Medical Marijuana: No Love Lost Between Washington’s Competing MMJ Bills

It’s no secret that Washington State has been struggling lately in trying to harmonize its two marijuana industries, medical and recreational. Washington right now has a vast number of medical marijuana dispensaries that compete against a much smaller number of licensed retail storefronts that, though heavily taxed, are allowed to sell to anyone over 21. Medical marijuana “as is” is undermining Washington’s experimentation with recreational marijuana because medical businesses have virtually no state oversight, pay almost nothing in taxes, and face virtually no barriers to entry. In addition, where Washington’s medical marijuana law allows patients with “intractable pain” to access medical cannabis, there’s no doubt that a good number of illegitimate “patients” are taking advantage of the lower priced cannabis at medical marijuana access points instead of retail storefronts.

black and white picture of marijuana plants

Most recently in the state’s capital of Olympia, two bills have emerged to “fix” Washington’s dueling marijuana systems. Whichever bill prevails (and even if neither goes anywhere), one thing is certain, regulation will be coming to Washington’s medical marijuana scene.

Even though both bills will lead to state regulation and oversight for medical marijuana, they do so through very different mechanisms. State Senator Ann Rivers is the author of Senate Bill 5052, which mandates that the state retain a separate medical marijuana system, distinct from I-502. The highlights of that bill are as follows:

  • Medical marijuana dispensaries can sell only edibles, concentrates, oils, and marijuana-infused products to qualifying patients. They will be prohibited from distributing or selling any raw marijuana flower to patients.
  • State licensing of medical marijuana facilities would be required.
  • Quality assurance testing of all products would be mandatory.
  • Medical marijuana products would be sales tax free.
  • The state would create a registry for medical marijuana patients and providers.
  • Restrictions will be imposed on licensed health care providers who authorize the medical use of marijuana.
  • The Department of Health will determine appropriate levels of THC permissible for products sold in medical outlets.
  • Collective gardens as we now know them would be significantly scaled down. These gardens would be limited to four people, one garden per tax parcel. The gardens would have to register their location with the state, and they would not be allowed to be within 25 miles of a medical marijuana store.
  • Patients or their providers could grow up to six plants at home.

Senator Rivers’ proposed bill states that “growers licensed to produce pot for the recreational market would be allowed to expand their operation to add plants for medical use, and if more medical marijuana production is needed, priority in licensing would be given to applicants who haven’t yet been approved for recreational grows.”

In contrast to Senator Rivers’ bill, State Senator Jeanne Kohl-Welles’ medical marijuana bill contemplates rolling medical marijuana into the existing I-502 regulatory regime. In doing so, it will eliminate collective gardens and medical marijuana access points and it also would make some fixes to I-502’s current structure. Some highlights of Senate Bill 6178 are as follows:

  • Collective gardens would be phased out by August 1, 2016, but medical growers who have business licenses and are paying taxes could apply to grow in the new “single” system.
  • The state’s current limit on the number of recreational stores would be removed so that existing medical marijuana access point managers could apply to own a store.
  • I-502’s excise taxes will be consolidated into one tax paid at the retail point of sale. This is in addition to changing the nature of these taxes so that they become deductible at the Federal level — they currently are not.
  • Patient-focused, high-CBD products would be given a tax break. In special cases, such as those patients seeking high-THC pot for specific medical problems or parents who want access for their kids, patients could get medical exemptions from the Department of Health.
  • Deliveries would be allowed under I-502.
  • The “1,000-foot buffer rule” that disallows marijuana businesses within that distance from schools, parks, and other places kids congregate would be reduced to a more manageable 500-foot buffer.
  • Local governments will be encouraged to allow marijuana businesses by the state sharing marijuana revenues only with those jurisdictions that participate in the industry.

Both of these bills would lead to significant changes to a well-entrenched medical marijuana industry and, for that reason alone, there will be pushback. Whether either or neither of these bills passes, we are certain that by this time next year, Washington will have a brand new, regulated medical marijuana industry.

Stay tuned.