Washington is preparing for a radical overhaul of its marijuana regulations in what is being dubbed “Cannabis 2.0,” five years after the legal marijuana industry first took hold in the state.
Washington Liquor and Cannabis Board Director Rick Garza outlined some of the proposals earlier this month, which include initiatives to increase minority ownership of cannabis businesses, the establishment of medical marijuana home deliveries, and help smaller marijuana enterprises to compete with larger businesses.
Garza believes that the time is right to start planning for the future, now that the industry in Washington has moved from its infancy.
“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,” Garza said.
To prepare for this shift in focus, the board has entrusted other agencies with regulating certain aspects of the marijuana market. For instance, the Department of Ecology is now responsible for the certification of cannabis testing labs, while the Department of Financial Institutions oversees the ownership structures of marijuana businesses.
Product tracking system overhaul
Examples of the kind of big-picture issues the board may now concern itself with include redeveloping the state’s marijuana product tracking system. The current seed-to-sale tracking program has faced severe software issues which have left some businesses unable to operate at times. Instead, the board could implement a more conventional tracking system whereby businesses self-report their transactions and are then audited periodically.
Preparing for exports
The board is also considering whether to follow neighboring Oregon’s lead by preparing to export marijuana, in case the federal government moves to reschedule cannabis as a less rigidly-controlled substance. This seems more likely with most of the candidates for the 2020 Democratic nomination in favor of ending marijuana prohibition and the recent submission of a bill to reschedule the drug.
But for now, the board’s priority is two proposed bills to present to the state legislature when the next session starts.
Social equity program
The first would establish a social equity program within the marijuana industry aimed at ensuring increased ownership of marijuana businesses by people of color, women and military veterans.
This would mean that if new licenses to grow or trade marijuana are to be awarded in Washington, the applying business would be owned by a woman, minority or military veteran, or have majority ownership by these groups. The social equity program would only be open to applicants who do not already have a majority share of another business holding a marijuana license.
A further provision of this bill would establish a technical assistance program which would offer substantial grants to marijuana businesses eligible for the social equity program to assist them with their start-up costs.
The second proposed bill would allow small growers – those who hold a Tier One license – to sell medical marijuana directly to qualifying patients, instead of through retail stores and dispensaries. Medical marijuana must undergo more rigorous testing for pesticides and heavy metals before it is made available to patients, which has led to a shortage in supply at times. Garza thinks this proposal could increase access for patients by incentivizing small growers to offer medical-grade marijuana either through on-site purchases or delivery.
Of perhaps more significance to small growers in Washington is another provision in this proposal which would permit them to progressively expand their grow size. This has long been a bugbear for Tier One license holders who have similar costs as larger business in terms of security, insurance and product tracking, but can only sell a fraction of what these growers manage.