1. Mary B. Segawa M.S. December 3, 2014
I-502 Implementation Creating Washington’s system of legalized marijuana
Mary B. Segawa M.S.
December 3, 2014

2. Overview Today’s Presentation Disclaimer I-502 key elements
Agency objective for implementing I-502
Rules highlights
Licenses
Sales activity
Education and outreach
Issues and challenges
Staying connected

3. Disclaimer
Today’s presentation is designed to inform this audience of the current status of Initiative 502’s implementation.
The views expressed today represent the speaker’s summary of these current events and are subject to change based on the final decisions of the Board.

4. I-502 Background The initiative The sponsors and supporters The vote
License and regulate marijuana production, distribution, and possession for persons over twenty-one
Remove state-law criminal and civil penalties for activities that it authorizes
Tax marijuana sales
Earmark marijuana-related revenues
The sponsors and supporters
New Approach Washington
Law enforcement, health professionals, educators, ACLU
The vote
Passed 56% to 44%

5. I-502 Key Elements Legalized for adults age 21 and older
1 ounce of useable
16 ounces in solid form
72 ounces in liquid form
[7 grams of extract – added in the 2014 legislative session]
Three-tier system of growing, processing and retailing
Taxation
25% tax at all three license levels
B&O and local sales tax apply
Earmarks revenue for healthcare, research and education

6. Agency Objective Public Safety Agency Role and Responsibilities
Create a tightly controlled and regulated marijuana market
Agency Role and Responsibilities
Created a 3-tier regulatory system for marijuana
Created licenses for producer, processor and retailer
Enforcing laws and rules pertaining to licensees
Collecting and distributing taxes/fees

7. Law and Rules The Difference Between I-502 Laws and Rules Laws (RCW)
Enacted by Legislature and signed by Governor
Enacted by voters (initiatives and referendums)
Rules (WAC)
Detailed regulations necessary to implement the law
Clarifies what is allowed or not allowed under law
Created by state agency, board (WSLCB) or commission
Cannot change the law in any way
Public and transparent process
Once final, they provide the structure for participation in the system

8. Focus on Public Safety Laws and Rules
No one under 21 on any licensed premises
1,000 foot setback rule from specific child-centered locations
Advertising limits and restrictions
Traceability system
Compliance checks and enforcement of laws and rules
Production limits, caps on number of retail outlets

9. License Requirements Licensed Location: 1,000 Foot Measurement
1,000 foot buffer from specific child-centered locations
Costs and Fees
$250 application fee
$1,000 annual renewal fee
Additional fees for background check and filing for local business license
Taxes
Must attest that they are current on taxes owed to the Washington State Department of Revenue
Insurance
Required to carry commercial liability insurance

10. Public Safety Producer Structures Traceability
Secure indoor and outdoor grows, as well as greenhouses
Traceability
Software system that traces product from seed/clone to sale
LCB enforcement can match records to actual product on hand
Local Authority Objections
Substantial weight given to a local authority during the renewal process based upon chronic illegal activity associated with the licensee’s operation of the premises

11. Public Safety Background Checks Security and Safeguards
Personal criminal history form
Fingerprinting of all potential licensees
WSP and FBI background checks of licensees and financiers
Security and Safeguards
Alarm and surveillance video camera requirements (including minimum pixels and lockbox encasement)
Strict transportation and record keeping requirements (no third party transport of product)
Hours of operation limited to 8:00 a.m. to 12:00 a.m.

12. Public Safety Violation Guidelines Child Resistant Packaging
$1,000 administrative penalty for minors frequenting
Sets strict tiered system of violation record over a three year period. Example:
Group 1 public safety:
First violation: 10 day suspension or $2,500
Second violation: 30 day suspension
Third violation: license cancellation
Furnishing marijuana to a minor remains a felony offense
Child Resistant Packaging
Specific requirements for marijuana and marijuana infused products in solid and liquid forms

13. Public Safety Advertising Restrictions
No advertising within 1,000 feet of schools, public parks, transit centers, arcades, and other areas where children are present
May not contain statements or illustrations that:
are false or misleading
promote overconsumption
represent that its use has curative or therapeutic effects
depicts a child or may be appealing to children
All advertising must contain two statements:
“This product has intoxicating effects and may be habit forming.”
“Marijuana can impair concentration, coordination, and judgment. Do not operate a vehicle or machinery under the influence of this drug.”

14. Public Safety Limits on Retail Stores Behind the Counter Storage
Allocated 334 retail licenses statewide to cities and counties to ensure dispersion.
In areas where applications outnumbered available licenses, lotteries were held to award licenses
Behind the Counter Storage
No open containers or handling of product
Sniff jars with sealed, screened-top lids allowed

15. Consumer Safety Strict Packaging and Labeling Requirements
Package limits
10 mg of THC per serving
100 mg of THC per product
A single unit of marijuana-infused extract for inhalation cannot exceed one gram
Lot number
Warning label
Net weight and concentration of THC
Usage warnings (specific warning for ingestible foods and/or liquids about effect delays)
Upon request
Third party lab that tested lot and results
All pesticides, herbicides, fungicides found in product

16. Consumer Safety Further restrictions for infused, edible products
No gummy candies, lollipops, cotton candy, or brightly colored products.
Cannot be especially appealing to children
4 millimeter plastic minimum
Re-sealable packaging
No easy-open devices
Poison Prevention Act compliant

17. Funding Disbursements
Quarterly allocations per I-502
Dept. of Social and Health Services
Healthy Youth and Young Adult Surveys $125,000
Contract with the WA Institute for Public $50, Policy for cost-benefit evaluation
Univ. of Washington Alcohol & Drug Abuse Institute
Web-based public education $5, (
Liquor Control Board
Administration and regulation $1,250,000

18. Funding Disbursements (Qtrly)
Of the remaining funds:
DSHS Prevention and reduction of substance abuse 15 percent
DOH Marijuana education & public health program 10 percent
UW Research on short- and long-term effects percent
WSU Research on short- and long-term effects .4 percent
Basic Health Trust Fund Account 50 percent
WA HCA Contracts with community health centers percent
OSPI Drop-out prevention percent
General Fund Remainder

19. Current Status 80+ retail stores licensed
Increased scrutiny of infused edibles
Local moratoria, bans
Unregulated medical market

20. Adult vs. Medical Market
Adult (Recreational)
Medical
Taxed and regulated
Untaxed, largely unregulated
Possession of
1 ounce useable
16 ounces solid
72 ounces liquid
7 grams extract
Possession of 24 ounces of useable
Must be 21 years of age or older
May be authorized by anyone 18 and over, and under 18 with parent permission
No home grows
Allows personal grows, collective gardens
Cannot be used in view of the public
No public consumption

21. Civil/Criminal Laws Infraction/Crime Penalty
Possession above legal limit
More than 1 oz. up to 40 grams
More than 40 grams
With intent to distribute
Misdemeanor (24 hrs – 90 days, max $1,000)
Felony (5 years, max $10,000)
Opening or consuming marijuana or marijuana product in public view
District Ct: Class 3 civil infraction (avg. $127 w/fees); Municipal Ct: Varies
Cultivation - any amount
Sale or distribution
Any amount
To a minor at least 3 years younger
Felony (10 years, max $10,000)
Cultivation, sale or distribution within 1000’ of school, public park, etc.
Punishable by double the fines and imprisonment
State and federal enhancements exist for locations such as school zones and drug-free zones.

22. Education and Outreach
Dedicated website –
Consumer Guide and Parent Education materials
Tool Kit distributed to communities

23. Education and Outreach
Initial media campaigns
Radio
Social Media – Digital ads
Electronic billboards
Forums
DOH Public Education campaign
Current focus – parents, will include youth next year
Digital ads resulted in 39,000 visits to website
WA State Department of Health
WA Traffic Safety Commission

24. Future Plans DSHS Division of Behavioral Health & Recovery
Youth and young adult surveys
Treatment
Youth prevention for targeted communities
Department of Health
Media-based education campaigns for adults and youth
Local grants
Public health hotline
Washington State Institute for Public Policy
Cost-benefit evaluation
Young adult survey
Population with the highest rate of marijuana use
Goal: Reach young adults in universities, community colleges, trade schools, military, and those not in school.

25. Preliminary Evaluation Plans
Examining impacts of I-502 on:
Public health
Usage rates
Public safety and criminal justice
Economy
State and local agencies
Reports due to the legislature in September 2015, 2017, 2022, and 2032
Analysis of administrative and survey data from national, state, and local sources
Collection and analysis of primary data
Systematic literature reviews and meta-analysis
Benefit-cost analysis using WSIPP’s ROI model
Value-neutral
We do not have preconceived notions of whether, on balance, legalization will be beneficial or detrimental
Current use, lifetime use, age of initiation, abuse/dependency
Amount of use
Does marijuana use among current users increase after legalization?
Examine changes in these indicators as they relate to alcohol, tobacco, and illicit drugs
Are people substituting marijuana for other substances? Does concurrent use of substances increase? Public safety and criminal justice:
Impacts on police, court system, jail and prison systems, etc.
Economic:
Job creation, workplace safety
State and local agencies :
Costs associated with staff time (e.g. LCB), provision of prevention and treatment services (e.g., DBHR)
Tax revenues from sale of marijuana distributed to agencies
Impact of research, education, prevention, and intervention programs on marijuana use
Health costs associated with marijuana use and decriminalization of marijuana
e.g., costs associated with lack of product safety and quality control
Changes in epidemiologic indicators
e.g., marijuana-related MVC, alcohol-related MVC, vital statistics

26. Potential Issues Federal Guidelines Minimizing Illicit Market
Doesn’t change federal law
Focuses on eight points of emphasis including youth access and public safety
Minimizing Illicit Market
Balancing product demand with production and over-production
Medical Marijuana
Uneven playing field, competing system that is largely untaxed and unregulated
Confusion over what is/isn’t allowed and which locations are/aren’t licensed
Banking
Dept. of the Treasury allows banks to do business with marijuana licensees

27. Staying Connected Visit the I-502 Webpage. www.lcb.wa.gov Factsheets
FAQs
Timelines
YouTube video and/or audio of public forums
Listserv with over 10,800 subscribers to date
Webinars with city and county officials
Public hearings on rules are posted on website and publicized on the listserv
News coverage

28. WA State Liquor Control Board
9/13/2018
Thank you!
Mary Segawa, MS
WA State Liquor Control Board