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Board Approves Filing Of Proposed Rules To Implement Initiative 502 Recreational Marijuana Market To Be Tightly Regulated To Prevent Diversion, Impact To Minors

Klickitat County could become home to up to four state-licensed marijuana retail outlets under supplemental rules the state Liquor Control Board proposed last Wednesday, Sept. 5.

According to a preliminary store allocation list published by the Liquor Control Board, one store could locate in Goldendale, and another three could be sited at large, either in unincorporated areas of the county, or in Bingen or White Salmon.

Skamania County has been allocated two at-large stores. Among neighboring counties, Clark has been allotted 15 stores, Yakima 14, and Benton 10. All told, the Liquor Control Board capped the maximum number of marijuana stores at 334 statewide. The state will begin accepting applications for a 30-day period beginning Nov. 18, for producer, processor, and retailer licenses.

Locally, Klickitat County Port District No. 1 is not open to doing business with any marijuana-related enterprise; its board of commissioners recently adopted a policy to that effect. The City of White Salmon, for its part, is conducting an analysis of its zoning and land use laws to determine where marijuana facilities can be located in city limits.

The Liquor Control Board’s proposed supplemental rules, if ultimately enacted, will help govern Washington’s system of producing, processing, and retailing recreational marijuana, per Initiative 502 approved by voters last November.

The board earlier this summer filed proposed rules on July 3. The board chose to revise and re-file its rules after receiving public input at five public hearings across Washington last month. It’s the third time the board has revised its proposed rules, but the first time it has set limits on the number of allowable stores and growing operations.

Moreover, Washington got a “hands off” signal from the U.S. Department of Justice on Aug. 29. The Justice Department indicated in a memorandum from Attorney General Eric Holder that it would let the voter-approved legalization of marijuana move ahead, provided the state maintains strict controls over the budding industry.

“These rules fulfill the public expectation of creating a tightly-regulated and controlled system while providing reasonable access to participation in the market, said Liquor Control Board chairman Sharon Foster. “Importantly, we believe these rules meet the eight federal government enforcement priorities within [the Aug. 29] guidance memo from the Department of Justice.”

Key Public Safety Elements

Public safety is the top priority of the Liquor Control Board.

*All grows must meet strictly controlled on-site security requirements;

*Strict surveillance and transportation requirements;

*Robust traceability software system that will track inventory from start to sale;

*Criminal background checks on all license applicants;

*Tough penalty guidelines for public safety violations including loss of license;

*Restricting certain advertising that may be targeted at children.

Key Consumer Safety Elements

The proposed rules provide a heightened level of consumer safety that has not existed previously.

*Packaging and label requirements including dosage and warnings;

*Child-resistant packaging for marijuana in solid and liquid forms;

*Only lab tested and approved products will be available;

*Defined serving sizes and package limits on marijuana in solid form;

*Store signage requirements to educate customers.

Revisions to the Rules

Below are selected highlights found in the revised rules.

Production Limits

*Limits the total amount of marijuana to be produced at 40 metric tons.

*Sets the maximum amount of space for marijuana production at two million square feet.

Production Tiers

Creates three production tiers based on square footage:

*Tier 1 – less than 2000 square feet.

*Tier 2 – 2000 to 10,000 square feet.

*Tier 3 – 10,000 to 30,000 square feet.

Market Control Limits

*Limited any entity and/or principals within any entity to three producer or processor licenses.

*Limited any principal and or entity to no more than three retail licenses with no multiple location licensee allowed more than 33 percent of the allowed licenses in any county or city.

On-Site Product Limits

*Established the maximum amount of marijuana allowed on a producer licensee’s premises at any time based on the type of grow operation (indoor, outdoor, greenhouse).

1,000-Foot Buffer Measurement

*Changed the way the 1,000-foot buffer is measured from to “along the most direct route over or across established public walks, streets, or other public passageway between the proposed building/business locations to the perimeter of the grounds of the entities listed.”

Definitions

*Added a definition for “plant canopy” to clarify what area is considered in the square footage calculation for marijuana producers.

*Revised the definition of “Public Park” to include parks owned or managed by a metropolitan park district. Clarified that trails are not included in the definition of “Public Park.”

*Revised the definition of “recreation center or facility.” Added the language “owned and/or managed by a charitable non-profit organization, city, county, state, or federal government.”

Advertising

*Added language requiring all advertising and labels of useable marijuana and marijuana infused products may not contain any statement or illustration that is false or misleading.

Retail Stores

In addition to the revisions to the rules, the board also identified the number and allocation of retail stores. Per Initiative 502, the Liquor Control Board applied a method that allocates retail store locations using Office of Financial Management (OFM) population with a cap on the number of retail stores per county.

Using OFM population data as well as adult consumption data supplied by the state’s marijuana consultant -– BOTEC Analysis Corporation -- the board allocated a maximum of 334 outlets statewide. The most populous cities within the county are allocated a proportionate number of stores and at-large stores available to serve other areas of the county.

Timelines

Dec. 6, 2012 -- Effective date of new law;

Sept. 4, 2013 -- File Supplemental CR 102 with revised proposed rules;

Oct. 9, 2013 -- Public hearing(s) on proposed rules (time and location TBD);

Oct. 16, 2013 -- Board adopts or rejects proposed rules (CR 103);

Nov. 16, 2013 -- Rules become effective;

Nov. 18, 2013 -- Begin accepting applications for all three licenses (30-day window);

Dec. 1, 2013 -- Deadline for rules to be complete (as mandated by law);

Dec. 18, 2013 -- 30-day window closes for producer, processor, and retailer license applications.

Public Hearings

One or more public hearings on the proposed rules will be scheduled soon. The Liquor Control Board will post the dates and locations on its Web site at www.liq.wa.gov.

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