Washington State Liquor and Cannabis Board WSLCB June 2016 Overview Highlights Agency objective for implementing I502 Sales activity Issues and challenges Looking Ahead aligning medical MJ with recreational system ID: 731533
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Slide1
Marijuana LegalizationState of the Marijuana System
Washington State Liquor and Cannabis Board (WSLCB)
June 2016Slide2
Overview
Highlights
Agency objective for implementing I-502
Sales activityIssues and challengesLooking Ahead: aligning medical MJ with recreational systemTribal compactsStaying connected
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Public Safety
Create a tightly controlled and regulated marijuana market
Agency Role and Responsibilities:
Created a 3-tier regulatory system for marijuanaCreated licenses for producer, processor and retailer
Enforcing laws and rules pertaining to licensees
Collecting and distributing taxes/fees
Agency Objective
3Slide4
In addition to
Washington’s
laws and
rules, the Department of Justice issued eight enforcement guidelines for marijuana businesses. These guidelines are separate from Washington’s and are enforced at the discretion of the US Department of Justice.
Eight Guidelines
Preventing distribution to minors.
Preventing
the revenue from going to criminal enterprises, gangs and
cartels.
Preventing the diversion of marijuana from states where it is legal to other states.Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity.Preventing violence and the use of firearms in the cultivation and distribution of marijuana. Preventing drugged driving and other adverse public health consequences associated with marijuana use.Preventing the growing of marijuana on public lands and the environmental dangers posed by marijuana production on public lands. Preventing marijuana possession or use on federal property.
Federal Enforcement Guidelines
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Licensing Requirements
Criminal history investigation
All parties, including spouses
FBI background checksFinancial background investigationIdentifies source of
funds
Six-month
residency requirement
Entity must be formed in Washington StateDemonstrate at time of application
Property
must be more than 1,000’ from: schools, child care centers, transit centers, game arcades, libraries, playgrounds, public parks. Traceability System A robust and comprehensive software system that traces product from start to sale. Licensees must report significant milestones and changes to the LCB’s traceability system which allows the LCB to monitor and track any plant or product at any time. Licensing Requirements5Slide6
Licenses
Issued as of May
31,
2016…Producer/Processor – 972 total licenses724
Producer/Processor141 Producer only
107
Processor onlyRetail – 365 licenses
297 medical endorsements issued (81 percent)6Slide7
Licensed Locations
7Slide8
Sales/Tax Activity
Sales Activity
Total Sales to Date (since July 8, 2014) $
1.07 (billion)Total Sales FY 2015: $259.7 millionTotal Sales FY 2016: $815.0 millionAverage Daily Sales$3.1 million average daily salesExcise Tax Revenue*Total Tax to Date (since July 8, 2014): $
229.6 million - Total Excise Tax FY 2015: $64.9 million
- Total Excise Tax FY 2016: $155.8 million
*In addition, DOR collects Retail Sales and Business and Occupation taxes
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Revenue Projections
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Initial
excise tax forecast projections (2013)
FY 2015 $36.3 million
FY
2016 $80.0 million
FY 2017 $119.8 million
FY 2018 $160.2 million
FY 2019 $193.5 millionCurrent excise tax forecast projections* (Feb. 2016)n/aFY 2016 $164.0 millionFY 2017 $268.7 millionFY 2018 $329.5 millionFY 2019 $361.8 millionSlide10
Funding Disbursements
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Estimated Net to Distribute
$155,882,285
$260,209,170
Agency
For
I-502*
FY 16
FY 17
Dept.
of Social and Health Svcs.
Prevention and reduction of substance abuse
15 percent
$
12,814,000
(8.2 percent)
$27,786,000
(10.7 percent)
Dept. of Health
Marijuana education and public health program
10 percent
$
7,500,000
(4.8 percent)
$7,500,000
(2.9 percent)
University of Washington
Research on short- and long-term effects
.6 percent
$
207,000
(.13 percent) $207,000(.08 percent)Washington State UniversityResearch on short- and long-term effects.4 percent$138,000(.09 percent) $138,000(.05 percent) Basic Health Trust Fund Account50 percent$77,941,000(50 percent) $130,105,000(50 percent)WA Health Care AuthorityContracts with community health centers5 percent$5,351,000(3.4 percent) $12,520,000(4.8 percent)Supt. of Public InstructionDrop-out prevention.3 percent$251,000(.16 percent) $511,000(.2 percent)General Fund 18.7 percent$51,680,285(33 percent) $81,442,170(31 percent)
*Modified by Legislature in 2015, 2E2SSB 2136Slide11
Examples of Funded Activities
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DSHS – Substance abuse prevention and treatment
Increase in youth treatment services
Increased support for and expansion of community- and school-based servicesGrants for community-based services for prevention
Training in Life Skills and other prevention and treatment programs
Tribal Prevention and Treatment grants
DOHMedia-based educational campaigns
Parents and other adult influencers
YouthMarijuana and Tobacco community grantsGeneral populationPriority populations (African American, Latino/Hispanic, Asian/Pacific Islander, American Indian/Alaska Native, and LGBQT)Marijuana HotlineTobacco cessation servicesSlide12
Average Daily Sales Growth
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Average Price per Gram
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Sales by Product Type (%)Slide15
Current Challenges
Federal Guidelines
Doesn’t
change federal lawFocuses on eight points of emphasis including youth access and public safetyBanking
Dept. of the Treasury allows banks to do business with marijuana licenseesApproximately 25 percent of tax paid in cash
Budget proviso – 2016 Legislature
Advertising
Balancing free speech with restrictions in the law
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Current Challenges
Bans and Moratoria
Court ruled
that because I-502 was silent on bans/moratoria that cites/counties can ban marijuana businesses 59 bans statewide17 moratoria statewide
Marijuana Infused Products/Public SafetyBoard
took steps
in June 2014 to add additional safeguards to its already comprehensive
rules: Emergency Rule: product may not be “especially” appealing to childrenProducts must be approved by the Board
Products must carry an identifier that they contain marijuana
Require homogenization to ensure uniform distribution of THC 16Slide17
Looking Ahead: Aligning Medical w/ the Recreational System
Additional Outlets
BOTEC MJ Marketplace: 37% medical, 35% state licensed, 28% illicit
Based on BOTEC’s comprehensive study of the overall market, the LCB will expand from 334 allotted retail stores to 556 retail stores.We received over 2,300 retail license applications for 222 slots All 222 new stores will be filled by Priority 1 applicantsTimeline
Sept. 23, 2015 LCB issued emergency and draft rules Oct. 12, 2015 DOR / LCB begin accepting retail applicationsNov. 3-16, 2015 Six public hearings statewide
Jan. 6, 2016 Board adopts new cap on retail stores
March 31, 2016 Deadline for retail applicationsJuly 1, 2016 Deadline for unlicensed
dispensaries17Slide18
Tribal Compacts
18
September 14, 2015
Suquamish Tribe and Washington State agree to nation’s first tribal-state compact.
September 23, 2015
Squaxin Tribe and Washington State agree to nation’s second tribal-state compact.
January 6, 2015
Puyallup Tribe and Washington State agree to nation’s third tribal-state compact.
Tribes currently entering into negotiations with WSLCB
Several tribes are currently pursuing or considering compacts. Slide19
Future Communications
Comprehensive Marijuana website
Information regarding July 1, 2016 changes
Links to all relevant agency data/infoWebinars on relevant topicsQuarterly for licenseesExpanded access to dataImproved graphic display of data 19Slide20
Staying Connected
Visit the Marijuana
2016
webpage -- lcb.wa.gov Interactive dashboard (maps, relevant data, updated weekly)Factsheets
FAQs Timelines
Listserv with approximately
13,500 subscribers
Public hearings on rules are posted on website and publicized on the listservMedia attention -- AP Top 5 story of 2012, 2013, 2014
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Thank you
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