Washington State Officials Consider Massive Overhaul of Legal Marijuana Program

Washington State legalized marijuana in 2012, and now, nearly seven years later, state officials are proposing laws that would overhaul the legal marijuana system, including legalizing home delivery for patients and boosting minority ownership of marijuana businesses.

Rick Garza, director of the Washington State Liquor and Cannabis Board, told the Associated Press that the overhaul is being dubbed “Cannabis 2.0”.

“We’ve typically been so challenged with the issues of the day we haven’t been looking out long-term to determine what the future looks like,” says Garza, who notes that “Cannabis 2.0” is meant to give the state a clearer image of what the marijuana industry will look like in five years and beyond.

One issue the board is considering is abandoning the state’s seed-to-sale marijuana tracking program in favor of a system where businesses report their transactions to the board and are then audited. They’re also considering whether or not to allow marijuana exports, as Oregon has done.

According to the Associated Press, for the next session of the Legislature, the board has proposed two bills. One would create what some critics describe as a long-overdue “social equity” program, encouraging greater ownership of marijuana businesses by minorities, women and military veterans. Part of the rationale of legalizing marijuana in Washington state in 2012 was to remedy the disproportionate effect the drug war has had on people of color, but minority ownership of cannabis businesses in the state remains paltry.

Garza says that while Washington is not currently issuing any more marijuana licenses, 11 of the more than 500 retailers have surrendered their licenses. Under the board’s proposal, those could be reissued, or, if cities or counties agree to increase the number of shops within their boundaries, new licenses could be granted — this time, to participants in the social equity program.

Businesses would be eligible if they are owned by a woman, minority or veteran, or if a majority of its ownership group are members of a “protected class” under state anti-discrimination law. Applicants would be barred from consideration if any owner already has a majority share of another cannabis retail license.

The AP states that the legislation would also create a technical assistance program run by the Department of Commerce that would provide grants totaling at least $100,000 per year to help minority-, woman- or veteran-owned businesses navigate the licensing process, receive compliance and financial training, and buy equipment, software or facilities.

The Washington CannaBusiness Association, an industry group, said it agrees there is a need for a social equity program, and it’s been working on its own version.

“We think there’s an opportunity to go even beyond” what the board is proposing, said spokesman Aaron Pickus.

Another legislative proposal would allow struggling “tier one” producers — the smallest size, limited to 2,000 square feet (186 square meters) of plants — to sell a medical-grade product directly to the state’s 36,000 registered marijuana patients. The patients have long complained that they have a hard time finding medical-grade cannabis, which must go through additional testing for pesticides and heavy metals, in retail stores, and Garza said the proposal could help the patients while giving the growers an incentive to offer a more medically compliant product.

The tier-one growers could sell to patients onsite, with other growers at indoor farmers-market-style locations, or by delivery, Garza said. Local jurisdictions would have to approve and to avoid competition with other licensed retailers, the growers or farmers markets would have to be at least 3 miles (4.8 km) away from established retailers.

Any proposal to allow delivery or sales by small growers is certain to be controversial, as other retailers might object to additional competition. Garza said the board will consider industry feedback.

“There’s going to be real concerns by retailers out there,” he said. “If we’re going to do that, we’ve got to be cautious.”

Even more significantly for the smallest growers, the board wants to allow them to expand, first to 5,000 square feet (465 square meters) and then possibly to 8,000 square feet (743 square meters). Those producers have long complained the tier-one licenses, designed to ensure craft growers have a place in the market, are so restrictive that they can’t succeed. Though they must make similar investments in security, insurance, and product tracking as the largest growers, they are allowed to grow and sell only a tiny fraction of what the largest growers produce.

Paige Berger, CEO of Hygge Farms in Onalaska, said she’s excited about the board’s proposal. She initially obtained a tier-one license because she didn’t have enough money to invest in a larger operation. Now, she said, she’s hamstrung by her limited size: She can only produce enough marijuana to have the product in 10 licensed cannabis shops.

“I can’t get out there and expand my brand to what I think it could do,” Berger said.

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