[Filed January 15, 2025, 10:45 a.m.]

Preproposal statement of inquiry was filed as WSR 24-06-026.

Title of Rule and Other Identifying Information: WAC 314-55-015 General information about cannabis licenses. The proposed rule language amends WAC 314-55-015 to allow persons under 21 years of age (minors) on the licensed premises of cannabis producers and processors provided certain conditions are met. The proposed rule language allows two groups of minors on the licensed premises: (1) Children and grandchildren of licensees who are under 16 years of age, and (2) employees of licensed or registered contractors who are between the ages of 18 and 20 years. This rule making is the result of rule-making petitions accepted by the Washington state liquor and cannabis board (LCB) in 2022. One of these petitions sought to make permanent an LCB temporary COVID[-19] allowance put in place to accommodate licensees during school and child care closures. Statute does not prohibit persons under 21 years of age on licensed premises of cannabis producers and processors, as it does under RCW 69.50.357 for licensed cannabis retailers.

Hearing Location(s): On February 26, 2025, at 10:00 a.m. All public LCB activity will be held in a "hybrid" environment. This means that the public will have options for in-person or virtual attendance. The boardroom headquarters building, 1025 Union Avenue, Olympia, WA 98504, will be open for in-person attendance and the public may also log in using a computer or a device, or call in using a phone, to listen to the meeting through the Microsoft Teams application. The public may provide verbal comments during the specified public comment and rules hearing segments. TVW also regularly airs these meetings. Please note that although the boardroom will be staffed during a meeting, board members and LCB participants may continue to appear virtually. For more information about board meetings, please visit https://lcb.wa.gov/Boardmeetings/Board_meetings.

Date of Intended Adoption: March 12, 2025.

Submit Written Comments to: Denise Laflamme, P.O. Box 48030, Olympia, WA 98504-3080, email rules@lcb.wa.gov, fax 360-704-5027, beginning January 15, 2025, 12:00 p.m., by February 26, 2025, 12:00 p.m.

Assistance for Persons with Disabilities: Contact Anita Bingham, ADA coordinator, human resources, phone 360-664-1739, fax 360-664-9689, TTY 711 or 1-800-833-6388, email anita.bingham@lcb.wa.gov, by February 19, 2025.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: This rule making is in response to two petitions LCB accepted in August 2022 requesting to amend WAC 314-55-015 to allow persons under 21 years of age on the licensed premises of cannabis producers and processors under certain conditions. One petition requested to make permanent a temporary COVID-19 allowance adopted by LCB that allowed children and grandchildren of licensees under 16 years of age on the licensed premises. A second petition requested to allow employees under 21 years of age working for contractors who are on the premises conducting trade-related work such as electrical, plumbing, and construction.

Under state statute, minors under 21 years of age are not explicitly prohibited from being on the premises of licensed cannabis producers and processors. RCW 69.50.357 prohibits persons under the age of 21 on licensed cannabis retailers only, except for qualifying patients. WAC 314-55-015 requires that applicants, licensees, and employees working in licensed cannabis establishments be at least 21 years of age, except as provided in RCW 69.50.357. As minors are not explicitly excluded from licensed premises of producers and processors in state statute, the petitions requested that WAC 314-55-015 be amended to allow two groups of persons under 21 years of age on the premises: Children and grandchildren of licensees who are under 16 years of age, and employees of contractors conducting trade-related work while on the premises.

Rule changes incorporate conditions that were included as part of the temporary COVID[-19] allowance, including that children and grandchildren of licensees be under 16 years of age and that they must not possess any products associated with the production, processing, or sales of cannabis.

For children and grandchildren of licensees, additional conditions include that they do not enter or remain in areas where cannabis is present, they are under direct supervision of the licensee while on the premises, and licensee must notify the enforcement and education division of LCB prior to child(ren) being present, including times when child(ren) may be present. Language requiring supervision of children and grandchildren by licensees is similar to language that exists in RCW 66.24.145 related to age restrictions for craft distilleries.

For employees of contractors, conditions include that the person is at least 18 years of age; they are employed by a licensed plumbing contractor under chapter 18.106 RCW, a licensed electrical contractor under chapter 19.28 RCW, or a contractor registered with the Washington state department of labor and industries (L&I) as required under chapters 18.27 RCW and 296-200A WAC; they are only on premises during the course of their official employment; they wear an identification badge as required under WAC 314-55-083; and they are accompanied by a supervisor at all times who is (1) employed by the same licensed or registered contractor, and (2) at least 21 years of age. Licensees must record in their visitor log whether a contractor employee is under 21 years of age and the name of the contractor business.

Reasons Supporting Proposal: The reasons supporting these proposed rules, in addition to that described above, are identified in the table below, describing the proposed changes to WAC 314-55-015.

Section	Current Rule Language	Proposed New Language	Rule Necessity
(2)	No one under 21 years of age may enter or remain on a cannabis licensed premises except as provided in RCW 69.50.357.	Persons, as defined in RCW 69.50.101, who are under 21 years of age must not:	Replacing "may" with "must not" to clarify. Replacing "no one" with existing definition of person for consistency.
		(a) Enter or remain on the licensed premises of a cannabis licensee except as provided in RCW 69.50.357 or as provided in subsections (3) and (4) of this section.	This is added to indicate that two new subsections with exceptions are being added.
	N/A	(b) Possess any products associated with the production, processing, or sales of cannabis.	Adds language consistent with temporary COVID[-19] allowance.
	N/A	(b) Violations of this subsection are subject to the same penalties established for allowing persons under 21 years of age to frequent a retail licensed premises under WAC 314-55-525.	This is added to indicate what penalties apply for violations.
(3)	New: Conditions and requirements for allowing children and grandchildren of licensees on licensed premises.	Persons under the age of 16 who are children and grandchildren of licensees may enter or remain on the licensed premises of a cannabis producer, as provided in this subsection.	This is the same language included in the temporary COVID[-19] allowance.
		(a) The person does not enter or remain in areas where cannabis is present including, but not limited to, those areas where cannabis is grown, dried, cured, trimmed, processed in any manner, stored, or being prepared for shipment.	This is added to define restricted areas for children.
		(a) Violations of this subsection are subject to the same penalties established for failure to maintain required surveillance system under WAC 314-55-522.	This is added to indicate what penalties apply for violations.
		(b) The person is under the direct supervision of the licensee while on the premises.	This language is consistent with language in RCW 66.24.145 for children allowed on craft distilleries.
		(c) Prior to allowing any child or grandchild of the licensee to enter or remain on the licensed premises, the licensee must notify the enforcement and education division of the LCB in writing that children may be on their licensed premises. Written notification to the enforcement and education division must indicate the day(s) of the week, times of the day, and age of the child(ren) that may be present.	This is added to describe new LCB notification requirements to indicate when children may be present.
		(c) Violations of this subsection are subject to the same penalties established for an operating/floor plan violation under WAC 314-55-523.	This is added to indicate what penalties apply for violations.
(4)	New: Conditions and requirements for employees of contractors working on licensed premises.	A licensed producer or processor may allow a person under 21 years of age to enter or remain on the licensed premises under the conditions outlined in this subsection.	This is added to indicate applicable age for this subsection.
		(a) The person under 21 years of age is:	This is added to indicate application of conditions to persons under 21.
		(i) At least 18 years of age.	Consistent with ages included in WAC 314-11-040 for employees under 21 years of age working on licensed liquor premises.
		(ii) Employed by a licensed plumbing contractor under chapter 18.106 RCW, or licensed electrical contractor under chapter 19.28 RCW, or a contractor registered with the Washington state department of labor and industries as required under chapters 18.27 RCW and 296-200A WAC.	These requirements were added to ensure employees worked for bona fide contractor businesses.
		(iii) On the licensed premises only during the course of their official employment providing contracted services to the licensee and does not remain on the premises any longer than is necessary to perform duties associated with their employment.	Consistent with WAC 314-11-040 for employees under 21 years of age working on licensed liquor premises.
		(iv) Accompanied by a supervisor at all times who is employed by the same licensed or registered contractor and who is at least 21 years of age.	This was added per supervision recommendations provided by L&I.
		(b) In addition to requirements under WAC 314-55-083, including wearing an identification badge while on the premises, licensees must record the following information about employees of contractors in the visitor log:	This is being added to clarify the requirement for visitor information.
		(i) If the employee is under 21 years of age; and	This is being added to aid LCB staff in identifying contractors on premises.
		(ii) The name of contractor business for whom employee is engaged in work while on the licensed premises.	This being added to aid LCB staff in identifying contractor businesses on premises.
(5) - (11)	WAC 314-55-015 (3) - (9) have been renumbered as WAC 314-55-015 (5) - (11)
(12)	N/A	Nothing in this section conflicts with RCW 9.41.300 as the entire premises remain classified as off-limits to persons under 21 years of age from the general public.	Clarifies that the entire premises remain off-limits to weapons pursuant to RCW 9.41.300.

Statutory Authority for Adoption: RCW 69.50.342 and 69.50.345.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: LCB, governmental.

Name of Agency Personnel Responsible for Drafting: Denise Laflamme, Rules Coordinator, 1025 Union Avenue, Olympia, WA 98504, 360-819-0452; Implementation: Rebecca Smith, Director of Licensing, 1025 Union Avenue, Olympia, WA 98504, 360-664-1753; and Enforcement: Paul Magerl, Interim Chief of Enforcement and Education, 1025 Union Avenue, Olympia, WA 98504, 360-664-1617.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328. The proposed amended rules do not qualify as a type of rule requiring a cost-benefit analysis under RCW 34.05.328(5). LCB is not a listed agency under RCW 34.05.328 (5)(a)(i), so the cost-benefit analysis requirements in RCW 34.05.328 are not applicable to the proposed rules unless voluntarily applied or made applicable by the joint administrative rules review committee under RCW 34.05.328 (5)(a)(ii).

Scope of exemption for rule proposal from Regulatory Fairness Act requirements:

The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. The proposed rule would impose a cost to small businesses if they became out of compliance under WAC 314-55-522, 314-55-523, or 314-55-525. Otherwise, no other costs to businesses are expected.

Using the North American Industry Classification System (NAICS) code 111419 for cannabis grown under cover, the United States (US) Census NAICS describes this code for "This U.S. industry comprises establishments primarily engaged in growing food crops (except mushrooms) under glass or protective cover." The US Census NAICS code description at https://www.census.gov/naics/?input=cannabis&year=2022&details=111419 identifies cannabis grown under cover as an example of a business that uses this code.

Using NAICS code 111918 for cannabis grown in an open field, the US Census NAICS describes this code for "This U.S. industry comprises establishments primarily engaged in one of the following: (1) growing crops (except oilseeds and/or grains; vegetables and/or melons; fruits and/or tree nuts; greenhouse, nursery, and/or floriculture products; tobacco; cotton; sugarcane; hay; sugar beets; or peanuts); (2) growing a combination of crops (except a combination of oilseed(s) and grain(s); and a combination of fruit(s) and tree nut(s)) with no one crop or family of crops accounting for one-half of the establishment's agricultural production (i.e., value of crops for market); or (3) gathering tea or maple sap." The US Census NAICS code description at https://www.census.gov/naics/?input=cannabis&year=2022&details=111998 identifies cannabis grown in an open field as an example of a business that uses this code.

Using NAICS code 424590 for cannabis merchant wholesalers, the US Census NAICS describes this code for "This industry comprises establishments primarily engaged in the merchant wholesale distribution of farm products (except grain and field beans, livestock, raw milk, live poultry, and fresh fruits and vegetables)." The US Census NAICS code description at https://www.census.gov/naics/?input=cannabis&year=2022&details=424590 identifies cannabis merchant wholesalers, as an example of a business that uses this code.

LCB estimates there would be no cost associated with implementing this rule except if a business is found to be out of compliance. Under RCW 34.05.110 (4)(a), an agency is not required to waive a fine or penalty to correct a violation if the violation presents a direct danger to the public health. Because violations under WAC 314-55-522 pertain to potential threats to public health, we applied an estimated compliance cost of $1250 for a first violation when analyzing whether the rules would have a disproportionate impact on small businesses as defined in RCW 19.85.020(3).

The data below are provided by reference to the minor cost threshold calculator provided by the office of regulatory innovation and assistance available at https://www.oria.wa.gov/Portals/_oria/VersionedDocuments/RFA/Regulatory_Fairness_Act/Minor-Cost-Threshold-Calculator.xlsx.

2022 Industry NAICS Code	Estimated Cost of Compliance	Industry Description	NAICS Code Title	Minor Cost Estimate	1% of Average Annual Payroll (Threshold)	0.3% of Average Annual Gross Business Income (Threshold)
111419	$1250.00	Cannabis, grown under cover	Other Food Crops Grown Under Cover	$3,259.51	$3,259.51 2021 Dataset pulled from ESD	$3,195.50 2021 Dataset pulled from DOR
111998	$1250.00	Cannabis, grown in an open field	All Other Miscellaneous Crop Farming	$11,775.64	$11,775.64 2021 Dataset pulled from ESD	$2,882.31 2021 Dataset pulled from DOR
424590	$1250.00	Cannabis merchant wholesalers	Other Farm Product Raw Material Merchant Wholesalers	$8,809.55	$3,948.77 2021 Dataset pulled from ESD	$8,809.55 2021 Dataset pulled from DOR

As the table demonstrates, the estimated cost of compliance does not exceed the minor cost thresholds for any of the potential NAICS codes applicable to cannabis licensees. Therefore, implementation of this amended rule is not anticipated to result in more-than-minor costs on businesses as defined in RCW 19.85.020(2).

DOR - Washington state department of revenue.

ESD - Employment security department Washington state.

DOR data available at https://apps.dor.wa.gov/ResearchStats/Content/GrossBusinessIncome/Results.aspx?Year=2023Q4,2023Q3,2023Q2,2023Q1,&Code1=450000&Code2=460000&Sumby=n6&SicNaics=2&Format=HTML.

A copy of the detailed cost calculations may be obtained by contacting Denise Laflamme, Policy and Rules Coordinator, P.O. Box 43080, Olympia, WA 98504-3080, phone 360-819-0452, fax 360-704-5027, TTY 711 or 1-800-833-6388, email rules@lcb.wa.gov.

AMENDATORY SECTION(Amending WSR 22-21-058, filed 10/12/22, effective 11/12/22)

WAC 314-55-015General information about cannabis licenses.

(1) To be issued and maintain a license to produce, process, or sell cannabis at retail, a person or entity applying for a cannabis license must meet all of the qualifications described in this chapter.

(2) All applicants, licensees, and employees working in each licensed establishment must be at least 21 years of age. ((No one))Persons, as defined in RCW 69.50.101, who are under 21 years of age ((may))must not:

(a) Enter or remain on ((a cannabis))the licensed premises of a cannabis licensee except as provided in RCW 69.50.357 or as provided in subsections (3) and (4) of this section.

(b) Possess any products associated with the production, processing, or sales of cannabis. Violations of this subsection are subject to the same penalties established for allowing persons under 21 years of age to frequent a retail licensed premises under WAC 314-55-525.

(3) Persons under the age of 16 who are children and grandchildren of licensees may enter or remain on the licensed premises of a cannabis producer, as provided in this subsection.

(a) The person does not enter or remain in areas where cannabis is present including, but not limited to, those areas where cannabis is grown, dried, cured, trimmed, processed in any manner, stored, or being prepared for shipment. Violations of this subsection are subject to the same penalties established for failure to maintain required surveillance system under WAC 314-55-522.

(b) The person is under the direct supervision of the licensee while on the premises.

(c) Prior to allowing any child or grandchild of the licensee to enter or remain on the licensed premises, the licensee must notify the enforcement and education division of the LCB in writing that children may be on their licensed premises. Written notification to the enforcement and education division must indicate the day(s) of the week, times of the day, and age of the child(ren) that may be present. Violations of this subsection are subject to the same penalties established for an operating/floor plan violation under WAC 314-55-523.

(4) A licensed producer or processor may allow a person under 21 years of age to enter or remain on the licensed premises under the conditions outlined in this subsection.

(a) The person under 21 years of age is:

(i) At least 18 years of age.

(ii) Employed by a licensed plumbing contractor under chapter 18.106 RCW, or licensed electrical contractor under chapter 19.28 RCW, or a contractor registered with the Washington state department of labor and industries as required under chapters 18.27 RCW and 296-200A WAC.

(iii) On the licensed premises only during the course of their official employment providing contracted services to the licensee and does not remain on the premises any longer than is necessary to perform duties associated with their employment.

(iv) Accompanied by a supervisor at all times who is employed by the same licensed or registered contractor and who is at least 21 years of age.

(b) In addition to requirements under WAC 314-55-083, including wearing an identification badge while on the premises, licensees must record the following information about employees of contractors in the visitor log:

(i) If the employee is under 21 years of age; and

(ii) The name of contractor business for whom employee is engaged in work while on the licensed premises.

(((3)))(5) Mandatory signs must be conspicuously posted at all cannabis licensed premises consistent with the requirements in WAC 314-55-086.

(((4)))(6) The privileges of a board issued cannabis license may be used only after the board issues official written approval.

(((5)))(7) The board will not approve an application for a cannabis license under any of the following circumstances:

(a) The proposed cannabis location would limit law enforcement access without notice or cause, including a personal residence;

(b) The proposed cannabis business would be located on federal lands;

(c) The proposed cannabis business would be located within the exterior boundaries of the reservation of a federally recognized tribe without the express written consent of the tribe consistent with WAC 314-55-020(4).

(d) The application for a cannabis retail license is located within another business unless that other business is a research license as described in WAC 314-55-073. More than one license may be located in the same building if each licensee has their own area separated by full walls with their own entrance, or if the same business entity holds a producer license and a processor license at the same location under a single license number. Product may not be commingled.

(((6)))(8) The board may impose special conditions to an approval for a cannabis license. Special conditions include, but are not limited to, involvement of any former licensee in the operations of the licensed business, their former employees, or any person not qualifying for a cannabis license.

(((7)))(9) All cannabis licensees must conspicuously post and keep posted its license, or licenses, and any additional correspondence issued by the board describing special conditions.

(((8)))(10) A cannabis licensee must use sanitary practices in the production, processing, storage, and sale of all cannabis products.

(((9)))(11) Cannabis licensees may not allow the consumption of cannabis or cannabis-infused products on or within the licensed premises.

(12) Nothing in this section conflicts with RCW 9.41.300 as the entire premises remain classified as off-limits to persons under 21 years of age from the general public.