 7.80 RCW.25

PART V26Transportation of Marijuana Products27


(1) A licensed marijuana producer, marijuana processor, marijuana30researcher, or marijuana retailer, or their employees, in accordance31with the requirements of this chapter and the administrative rules32adopted thereunder, may use the services of a common carrier subject33to regulation under chapters 81.28 and 81.29 RCW and licensed in34compliance with the regulations established under section 502 of this35act, to physically transport or deliver marijuana, useable marijuana,36

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marijuana concentrates, and marijuana-infused products between1licensed marijuana businesses located within the state.2

(2) An employee of a common carrier engaged in marijuana-related3transportation or delivery services authorized under subsection (1)4of this section is prohibited from carrying or using a firearm during5the course of providing such services, unless:6

(a) Pursuant to section 502 of this act, the state liquor and7cannabis board explicitly authorizes the carrying or use of firearms8by such employee while engaged in the transportation or delivery9services;10

(b) The employee has an armed private security guard license11issued pursuant to RCW 18.170.040; and12

(c) The employee is in full compliance with the regulations13established by the state liquor and cannabis board under section 50214of this act.15

(3) A common carrier licensed under section 502 of this act may,16for the purpose of transporting and delivering marijuana, useable17marijuana, marijuana concentrates, and marijuana-infused products,18utilize Washington state ferry routes for such transportation and19delivery.20

(4) The possession of marijuana, useable marijuana, marijuana21concentrates, and marijuana-infused products being physically22transported or delivered within the state, in amounts not exceeding23those that may be established under section 502(3) of this act, by a24licensed employee of a common carrier when performing the duties25authorized under, and in accordance with, this section and section26502 of this act, is not a violation of this section, this chapter, or27any other provision of Washington state law.28


(1) The state liquor and cannabis board must adopt rules31providing for an annual licensing procedure of a common carrier who32seeks to transport or deliver marijuana, useable marijuana, marijuana33concentrates, and marijuana-infused products within the state.34

(2) The rules for licensing must:35(a) Establish criteria for considering the approval or denial of36

a common carrier's original application or renewal application;37

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(b) Provide minimum qualifications for any employee authorized to1drive or operate the transportation or delivery vehicle, including a2minimum age of at least twenty-one years;3

(c) Address the safety of the employees transporting or4delivering the products, including issues relating to the carrying of5firearms by such employees;6

(d) Address the security of the products being transported,7including a system of electronically tracking all products at both8the point of pickup and the point of delivery; and9

(e) Set reasonable fees for the application and licensing10process.11

(3) The state liquor and cannabis board may adopt rules12establishing the maximum amounts of marijuana, useable marijuana,13marijuana concentrates, and marijuana-infused products that may be14physically transported or delivered at one time by a common carrier15as provided under section 501 of this act.16


(1) It is unlawful for any person to possess a controlled19substance unless the substance was obtained directly from, or20pursuant to, a valid prescription or order of a practitioner while21acting in the course of his or her professional practice, or except22as otherwise authorized by this chapter.23

(2) Except as provided in RCW 69.50.4014, any person who violates24this section is guilty of a class C felony punishable under chapter259A.20 RCW.26

(3)(a) The possession, by a person twenty-one years of age or27older, of useable marijuana, marijuana concentrates, or marijuana-28infused products in amounts that do not exceed those set forth in RCW2969.50.360(3) is not a violation of this section, this chapter, or any30other provision of Washington state law.31

(b) The possession of marijuana, useable marijuana, marijuana32concentrates, and marijuana-infused products being physically33transported or delivered within the state, in amounts not exceeding34those that may be established under section 502(3) of this act, by a35licensed employee of a common carrier when performing the duties36authorized in accordance with sections 501 and 502 of this act, is37not a violation of this section, this chapter, or any other provision38of Washington state law.39

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(4) No person under twenty-one years of age may possess,1manufacture, sell, or distribute marijuana, marijuana-infused2products, or marijuana concentrates, regardless of THC concentration.3This does not include qualifying patients with a valid authorization.4

(5) The possession by a qualifying patient or designated provider5of marijuana concentrates, useable marijuana, marijuana-infused6products, or plants in accordance with chapter 69.51A RCW is not a7violation of this section, this chapter, or any other provision of8Washington state law.9


The requirements of this chapter do not apply to:12(1) A person who is employed exclusively or regularly by one13

employer and performs the functions of a private security guard14solely in connection with the affairs of that employer, if the15employer is not a private security company. However, in accordance16with section 501 of this act, an employee engaged in marijuana-17related transportation or delivery services on behalf of a common18carrier must be licensed as an armed private security guard under19this chapter in order to be authorized to carry or use a firearm20while providing such services;21

(2) A sworn peace officer while engaged in the performance of the22officer's official duties;23

(3) A sworn peace officer while employed by any person to engage24in off-duty employment as a private security guard, but only if the25employment is approved by the chief law enforcement officer of the26jurisdiction where the employment takes place and the sworn peace27officer does not employ, contract with, or broker for profit other28persons to assist him or her in performing the duties related to his29or her private employer; or30

(4)(a) A person performing crowd management or guest services31including, but not limited to, a person described as a ticket taker,32usher, door attendant, parking attendant, crowd monitor, or event33staff who:34

(((a))) (i) Does not carry a firearm or other dangerous weapon35including, but not limited to, a stun gun, taser, pepper mace, or36nightstick;37

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(((b))) (ii) Does not wear a uniform or clothing readily1identifiable by a member of the public as that worn by a private2security officer or law enforcement officer; and3

(((c))) (iii) Does not have as his or her primary responsibility4the detainment of persons or placement of persons under arrest.5

(b) The exemption provided in this subsection applies only when a6crowd has assembled for the purpose of attending or taking part in an7organized event, including preevent assembly, event operation hours,8and postevent departure activities.9


Except as provided in RCW 69.50.401(2)(c) or as otherwise12authorized by this chapter, any person found guilty of possession of13forty grams or less of ((marihuana)) marijuana is guilty of a14misdemeanor.15

PART VI16Funding for Marijuana Health Awareness Program17


The board, subject to the provisions of this title and the rules,20must:21

(1) Determine the nature, form and capacity of all packages to be22used for containing liquor kept for sale under this title;23

(2) Execute or cause to be executed, all contracts, papers, and24documents in the name of the board, under such regulations as the25board may fix;26

(3) Pay all customs, duties, excises, charges and obligations27whatsoever relating to the business of the board;28

(4) Require bonds from all employees in the discretion of the29board, and to determine the amount of fidelity bond of each such30employee;31

(5) Perform services for the state lottery commission to such32extent, and for such compensation, as may be mutually agreed upon33between the board and the commission;34

(6) Accept and deposit into the general fund-local account and35disburse, subject to appropriation, federal grants or other funds or36donations from any source for the purpose of improving public37

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awareness of the health risks associated with alcohol and marijuana1consumption by youth and the abuse of alcohol and marijuana by adults2in Washington state. The board's alcohol awareness program must3cooperate with federal and state agencies, interested organizations,4and individuals to effect an active public beverage alcohol awareness5program;6

(7) Monitor and regulate the practices of licensees as necessary7in order to prevent the theft and illegal trafficking of liquor8pursuant to RCW 66.28.350;9

(8) Perform all other matters and things, whether similar to the10foregoing or not, to carry out the provisions of this title, and has11full power to do each and every act necessary to the conduct of its12regulatory functions, including all supplies procurement, preparation13and approval of forms, and every other undertaking necessary to14perform its regulatory functions whatsoever, subject only to audit by15the state auditor. However, the board has no authority to regulate16the content of spoken language on licensed premises where wine and17other liquors are served and where there is not a clear and present18danger of disorderly conduct being provoked by such language or to19restrict advertising of lawful prices.20

PART VII21Cannabis Health and Beauty Aid Exemption22


(1) Cannabis health and beauty aids are not subject to the25regulations and penalties of this chapter that apply to marijuana,26marijuana concentrates, or marijuana-infused products.27

(2) For purposes of this section, "cannabis health and beauty28aid" means a product containing parts of the cannabis plant and29which:30

(a) Is intended for use only as a topical application to provide31therapeutic benefit or to enhance appearance;32

(b) Contains a THC concentration of not more than 0.3 percent;33(c) Does not cross the blood-brain barrier; and34(d) Is not intended for ingestion by humans or animals.35

PART VIII36Signage and Public Notice Requirements37

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(1) Applicants for a marijuana producer's, marijuana processor's,3marijuana researcher's or marijuana retailer's license under this4chapter must display a sign provided by the state liquor and cannabis5board on the outside of the premises to be licensed notifying the6public that the premises are subject to an application for such7license. The sign must:8

(a) Contain text with content sufficient to notify the public of9the nature of the pending license application, the date of the10application, the name of the applicant, and contact information for11the state liquor and cannabis board;12

(b) Be conspicuously displayed on, or immediately adjacent to,13the premises subject to the application and in the location that is14most likely to be seen by the public;15

(c) Be of a size sufficient to ensure that it will be readily16seen by the public; and17

(d) Be posted within seven business days of the submission of the18application to the state liquor and cannabis board.19

(2) The state liquor and cannabis board must adopt such rules as20are necessary for the implementation of this section, including rules21pertaining to the size of the sign and the text thereon, the textual22content of the sign, the fee for providing the sign, and any other23requirements necessary to ensure that the sign provides adequate24notice to the public.25

(3)(a) A city, town, or county may adopt an ordinance requiring26individual notice by an applicant for a marijuana producer's,27marijuana processor's, marijuana researcher's, or marijuana28retailer's license under this chapter, sixty days prior to issuance29of the license, to any elementary or secondary school, playground,30recreation center or facility, child care center, church, public31park, public transit center, library, or any game arcade admission to32which is not restricted to persons aged twenty-one years or older,33that is within one thousand feet of the perimeter of the grounds of34the establishment seeking licensure. The notice must provide the35contact information for the liquor and cannabis board where any of36the owners or operators of these entities may submit comments or37concerns about the proposed business location.38

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(b) For the purposes of this subsection, "church" means a1building erected for and used exclusively for religious worship and2schooling or other activity in connection therewith.3

PART IX4Marijuana-Infused Products and Concentrates5


((Unless the context clearly requires otherwise, definitions of8terms shall be as indicated where used in this chapter:)) The9definitions in this section apply throughout this chapter unless the10context clearly requires otherwise.11

(a) "Administer" means to apply a controlled substance, whether12by injection, inhalation, ingestion, or any other means, directly to13the body of a patient or research subject by:14

(1) a practitioner authorized to prescribe (or, by the15practitioner's authorized agent); or16

(2) the patient or research subject at the direction and in the17presence of the practitioner.18

(b) "Agent" means an authorized person who acts on behalf of or19at the direction of a manufacturer, distributor, or dispenser. It20does not include a common or contract carrier, public21warehouseperson, or employee of the carrier or warehouseperson.22

(c) "Commission" means the pharmacy quality assurance commission.23(d) "Controlled substance" means a drug, substance, or immediate24

precursor included in Schedules I through V as set forth in federal25or state laws, or federal or commission rules.26

(e)(1) "Controlled substance analog" means a substance the27chemical structure of which is substantially similar to the chemical28structure of a controlled substance in Schedule I or II and:29

(i) that has a stimulant, depressant, or hallucinogenic effect on30the central nervous system substantially similar to the stimulant,31depressant, or hallucinogenic effect on the central nervous system of32a controlled substance included in Schedule I or II; or33

(ii) with respect to a particular individual, that the individual34represents or intends to have a stimulant, depressant, or35hallucinogenic effect on the central nervous system substantially36similar to the stimulant, depressant, or hallucinogenic effect on the37

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central nervous system of a controlled substance included in Schedule1I or II.2

(2) The term does not include:3(i) a controlled substance;4(ii) a substance for which there is an approved new drug5

application;6(iii) a substance with respect to which an exemption is in effect7

for investigational use by a particular person under Section 505 of8the federal Food, Drug and Cosmetic Act, 21 U.S.C. Sec. 355, to the9extent conduct with respect to the substance is pursuant to the10exemption; or11

(iv) any substance to the extent not intended for human12consumption before an exemption takes effect with respect to the13substance.14

(f) "Deliver" or "delivery," means the actual or constructive15transfer from one person to another of a substance, whether or not16there is an agency relationship.17

(g) "Department" means the department of health.18(h) "Dispense" means the interpretation of a prescription or19

order for a controlled substance and, pursuant to that prescription20or order, the proper selection, measuring, compounding, labeling, or21packaging necessary to prepare that prescription or order for22delivery.23

(i) "Dispenser" means a practitioner who dispenses.24(j) "Distribute" means to deliver other than by administering or25

dispensing a controlled substance.26(k) "Distributor" means a person who distributes.27(l) "Drug" means (1) a controlled substance recognized as a drug28

in the official United States pharmacopoeia/national formulary or the29official homeopathic pharmacopoeia of the United States, or any30supplement to them; (2) controlled substances intended for use in the31diagnosis, cure, mitigation, treatment, or prevention of disease in32individuals or animals; (3) controlled substances (other than food)33intended to affect the structure or any function of the body of34individuals or animals; and (4) controlled substances intended for35use as a component of any article specified in (1), (2), or (3) of36this subsection. The term does not include devices or their37components, parts, or accessories.38

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(m) "Drug enforcement administration" means the drug enforcement1administration in the United States Department of Justice, or its2successor agency.3

(n) "Electronic communication of prescription information" means4the transmission of a prescription or refill authorization for a drug5of a practitioner using computer systems. The term does not include a6prescription or refill authorization verbally transmitted by7telephone nor a facsimile manually signed by the practitioner.8

(o) "Immediate precursor" means a substance:9(1) that the commission has found to be and by rule designates as10

being the principal compound commonly used, or produced primarily for11use, in the manufacture of a controlled substance;12

(2) that is an immediate chemical intermediary used or likely to13be used in the manufacture of a controlled substance; and14

(3) the control of which is necessary to prevent, curtail, or15limit the manufacture of the controlled substance.16

(p) "Isomer" means an optical isomer, but in subsection (((z)))17(bb)(5) of this section, RCW 69.50.204(a) (12) and (34), and1869.50.206(b)(4), the term includes any geometrical isomer; in RCW1969.50.204(a) (8) and (42), and 69.50.210(c) the term includes any20positional isomer; and in RCW 69.50.204(a)(35), 69.50.204(c), and2169.50.208(a) the term includes any positional or geometric isomer.22

(q) "Lot" means a definite quantity of marijuana, marijuana23concentrates, useable marijuana, or marijuana-infused product24identified by a lot number, every portion or package of which is25uniform within recognized tolerances for the factors that appear in26the labeling.27

(r) "Lot number" ((shall)) must identify the licensee by business28or trade name and Washington state unified business identifier29number, and the date of harvest or processing for each lot of30marijuana, marijuana concentrates, useable marijuana, or marijuana-31infused product.32

(s) "Manufacture" means the production, preparation, propagation,33compounding, conversion, or processing of a controlled substance,34either directly or indirectly or by extraction from substances of35natural origin, or independently by means of chemical synthesis, or36by a combination of extraction and chemical synthesis, and includes37any packaging or repackaging of the substance or labeling or38relabeling of its container. The term does not include the39

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preparation, compounding, packaging, repackaging, labeling, or1relabeling of a controlled substance:2

(1) by a practitioner as an incident to the practitioner's3administering or dispensing of a controlled substance in the course4of the practitioner's professional practice; or5

(2) by a practitioner, or by the practitioner's authorized agent6under the practitioner's supervision, for the purpose of, or as an7incident to, research, teaching, or chemical analysis and not for8sale.9

(t) "Marijuana" or "marihuana" means all parts of the plant10Cannabis, whether growing or not, with a THC concentration greater11than 0.3 percent on a dry weight basis; the seeds thereof; the resin12extracted from any part of the plant; and every compound,13manufacture, salt, derivative, mixture, or preparation of the plant,14its seeds or resin. The term does not include the mature stalks of15the plant, fiber produced from the stalks, oil or cake made from the16seeds of the plant, any other compound, manufacture, salt,17derivative, mixture, or preparation of the mature stalks (except the18resin extracted therefrom), fiber, oil, or cake, or the sterilized19seed of the plant which is incapable of germination.20

(u) "Marijuana concentrates" means products consisting wholly or21in part of the resin extracted from any part of the plant Cannabis22and having a THC concentration greater than ((sixty)) ten percent.23

(v) "Marijuana processor" means a person licensed by the state24liquor and cannabis board to process marijuana into marijuana25concentrates, useable marijuana, and marijuana-infused products,26package and label marijuana concentrates, useable marijuana, and27marijuana-infused products for sale in retail outlets, and sell28marijuana concentrates, useable marijuana, and marijuana-infused29products at wholesale to marijuana retailers.30

(w) "Marijuana producer" means a person licensed by the state31liquor and cannabis board to produce and sell marijuana at wholesale32to marijuana processors and other marijuana producers.33

(x) "Marijuana products" means useable marijuana, marijuana34concentrates, and marijuana-infused products as defined in this35section.36

(y) "Marijuana-infused products" means products that contain37marijuana or marijuana extracts, are

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