1. Recreational Marijuana Washington State Association of Counties Alan E Rathbun, Director Licensing and Regulation Division Lisa Reinke, Captain Region 1 Education and Enforcement Division November 21, 2013

2. Application Window Producers, Processors, and Retailers Open8:00 AM November 18, 2013 Close5:00 PMDecember 19, 2013 Online application through Business License Services (DOR) 2

3. Application Processing Includes: Verification of 1,000 foot buffer from Sensitive Areas Seeking Input from Local Authorities (Cities, Counties, Tribes, Port Authorities) Verification of Residency Entity Formed in Washington Criminal Background (WSP, FBI Fingerprints) Financial Investigation Review operating plan Final Inspection of location 3

4. Production Limits Total State-wide production is limited to 2,000,000 square feet of plant canopy Applicants must designate the size category of the production premises and the actual square footage in their premises that will be designated as plant canopy. There are three categories: Tier 1: Less than 2,000 square feet; Tier 2: 2,000 square feet to 10,000 square feet; Tier 3: 10,000 square feet to 30,000 square feet. 4

5. Production Limits, Cont. Reasons the LCB may reduce a licensee’s or applicants’ square footage designated to plant canopy: – If 50 percent production space used for plant canopy in the licensee’s operating plan is not met in the first year of operation; or – If the total amount of square feet of marijuana production exceeds two million square feet. 5

6. Rules Highlights: Public Safety Advertising Restrictions Lab Tested and Approved Strict Packaging and Labeling Requirements Store Signage and Product Warnings Child Resistant Packaging Security and Safeguards Violation Guidelines 6

7. Local Authority (LA) Input Notice of Application (Producer and Processor) sent to Local Authority. Similar to the Liquor Procedure LA Must Respond Within 20 Days with an approval or objection. May request an extension (In Writing) LA Failure to Respond within 20 Day Period will be viewed as “No objection” LA Notice on Retailers will await lottery selection (if necessary) 7

8. Objections Must be supported Will not consider objections based on local land use, ordinance, or existing moratoria Applicant will be notified of LA Objections Substantial weight given to objections based on chronic illegal activity (RCW 69.50.331(9)) If license issued over LA objection, LA may be granted an administrative hearing (RCW 34-05) 8

9. Reasons the Board May Seek Denial, Suspension or Cancellation WAC 314-55-050 Sixteen Elements If the Board seeks denial, applicant is given the opportunity for an administrative hearing Administrative hearing held before ALJ who crafts an “Initial Order.” Board reviews and issues Final Order Actions appealable in Superior Court 9

10. Renewal Notice Approximately 90 days prior to renewal, LA will receive notice of pending renewal and given an opportunity to object (Timeframe Crucial) Similar Process to application objection Board will be conducting random criminal history checks upon renewal 10

11. Retail Licenses 334 locations statewide Allocation posted on our website If we receive more applications than allotted in that jurisdiction…a lottery will be performed after pre- screening LAs notified after lottery 11

12. Retail Pre-Screening Verify 1,000 Foot Separation Criminal History Verify Residency and Entity Creation Verification of Applicant Age Verification that Location is Under Consideration by All Parties 12

13. Retail Lottery Protocols Under Development LA Notice and Remaining Application Processing After Lottery Selection 13

14. Enforcement Activities What to expect: Public Safety focus on youth access Packaging and labels compliance Advertising compliance Only allowable products are sold Hidden ownership Test results availability Security compliance Product limits Complaint investigations Theft reporting compliance 14

15. Enforcement Activities Initially: pre-license work – 1,000 foot measurements – Final inspection Retail Enforcement Operations: – 334 retail stores across the entire state – Retail store oversight for enforcement will reside with retail liquor enforcement – Compliance Program Compliance Checks – 3 per location per year Surveillance activity for youth access General premises checks to ensure regulatory compliance and detection of any criminal activity – Consuming in public enforcement around liquor licensed businesses – Assist non-retail as needed 15

16. Enforcement Activities Non Retail focus: – Producer and Processor oversight – Unannounced premises checks Spot checks for traceability compliance Destruction of product oversight – Transportation oversight (including surveillance) – Lieutenant will be liaison with local and state drug task forces – Bill of lading – Tax referrals – Primary liaison with new examiners – Plant canopy compliance – Operating Plan compliance 16

17. Staying Connected Visit the I-502 Webpage. www.liq.wa.govwww.liq.wa.gov Factsheets FAQs Timelines YouTube video and/or audio of public forums Listserv with over 6,700 subscribers to date 17

18. Thank you 18