Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Commerce & Gaming Committee

SB 5121

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Background:

Overview of Initiative Measure No. 502.

Initiative Measure No. 502 (I-502) was a ballot measure approved by Washington voters in November 2012 that: (1) legalized the production, processing, possession, and personal use of marijuana; (2) created a framework for a regulatory scheme to be further developed by the Liquor Control Board (LCB) through its rule-making authority; and (3) revised provisions in criminal statute to accommodate such legalization in accordance with the requirements of the initiative.

Licensing of Marijuana Producers, Processors, and Retailers.

The LCB is authorized to issue three categories of commercial marijuana licenses: (1) the marijuana producer's license entitles the holder to produce marijuana for sale at wholesale to licensed marijuana processors or other producers; (2) the marijuana processor's license entitles the holder to process, package, and label marijuana for sale at wholesale to marijuana retailers and other processors; and (3) the marijuana retailer's license entitles the holder to sell marijuana products at retail prices in retail outlets. No license expressly permits the licensee to conduct research on marijuana.

The three categories of marijuana licenses are subject to identical regulations regarding initial application fees and renewal fees. The initial application fee is $250. The subsequent issuance and renewal fee, required annually, is $1,000.

Life Sciences Discovery Fund.

In 2005, the Life Sciences Discovery Fund (LSDF) was created to promote life science research in Washington. The LSDF was authorized to receive tobacco settlement strategic contribution payments and leverage these state contribution payments by providing grant opportunities to support life sciences research and development. The LSDF is managed by the LSDF Authority, governed by a board consisting of legislators and persons appointed by the Governor. The LSDF Authority solicits and reviews grant applications.

Summary of Bill:

A marijuana research license is created, allowing holders to produce, possess, and deliver marijuana for the purposes of:

testing chemical potency and composition;
conducting clinical investigations of marijuana-derived drug products;
conducting research on the efficacy and safety of marijuana use as medical treatment; and
conducting genomic and agricultural research.

The license application fee is $250, and the issuance and annual renewal fee is $1,000. Half of all fees collected from a research license must be deposited in the LSDF.

An applicant for a marijuana research license must submit to the LSDF Authority a description of the research it intends to conduct, and the LSDF Authority must review the proposal for compliance with the license requirements. The application must be denied if the LSDF Authority determines that the proposed research does not comply with the allowable areas of research or license requirements. The LSDF Authority must also review any research reports generated by licensees under LCB rules and determine the licensee's continued compliance with license requirements. Such reports are exempt from public disclosure if they contain proprietary information.

A marijuana research licensee may sell marijuana to other research licensees but not to any other person or entity. Research activities conducted under a valid research license do not constitute a violation of Washington state law.

Research licensees may contract with the University of Washington (UW) and Washington State University (WSU) to collaborate in marijuana research projects, which must be approved by the LSDF Authority. Both the UW and WSU are given authority to contract with licensees to conduct research.

The LCB has authority to make rules regarding application and renewal requirements, conditions, security, quantity of marijuana and marijuana products, reporting, and other matters related to the research license.