Washington: WSLCB Publish Their 2019 Cannabis Topics & Trends Alerts

Here’s the Table of Contents
Winter Edition 2019 – Cannabis
Topics

Board Approves Jan. 1, 2020 Effective Date for All Marijuana Products, Packaging and Labeling

Moving? 
Assigning Applications by Region – Update
Did You Know…
Trending Now: Use of Personal Funds and Ownership Changes
Pesticide Disclosures
Observations from the Field: Discounting Product Between Processors an Retailers
Paying Your Excise Tax
Legislative Session and the Licensing Process
2019 Legislative Session – Agency Proposed Legislation
Leaf Data Systems Update
Full Newsletter
https://data.lcb.wa.gov/stories/s/Topics-and-Trends-Marijuana-Winter-2018/tdtm-4fyz/

Board Approves Jan. 1, 2020 Effective Date for All Marijuana Products, Packaging and Labeling
On January 9, 2019 the Board approved a motion to make the effective date for all marijuana product, packaging and labeling requirements Jan 1, 2020. You can read more about product packaging and labeling requirements on the Understanding Board Interim Policies for Packaging and Labeling section of the LCB website. On this page, you’ll find the previously announced Board Interim Policies, approved colors and shapes, links to the recent webinar and accompanying PowerPoint, and other useful information.

Moving?
You cannot move your marijuana business without prior approval from the WSLCB.  Your license is tied to your location.  If you move without prior approval, the WSLCB may discontinue your license. 
As soon as you know you plan to move to a new location, apply for a change of location through Business Licensing Services, here.

Assigning Applications by Region – Update
In October, the Licensing Division began assigning applications by region. We made this change to improve consistency and communication between Licensing and Enforcement and to provide better customer service for licensees and applicants. So far the feedback from licensees has been positive.  

Did You Know…
Fire Marshal approval is required any time your extraction method requires the use of a closed-loop system or ethanol.  When processing an application to add these extraction types, your Licensing Specialist will ask for a copy of the Fire Marshal approval. If you plan to use ethanol in the extraction process, a Class 2 permit from the WSLCB is also required which allows you to purchase ethanol. You can find the application for a Class 2 permit here.   
WSLCB approval is required before you add any new extraction type. To start the process, submit an application to alter your operating plan.  

Trending Now: Use of Personal Funds
On December 12, 2018, the WSLCB passed Board Interim Policy (BIP) 06-2018 which allows marijuana licensees to spend personal funds on their marijuana business prior to the Board vetting the funds. Some key factors to note:

Funds can only be used once the WSLCB receives an Additional Funding Application.

The policy only applies to approved owners who are investing their own personal money into the business.

Licensing will investigate the source of the additional funds. 

If the source of funds is questionable, unverifiable, or determined by the WSLCB to be gained in a manner which is in violation of law, the WSLCB will conduct further investigation regarding the funds.

Ownership Changes

You must receive approval from the WSLCB before you make any changes to your license ownership, ( WAC 314-55-120)  including the addition or removal of any true party of interest (as defined in WAC 314-55-035).  If you want to make changes to your licensed entity, submit a Change in Governing People application. Until that application is processed and approved, we will not approve any other changes to your business.  Failure to report changes in ownership could lead to an enforcement investigation.

Pesticide Disclosures
As of January 1, 2019, marijuana retailers must provide all consumers, for as long as the products are for sale, a statement that discloses all pesticides applied to the marijuana plants and growing medium during production of the useable marijuana or the base marijuana used to create the concentrate or the extract added to infused products.  This information must be available to the consumer in the store prior to purchase, and may be provided by means of a web address, QR code, or hard copy inside the store.  The marijuana producer/processor may include this required information on the marijuana package, but it remains the responsibility of the marijuana retailer to ensure the information is available to the consumer prior to the marijuana product sale. 
Additionally, upon request of the retail customer, a marijuana retailer must disclose the name of the certified lab that conducted and the results of the required quality assurance tests for any marijuana or marijuana products the customer is purchasing or considering purchasing.  There is no provision in rule for referring the consumer to “look it up themselves” at a remote location or website, and the information must be provided in the store upon request.
WSLCB Enforcement officers will begin working with marijuana retailers to educate staff, check for violations, and take appropriate action to gain compliance.  You can review this recent rule change on the agency website.
Please contact your WSLCB Enforcement Officer if you have any questions about implementation and enforcement of this important public safety rule.

Observations from the Field: Discounting Product Between Processors and Retailers.  
It has come to our attention that processors are offering volume discounts to retailers on marijuana product. Licensees should be aware that this activity is not allowed. WAC 315-55-018 prohibits discounts between the manufacturing and retailer tiers and WAC 314-55-017prohibits processors from requiring the purchase of other products as a condition of a transaction. In the case of volume discounting, requiring retailers to purchase a specific amount of product in order to receive a discount directly conflicts with the WACs. Price on product should be sold uniformly across the industry regardless of the amount purchased or how much money is spent.

Paying Your Excise Tax
WAC 314-55-089 requires Marijuana Retail licenses to self-report their monthly marijuana product sales to the LCB using either the paper form (Retailers Sales and Excise Tax) or by using the point of sale system monthly summary report. Licenses are to report both the calculated tax amount and the amount of additional collected tax. When remitting the marijuana excise tax to the LCB, the greater of the collected vs. calculated is to be paid.  The collected marijuana excise tax may be paid by check, cashier’s check, money order or electronic funds transfer. 

Waiver
Licenses may apply for a payment waiver if they are able to show good cause by demonstrating they are:

In the process of getting a bank account

Have lost their bank

The bank has denied their application

Some other reason why they are unable to get money orders or a bank account. 

Payment Methods
Payments other than electronic funds, may be in person or by mail. When mailing a payment, the post mark date must be on or before the tax due date. 

Payments made by electronics fund transfer are considered received the date they are entered into Payment Station. 

Payments made in person, by electronic funds transfer or mail post marked or received after the tax due date will be assessed a two percent late payment penalty

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