I-502: How Washington’s Legalization Initiative Affects You. What You Should Know About the Good, the Bad, and the Ugly of I-502.

Generally, What Does I-502 Do?  State regulation of marijuana for recreational use;  Permits the sale of marijuana to persons 21-years of age or older without civil or criminal penalty;  Taxation of all marijuana transactions at a rate of 25%;  Decriminalization of possession of up to: 1 oz. of useable marijuana; 16 oz. of marijuana-infused product in its solid form; and 72. oz. of marijuana in its liquid form;  Green DUI for 5 nanograms (or more) of THC in bloodstream.

What is the Intent of I-502?  Specifically: “This measure authorizes the state liquor control board to regulate and tax marijuana for persons twenty-one years of age and older, and add a new threshold for driving under the influence of marijuana.” Part I, “Intent,” I-502.

Licensing and Regulation of Cannabis Producers, Processors, and Retailers.  Under I-502, all producers, processors, and retailers must apply for licenses from the State Liquor Control Board in order to produce, process, or sell cannabis for recreational use. Part III, Section 4 (1)-(3), I-502.  All applicable licenses are subject to the following regulations:  licenses shall be issued in the name of the applicant and must specify the location of operations.  The application fee for all licenses is $250.  The annual fee for issuance and renewal is $1,000.  Separate licenses are required for each location for proposed operations.

Standards for Obtaining a License: The Authority of the Liquor Control Board.  Whether the State Liquor Control Board issues a license will be within its direct discretion.  “Denial may be based on... the existence of chronic illegal activity documented in objections submitted to the Liquor Control Board.”  Every license issued will also be subject to all conditions and restrictions imposed by the initiative itself or by rules adopted by the state liquor control board.

What Other Rules Can the Liquor Control Board Adopt? The initiative specifically permits the Liquor Control Board to adopt supplemental rules to help it implement and enforce the initiative, including additional rules regarding:  The equipment used in, management of, and inspection of retail marijuana outlets or grow sites;  That books and records be created and maintained, with reports to be made and submitted to the liquor control board who may also inspect those records and books;  Methods of producing, processing, and packaging marijuana, including conditions of sanitation, standards of ingredients, quality, and identity of marijuana sold;  Security requirements for retail outlets and grow sites;  Screening, hiring, training, and supervising employees of licensees;  Retail outlet locations and hours of operation;  Labeling requirements and restrictions on advertisement;  Compliance forms for license application;  Times and periods when, and the manner, methods, and means by which, licensees will transport and deliver marijuana; and  Identification, seizure, confiscation, destruction, or donation to law enforcement for training purposes of all marijuana that is sold or meant to be sold.

Factors to Be Considered For License Application. The Board may:  inspect the premises proposed for operation;  inquire into all matters in connection with the construction and operation of the premises;  consider any prior criminal conduct of the applicant including an administrative violation history record with the state liquor control board and a criminal history record information check;  submit that criminal history record information check to the Washington state patrol and to the identification division of the federal bureau of investigation; The Board will:  not issue a license to anyone planning to operate within one thousand feet of the perimeter of any “elementary or secondary school, playground, recreation center or facility, child care center, public park, public transit center, or library, or any game arcade admission to which is not restricted to persons aged twenty-one years or older.”  Require fingerprinting of any applicant whose criminal history record information check is submitted to the federal bureau of investigation.

What’s the Timeline for Implementation of I-502?  The Liquor Control Board must implement the following standards and rules by DECEMBER 1, 2013:  Procedures for licensing;  The maximum number of retail outlets that may be licensed per county;  The maximum quantity of marijuana a producer, processor, or retailer may have on site;  Determination of the nature, form, and capacity of all containers to be used by licensees to contain marijuana, including labeling requirements;  Establishment of classes of marijuana according to grade, condition, cannabinoid profile, or THC concentration;  Reasonable time, place, and manner restrictions and requirements regarding advertising of marijuana and its transportation and delivery; and  Accreditation requirements for testing laboratories used by licensees to demonstrate compliance with standards adopted by the state liquor control board.

Is Testing Mandatory Under I-502?  Short answer is YES!  Important to note: every licensed producer or processor MUST submit a sample of marijuana to an independent third-party tester that MUST meet the standards set forth by the Liquor Control board;  What if a sample isn’t up to par? If the sample fails to meet the Board’s accreditation standards, THE ENTIRE CROP FROM WHICH IT CAME MUST BE DESTROYED.

What About Advertising?  GENERALLY, CANNOT ADVERTISE:  Within 1,000 feet of “the perimeter of a school grounds, playground, recreation center or facility, child care center, public park, or library, or any game arcade admission to which is not restricted to persons aged twenty-one years or older”;  On or in a public transit vehicle or public transit shelter; or  On or in a publicly owned or operated property.  SPECIFICALLY, RETAILERS CANNOT:  display any signage in a window, on a door, or on the outside their storefront, that is visible to the general public from a public right-of- way, other than a single sign no larger than 1,600 square inches identifying the retail outlet by the licensee's business or trade name.  THE GOOD NEWS?  Merchandising within a retail outlet is not considered advertising under I-502.  Magazines are still okay.

What’s the Deal with Taxes Under I-502?  There will be a 25% marijuana excise tax on:  all wholesales of marijuana from a producer to a retailer or to another producer.  all wholesales of marijuana from a processor to a retailer.  ALL RETAIL SALES OF MARIJUANA that is separate and in addition to all state and local sales and use tax that apply to retail sales.  Where does this money go?  40% of the new revenue will go to the state general fund and local budgets, and the remainder dedicated to substance-abuse prevention, research, education and health care.

The Green DUI.  Green DUIs already exist in WA. The difference here is that law enforcement now has a tangible number to point to in order to assess a per se driving infraction based on alleged “intoxication.”  The initiative amends WA’s DUI laws to specifically include impairment testing for “THC concentration” through blood sampling performed by medical professionals.  If a person over the age of 21 has, within two hours after driving, more than 5 nanograms of THC in “their system,” they will receive a Green DUI.  There is a zero tolerance policy for any driver under the age of 21.  The Green DUI will be a gross misdemeanor for those drivers over the age of the 21 and may amount to a felony for those drivers under 21.