Monday, June 17, 2013

Liquor Control Board's advice for potential marijuana licensees

Last week the Liquor Control Board released the following advice:

This notice is to give you a courtesy heads up on some things you should be considering, preparing or actively doing now if you are interested in applying for a producer, processer or retail license.

First off, the Washington State Liquor Control Board (WSLCB) will not be accepting license applications until mid-September. Under the current draft rules, the WSLCB will open a 30-day application window for all license types. However, there are steps you can take now to lay the groundwork so that you are ready by September.

The below Top 10 list includes suggestions for things that you can do now to prepare. Applying for state licenses may be the easy part. Potential applicants must also be in compliance with other state and local laws and regulations.  

10 (Know the Law and Rules)
The best place to start is reading the summary materials available to you on the I-502 section of our website. In addition to the full text of the initiative, there are summaries of the law and rules as well as answers to frequently asked questions.

The WSLCB issued initial draft rules on May 16, 2013. The WSLCB is scheduled to file official draft rules July 3, 2013. These rules will include the input we have received since May 16.

9 (Consider consulting an Attorney)  
Have you consulted with an attorney or other business consultant on the potential risks and rewards? Marijuana remains illegal under federal law. Know your risks in advance. A state license is not insurance against federal prosecution. Governor Inslee and state Attorney General Ferguson have reached out to the Department of Justice (DOJ) to seek clarification regarding the federal government’s policy going forward for Washington and Colorado. As of this writing, the DOJ has said that it will provide clarification soon.

8 (Tightly Regulated System)
The Board has been clear from the beginning that its goal is to create a tightly controlled and regulated system to prevent diversion. There are strict regulations and subsequent associated costs. Do you have the necessary capital or financing to meet the start-up and operating costs? Under the current banking and money laundering laws, financial institutions will not lend money to marijuana-related businesses.

7 (Criminal History)
Do you and any potential partners qualify? Under the initial draft rules, the board has made allowances for two misdemeanor convictions for marijuana possession. However, an extensive or violent criminal history will likely prevent you from getting a license.

6 (State Residency)
Have you, your partners and your financiers resided in Washington State for three months? That is a requirement in both the law and the rules. The initial draft rules spell out the residency requirements and the necessary proof for application. You would need to have started living in Washington State by mid-June if you want to apply when the application process begins in mid-September.

5 (Communicate with Your Local Government)
Have you talked with your local government (county, city or port) about your plans? Are there business license requirements or zoning restrictions? Local jurisdiction requirements vary.

4 (Special Use Regulations)
Are there environmental or special use permits required? Growing marijuana is agriculture which typically has specific requirements for production, wastewater, etc. It is the same thing with processing. Depending on your process methods there may be associated state or local regulations that govern them.

3 (Location, Location, Location)
You need a location in order to apply for your license. Initiative 502 specifically prohibits locations of any license type within 1,000 feet of the perimeter of an elementary or secondary school, playground, recreation center or facility, child care center, public park, public transit center, library, or arcade that is not restricted to persons at least age 21. These restrictions can make it difficult to find an appropriate place to locate your business.

2 (No Surprises)
Under the initial draft rules, the landlord or property owner must sign an attestation that he/she is aware that the property being leased will be used for production, processing, or retailing marijuana. Have you communicated with a potential landlord about whether they are willing to sign an attestation?

1 (Learn about the Application Process)
A marijuana producer, processor or retail license will be an endorsement on your Business License which is administered by the Washington State Department of Revenue. A $250 application fee per marijuana license type must be included with the application. There may be other licensing fees that are due depending on your residence, along with the Business Licensing Services (BLS) handling fee.

Due to the special circumstances of the 30 day application window for marijuana licenses and to ensure that applications submitted on time are accounted for, the application for the marijuana licenses will not be available to be processed online.  It will be paper-based only. However, you will be able to initiate the application at any Washington State Department of Revenue office.

After you submit your marijuana license application, the WSLCB will take you through the licensing process and ultimately decide whether to approve or deny your application.

This is the latest in our ongoing effort to help keep you informed of the WSLCB’s efforts. We hope this helps in your planning to be part of Washington’s emerging and historic recreational marijuana market. Thanks.

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