Washington State Regulation Analysis
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:
- 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 Producer/Processor License – Since the producing of marijuana and extractions for concentrates is integrated, the Department is offering a hybrid license of the two processes.
- 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.
- 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.
There will be a 30-day window to apply for any of these licenses once the Board has approved final regulations and issued applications for approval.
Download PDF of the current draft regulations to open a dispensary in Washington.
CANNA PROPOSALS 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 Producer/Processor License Application Fee: $500.00
- 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*
CANNA PROPOSALS recommends that between $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.