Washington State is one of two states that have legalized cannabis for recreational use through Initiative 502. Therefore, a newly developed regulatory system is being created to govern this new type of market and legal marijuana in Washington. There are categories developed within the recent draft regulations which identify how each license is issued, taxed, and directly integrated in the supply chain process:
There are three types of marijuana licenses:
Marijuana Producer License - Cultivation license used to grow marijuana and sell to a licensed Marijuana Processor Marijuana Retailer.
Marijuana Processor License - A license to create MIP (marijuana-infused products) and sell to a licensed marijuana retailer.
Marijuana Retail License - A retail license to sell only useable marijuana, marijuana-infused products, and marijuana paraphernalia in retail outlets to persons twenty-one years of age and older.
*No business may hold all three licenses. A licensee may hold both a producer and a processer license. However, a producer or processor may not also be a retailer. The number of retail licenses will be limitted.
Financier - This level of involvement indicates any person or entity who has made or will make an investment in the licensed business of more than ten thousand dollars. A "financier" can be someone who provides money as a gift, someone who loans money to the business and expects to be paid back the amount of the loan without interest, or someone who invests money into the business expecting a percentage of the profits, but accepts the risk that there may not be a full return on the investment.
The business applying for a marijuana license can be partnerships, employee cooperatives, associations, nonprofit corporations, corporations, and limited liability companies and must be formed in Washington.
Producer License Fees
Processor License Fees
Retailer License Fees
Below is a link to frequently asked questions about the I-502 rules in reference to licensing, testing, growing, processing, and the operating of a retail location.
FAQs on I-502 Rules
UPDATES: Emergency Rules Regarding Marijuana Infused Products
The Washington State Liquor Control Board filed emergency rules with the Code Reviser’s Office to revise current recreational marijuana rules regarding marijuana-infused product requirements, prohibited marijuana-infused products, security and surveillance at a marijuana licensed premises. These emergency rules are needed to replace the previous emergency rules which expired on October 23, 2014.
The board approved emergency rules for WAC 314-55-077, WAC 314-55-079, WAC 314-55-083, WAC 314-55-103 and WAC 314-55-104.
The rules become effective, October 22, 2014, and expire February 19, 2015.
• Rules 1
• Rules 2
• Rules 3
Lottery Details Summary
Washington State’s Liquor Control Board has completed the initial phase of its lottery for the state’s 334 legal retail marijuana licenses.
The board posted the results of the lottery on its website which ranks all 1,175 applicants within their corresponding jurisdictions. The rankings outline which applicants will move to the final stage of the licensing process, where the liquor board will examine their business models and run background checks.
If a business fails to meet specific standards it will removed from the rankings and the next business will be bumped into contention.
Out of 122 jurisdictions in the state of Washington, 75 required a lottery because the state received more applications than the number of available licenses.
The rankings were generated through a Seattle based company that works with the Washington State Lottery. Applicants who did not win a license have the opportunity to appeal the process.
*View more details about the lottery on the Washington State Liquor Control Board’s website: Lottery FAQ’s
General analysis on application requirements for types of marijuana licenses
Comprehensive merit-based application process will require information about the company applying, defined site locations, proof of capitalization, and other specifically detailed Marijuana Producing, Marijuana Processing, and Marijuana Retail business and operations plans.
A Marijuana Retailer is prohibited from obtaining cannabis or MIP's from outside the State of Washington and can only obtain it from a registered Marijuana Producer or Marijuana Processer.
Draft regulations require any Marijuana Producers, Marijuana Processors, or Marijuana Retailers, to be sited no less than 1000 feet of the perimeter of any elementary or secondary schools, playgrounds, recreation centers or facilities, child care centers, public parks, public transit centers, libraries, game arcades, or where admission is not restricted to persons twenty-one years of age or older.
All applicants and employees working in each licensed establishments must be at least twenty-one years of age.
Marijuana licensees may not allow the consumption of marijuana or marijuana-infused products on the licensed premises.
Regulations require all licensed establishments to maintain a complete seed-to-sale inventory control system, to monitor the chain of custody and current whereabouts,in real time, of medical marijuana from the point that it is harvested from a Marijuana Producer or Processer, and sold to a Marijuana Retailer.
Laboratory testing is required on testing for traces of pesticides/mildew and determining THC/CBD content, overall quality, and potency. A comprehensive QA/QC process will be implemented.
Marijuana must be cultivated in an enclosed, locked facility.
(MIP) Marijuana-Infused Products are allowed to be created by a licensed Marijuana Processor to be sold to a Marijuana Retailer
Adults 21 and over are allowed a single transaction per visit which is limited to one ounce of useable marijuana, sixteen ounces of marijuana-infused product in solid form, and seventy-two ounces of marijuana-infused product in liquid form.
For those individuals and groups interested in applying for more than the number permitted licensed locations, a random drawing will be conducted to determine those entities eligible to apply for a license.
A marijuana retailer licensee may sell useable marijuana, marijuana-infused products, and marijuana paraphernalia between the hours of 6am and 2am.
A marijuana extract does not meet the definition of a marijuana-infused product therefore cannot be sold at a Marijuana Retailer store in the form of hash, oil, or concentrated wax. In addition there is special instruction and training on using closed-loop extraction systems.
There are four categories of the regulatory violation structure. These include public safety, regulatory-related, license-related, and one specifically for producers. Producers have the most emphasis in regards to violations, some that could force the producer to destroy up to 50% of harvestable plants for multiple violations.
A special "Board" will oversee the licensing process and its implementation in cooperation with the Washington Department of Revenue and State Police. The Washington Department of Agriculture standards will be used to govern all Marijuana Producers gardening methods.
State financial requirements to open a dispensary in Washington
Marijuana Producer License Application Fee...............................................$250.00
Marijuana Processor License Application Fee..............................................$250.00
Marijuana Retailer License Application Fee..................................................$250.00
Marijuana License Excise Tax - 25% of selling price of all products sold
Each license has an annual fee for issuance and renewal for $1000.00*
$75,000.00 - $350,000.00 in starting capital could be necessary to pay the expenses involved with development of your dispensary business plans, securing site locations, any consulting fees accrued, and paying all state financial requirements to receive a Marijuana Producer, Marijuana Processor, or Marijuana Retailer license. There will be additional costs when applying for more than one of any type of these licenses if selected during the addtional random drawing process.
This may or may not include the amount needed to develop either the marijuana cultivation and production site, MIP processing plant, or Marijuana Retail locations. For Marijuana Producers only, it is imperative to have the necessary operations costs covered for up to 2-4 months during initial cultivation cycle after receiving a license to operate. Please contact us for more information on how to open a dispensary in Washington.