WSR 15-05-038 EMERGENCY RULES LIQUOR CONTROL BOARD [Filed February 11, 2015, 1:31 p.m., effective February 11, 2015, 1:31 p.m.] Effective Date of Rule: Immediately upon filing.
Purpose: Emergency rules are needed to provide additional clarity to the marijuana rules regarding marijuana-infused products, specifically products that are appealing to children. The mission of the board is to keep alcohol, tobacco, and marijuana out of the hands of youth. Many marijuana-infused products on the medical marijuana market today are appealing to children. Products such as lollipops, gummy bears, and cotton candy are very appealing to children too young to read a label. Confusion exists in the recreational marijuana market on what is considered the "selling price," "paraphernalia," "consultants," and "intermediate products." Emergency rules are needed to define these areas. Marijuana licensees also need clarification on prohibited practices between the marijuana license tiers.
Citation of Existing Rules Affected by this Order: Amending WAC 314-55-010 and 314-55-077.
Statutory Authority for Adoption: RCW 69.50.328, 69.50.342, 69.50.345.
Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.
Reasons for this Finding: Immediate adoption of these rules is necessary for the preservation of the public health and safety. Marijuana infused products must not be appealing to children.
Clarity is needed so licenses [licensees] operate their marijuana businesses within the law to ensure public safety.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 2, Amended 2, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 2, Amended 2, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: February 11, 2015.
Jane Rushford
Chairman
AMENDATORY SECTION (Amending WSR 13-21-104, filed 10/21/13, effective 11/21/13)
WAC 314-55-010 Definitions.
Following are definitions for the purpose of this chapter. Other definitions are in RCW 69.50.101.
(1) "Applicant" or "marijuana license applicant" means any person or business entity who is considered by the board as a true party of interest in a marijuana license, as outlined in WAC 314-55-035.
(2) "Batch" means a quantity of marijuana-infused product containing material from one or more lots of marijuana.
(3) "Business name" or "trade name" means the name of a licensed business as used by the licensee on signs and advertising.
(4) "Child care center" means an entity that regularly provides child day care and early learning services for a group of children for periods of less than twenty-four hours licensed by the Washington state department of early learning under chapter 170-295 WAC.
(5) "Consultant" means an expert who provides advice or services in a particular field, whether a fee is charged or not. A consultant who is in receipt of, or has the right to receive, a percentage of the gross or net profit from the licensed business during any full or partial calendar or fiscal year is a true party of interest and subject to the requirements of WAC 314-55-035. A consultant who exercises any control over an applicant's or licensee's business operations is also subject to the requirements of WAC 314-55-035(4).
(6) "Elementary school" means a school for early education that provides the first four to eight years of basic education and recognized by the Washington state superintendent of public instruction.
(((6))) (7) "Financier" means any person or entity, other than a banking institution, that has made or will make an investment in the licensed business. A financier can be a person or entity that provides money as a gift, loans money to the applicant/business and expects to be paid back the amount of the loan with or without interest, or expects any percentage of the profits from the business in exchange for a loan or expertise.
(((7))) (8) "Game arcade" means an entertainment venue featuring primarily video games, simulators, and/or other amusement devices where persons under twenty-one years of age are not restricted.
(((8))) (9) "Intermediate product" means marijuana flower lots or other material lots that have been converted by a marijuana processor to a marijuana concentrate or marijuana-infused product that must be further processed prior to retail sale.
(10) "Library" means an organized collection of resources made accessible to the public for reference or borrowing supported with money derived from taxation.
(((9))) (11) "Licensee" or "marijuana licensee" means any person or entity that holds a marijuana license, or any person or entity who is a true party of interest in a marijuana license, as outlined in WAC 314-55-035.
(((10))) (12) "Lot" means either of the following:
(a) The flowers from one or more marijuana plants of the same strain. A single lot of flowers cannot weigh more than five pounds; or
(b) The trim, leaves, or other plant matter from one or more marijuana plants. A single lot of trim, leaves, or other plant matter cannot weigh more than fifteen pounds.
(((11))) (13) "Marijuana strain" means a pure breed or hybrid variety of Cannabis reflecting similar or identical combinations of properties such as appearance, taste, color, smell, cannabinoid profile, and potency.
(((12))) (14) "Member" means a principal or governing person of a given entity, including but not limited to: LLC member/manager, president, vice-president, secretary, treasurer, CEO, director, stockholder, partner, general partner, limited partner. This includes all spouses of all principals or governing persons named in this definition and referenced in WAC 314-55-035.
(((13))) (15) "Paraphernalia" means items used for the storage or use of usable marijuana, marijuana concentrates, or marijuana-infused products, such as, but not limited to, lighters, roach clips, pipes, rolling papers, bongs, and storage containers. Items for growing, cultivating, and processing marijuana, such as, but not limited to, butane, lights, and chemicals are not considered "paraphernalia."
(16) "Pesticide" means, but is not limited to: (a) Any substance or mixture of substances intended to prevent, destroy, control, repel, or mitigate any insect, rodent, snail, slug, fungus, weed, and any other form of plant or animal life or virus, except virus on or in a living person or other animal which is normally considered to be a pest; (b) any substance or mixture of substances intended to be used as a plant regulator, defoliant, or desiccant; and (c) any spray adjuvant. Pesticides include substances commonly referred to as herbicides, fungicides, and insecticides.
(((14))) (17) "Perimeter" means a property line that encloses an area.
(((15))) (18) "Plant canopy" means the square footage dedicated to live plant production, such as maintaining mother plants, propagating plants from seed to plant tissue, clones, vegetative or flowering area. Plant canopy does not include areas such as space used for the storage of fertilizers, pesticides, or other products, quarantine, office space, etc.
(((16))) (19) "Playground" means a public outdoor recreation area for children, usually equipped with swings, slides, and other playground equipment, owned and/or managed by a city, county, state, or federal government.
(((17))) (20) "Public park" means an area of land for the enjoyment of the public, having facilities for rest and/or recreation, such as a baseball diamond or basketball court, owned and/or managed by a city, county, state, federal government, or metropolitan park district. Public park does not include trails.
(((18))) (21) "Public transit center" means a facility located outside of the public right of way that is owned and managed by a transit agency or city, county, state, or federal government for the express purpose of staging people and vehicles where several bus or other transit routes converge. They serve as efficient hubs to allow bus riders from various locations to assemble at a central point to take advantage of express trips or other route to route transfers.
(((19))) (22) "Recreation center" or "facility" means a supervised center that provides a broad range of activities and events intended primarily for use by persons under twenty-one years of age, owned and/or managed by a charitable nonprofit organization, city, county, state, or federal government.
(((20))) (23) "Residence" means a person's address where he or she physically resides and maintains his or her abode.
(((21))) (24) "Secondary school" means a high and/or middle school: A school for students who have completed their primary education, usually attended by children in grades seven to twelve and recognized by the Washington state superintendent of public instruction.
(((22))) (25) "Selling price" has the same meaning as in RCW 82.08.010, except when the product is sold under circumstances where the total amount of consideration paid for the product is not indicative of its true value. For such purposes, "selling price" means the true value of the product sold as determined or agreed to by the board. For purposes of this subsection:
(a) "Product" means marijuana, marijuana concentrates, useable marijuana, and marijuana-infused products; and
(b) "True value" means market value based on sales at comparable locations in this state of the same or similar product of like quality and character sold under comparable conditions of sale to comparable purchasers. However, in the absence of such sales of the same or similar product, true value means the value of the product sold as determined by all of the seller's direct and indirect costs attributed to the product.
(26) "Unit" means an individually packaged marijuana-infused solid or liquid product meant to be eaten or swallowed, not to exceed ten servings or one hundred milligrams of active tetrahydrocannabinol (THC), or Delta 9.
NEW SECTION
WAC 314-55-017 Conditional sales prohibited.
Conditional sales of marijuana products are prohibited.
(1) Marijuana producers and processors are prohibited from requiring the purchase of other products and/or services by another marijuana licensee as a condition of a transaction of marijuana product. Products and services include, but are not limited to, paraphernalia, lighters, promotional items, unreasonable processing and/or packaging charges.
(2) Marijuana retailers are prohibited from requiring a customer to purchase other products and/or services as a condition to purchasing marijuana product. Products and services include, but are not limited to, paraphernalia, lighters, promotional items, memberships, and bags, boxes, or containers.
(3) The selling price of marijuana product must be indicative of the true value when sold without any other products or services.
NEW SECTION
WAC 314-55-018 Prohibited practices—Money advances—Contracts—Gifts—Rebates, etc.
(1) No industry member or marijuana retailer shall enter into any agreement which causes undue influence over another retailer or industry member. This rule shall not be construed as prohibiting the placing and accepting of orders for the purchase and delivery of marijuana that are made in accordance with usual and common business practice and that are otherwise in compliance with the rules.
(2) No marijuana producer or processor shall advance and no marijuana retailer shall receive money or moneys' worth under an agreement written or unwritten or by means of any other business practice or arrangement such as:
(a) Gifts;
(b) Discounts;
(c) Loans of money;
(d) Premiums;
(e) Rebates;
(f) Free product of any kind except as allowed by WAC 314-55-083; or
(g) Treats or services of any nature whatsoever except such services as are authorized in this rule.
(3) "Industry member" means a licensed marijuana producer, marijuana processor, marijuana retailer, their authorized representatives, and any affiliates, subsidiaries, officers, partners, financiers, agents, employees, and representatives of any industry member.
(4) No industry member or employee thereof shall sell to any retail licensee or solicit from any such licensee any order for any marijuana tied in with, or contingent upon, the retailer's purchase of some other marijuana, or any other merchandise, paraphernalia, property, or service.
(5) If the board finds in any instance that any licensee has violated this regulation, then all licensees involved shall be held equally responsible for such violation.
AMENDATORY SECTION (Amending WSR 14-10-044, filed 4/30/14, effective 5/31/14)
WAC 314-55-077 What is a marijuana processor license and what are the requirements and fees related to a marijuana processor license?
(1) A marijuana processor license allows the licensee to process, dry cure, package, and label usable marijuana, marijuana concentrates, and marijuana-infused products for sale at wholesale to marijuana retailers. A marijuana processor license also allows the licensee to process and package marijuana into intermediate products for sale at wholesale to other marijuana processors.
(2) A marijuana processor is allowed to blend tested useable marijuana from multiple lots into a single package for sale to a marijuana retail licensee providing the label requirements for each lot used in the blend are met and the percentage by weight of each lot is also included on the label.
(3) A marijuana processor licensee must obtain approval from the liquor control board for all marijuana-infused edible products, labeling, and packaging prior to offering these items for sale to a marijuana retailer. The marijuana processor licensee must submit a photo of the product, label, and package to the liquor control board for approval. If the liquor control board denies a marijuana-infused edible product for sale in marijuana retail outlets, the marijuana processor may request an administrative hearing per chapter 34.05 RCW, Administrative Procedure Act.
(4) Marijuana-infused edible products in solid form must meet the following requirements:
(a) If there is more than one serving in the package, each serving must be packaged individually in childproof packaging (see WAC 314-55-105(7)) and placed in the outer package.
(b) The label must prominently display the number of servings in the package.
(c) Marijuana-infused solid edible products must be homogenized to ensure uniform disbursement of cannabinoids throughout the product.
(d) All marijuana-infused solid edibles must prominently display on the label "This product contains marijuana."
(5) Marijuana-infused edible products in liquid form must meet the following requirements:
(a) If there is more than one serving in the package, a measuring device must be included in the package with the product.
(b) The label must prominently display the number of servings in the package and the amount of product per serving.
(c) Marijuana-infused liquid edibles must be homogenized to ensure uniform disbursement of cannabinoids throughout the product.
(d) All marijuana-infused liquid edibles must prominently display on the label, "This product contains marijuana."
(6) A marijuana processor is limited in the types of food or drinks they may infuse with marijuana ((to create an infused edible product)). Marijuana-infused products that are especially appealing to children are prohibited. Marijuana-infused products such as, but not limited to, gummy candies, lollipops, cotton candy, or brightly colored products, are prohibited.
(a) To reduce the risk to public health, ((food defined as)) potentially hazardous food as defined in WAC ((246-215-0115(88))) 246-215-01115 may not be infused with marijuana. ((These foods are)) Potentially hazardous ((as they)) foods require time-temperature control to keep them safe for human consumption and prevent the growth of pathogenic microorganisms or the production of toxins. ((The board may designate other food items that may not be infused with marijuana.)) Any food that requires refrigeration, freezing, or a hot holding unit to keep it safe for human consumption may not be infused with marijuana.
(((4))) (b) Other food items that may not be infused with marijuana to be sold in a retail store are:
(i) Any food that has to be acidified to make it shelf stable;
(ii) Food items made shelf stable by canning or retorting;
(iii) Fruit or vegetable juices (this does not include shelf stable concentrates);
(iv) Fruit or vegetable butters;
(v) Pumpkin pies, custard pies, or any pies that contain eggs;
(vi) Dairy products of any kind such as butter, cheese, ice cream, or milk; and
(vii) Dried or cured meats.
(c) Vinegars and oils derived from natural sources may be infused with dried marijuana if all plant material is subsequently removed from the final product. Vinegars and oils may not be infused with any other substance, including herbs and garlic;
(d) Marijuana-infused jams and jellies made from scratch must utilize a standardized recipe in accordance with 21 C.F.R. Part 150, revised as of April 1, 2013.
(e) Per WAC 314-55-104, a marijuana processor may infuse dairy butter or fats derived from natural sources and use that extraction to prepare allowable marijuana-infused solid or liquor products meant to be ingested orally, but the dairy butter or fats derived from natural sources may not be sold as stand-alone products.
(f) The liquor control board may designate other food items that may not be infused with marijuana.
(7) The recipe for any ((food infused with marijuana to make an edible product)) marijuana-infused solid or liquid products meant to be ingested orally must be kept on file at the marijuana ((producer's)) processor's licensed premises and made available for inspection by the ((WSLCB or their)) liquor control board or its designee.
(((5))) (8) The application fee for a marijuana processor license is two hundred fifty dollars. The applicant is also responsible for paying the fees required by the approved vendor for fingerprint evaluation.
(((6))) (9) The annual fee for issuance and renewal of a marijuana processor license is one thousand dollars. The board will conduct random criminal history checks at the time of renewal that will require the licensee to submit fingerprints for evaluation from the approved vendor. The licensee will be responsible for all fees required for the criminal history checks.
(((7))) (10) A marijuana processor producing a marijuana-infused solid or liquid product meant to be ingested orally in a processing facility as required in WAC 314-55-015(10) must pass a processing facility inspection. Ongoing annual processing facility compliance inspections may be required. The liquor control board will contract with the department of agriculture to conduct required processing facility inspections. All costs of inspections are borne by the licensee and the hourly rate for inspection is sixty dollars. A licensee must allow the liquor control board or its designee to conduct physical visits and inspect the processing facility, recipes, and required records per WAC 314-55-087 without advance notice. Failure to pay for the processing facility inspection or to follow the processing facility requirements outlined in this section and WAC 314-55-015 will be sufficient grounds for the board to suspend or revoke a marijuana license.
(11) The board will initially limit the opportunity to apply for a marijuana processor license to a thirty-day calendar window beginning with the effective date of this section. In order for a marijuana processor application license to be considered it must be received no later than thirty days after the effective date of the rules adopted by the board. The board may reopen the marijuana processor application window after the initial evaluation of the applications that are received and processed, and at subsequent times when the board deems necessary.
(((8))) (12) Any entity and/or principals within any entity are limited to no more than three marijuana processor licenses.
(((9))) (13) Marijuana processor licensees are allowed to have a maximum of six months of their average useable marijuana and six months average of their total production on their licensed premises at any time.
(((10))) (14) A marijuana processor must accept returns of products and sample jars from marijuana retailers for destruction, but is not required to provide refunds to the retailer.
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