Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Commerce & Gaming Committee

HB 1461

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:

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 and Cannabis Board (LCB) through its rulemaking authority, and (3) revised provisions in criminal statute to accommodate such legalization in accordance with the requirements of the initiative.

Since the passage of I-502, the production, processing, and sale of marijuana and marijuana-related products has become an industry that is rapidly approaching yearly sales of 1 billion dollars. In additional to the more traditional products whose ingestion requires smoking, a significant part of the industry is devoted to the production and processing of marijuana-infused edible products (candy, baked goods, drinks, oils, tinctures, medicines, etc.). Many producers and processors are producing a variety of marijuana products through methods that endeavor to comply with state and federal standards required for official designation as "organic" agricultural products. However, neither state nor federal law provides organic certification standards that are applicable to marijuana products, insofar as such certification cannot be provided to products that are illegal under federal law, which continues to be the case with marijuana products.

National Organic Program.

Administered by the United States Department of Agriculture (USDA), the National Organic Program ensures the integrity of products labeled as "organic" through the implementation of a regulatory framework that includes stringent standards applicable to crops, agricultural products, and food. Only those crops or products meeting the standards of the program may be labelled as organic. In order to sell, label, or represent a product as organic, agricultural producers and processors must follow the specifications set out by USDA organic production regulations.

Washington State Department of Agriculture Organic Program.

Washington State Department of Agriculture's (Department) Organic Program is accredited as an organic certification agent by the USDA. As a certification agent of the National Organic Program, the WSDA Organic Program's role is to inspect and certify organic operations, verifying that they are meeting all of the requirements of USDA organic standards.

Summary of Bill:

Washington State Department of Agriculture Marijuana Product Certification Program.

The act creates a voluntary marijuana production/processing standard and certification program within the Department applicable to producers and processors endeavoring to meet the organic product standards established by the USDA's National Organic Program. Although federal law has been interpreted as barring the use of the term "organic" in the marketing and labeling of marijuana products, the intent of the state program is to create production and processing standards applicable to the marketing of marijuana products that otherwise meet the federal standards. No marijuana or marijuana product may be marketed as meeting these standards unless covered by a Department-issued certification. And, even if the federal and state standards are met, the use of the "term" organic may not be used.

Rule Making Authority.

The program must be consistent with the Department's existing organic certification program and gives the Department rule-making authority to establish:

production and processing standards for marijuana that are consistent with the National Organic Program's standards;
a program to certify marijuana producers and processors that meet the standards;
a fee schedule that provides revenues sufficient to fully fund the program and make it self-sustaining; and
other rules as necessary.

Inspection and Enforcement.

The Department is granted inspection and enforcement authority with respect to those LCB licensees who opt to participate in the certification program. If a Department-certified LCB licensee is found to be in violation of the certification standards, the Department may suspend or revoke the certification and impose a fine. The fine may not exceed the total of estimated enforcement costs plus $1,000. In addition, the LCB may also take action against, and impose sanctions upon, a marijuana producer, marijuana processor, or marijuana retailer for ongoing violations of the Department's program regulations.

Public Disclosure.

Information about marijuana producers, marijuana processors, and marijuana retailers otherwise exempt from public inspection and copying under the Public Disclosure Act is also exempt from public inspection and copying if submitted to or used by the Department.

Use of Program Fees.

All fees collected under this chapter must be deposited in an account within the Agricultural Local Fund. The revenue from such fees must be used solely for carrying out the provisions of this chapter, and no appropriation is required for disbursement from the fund.