Initiative 502’s impact on the Washington State Liquor Control Board

Summary
Initiative 502 would license and regulate marijuana production, distribution, and possession for persons over 21; remove state-law criminal and civil penalties for activities that it authorizes. Tax marijuana sales and earmark marijuana-related revenues. The new tightly regulated and licensed system would be similar to those used to control alcohol.

Licenses and Fees
* Creates an application process that mirrors the liquor license application process.
* Creates three new marijuana licenses: producer, processor, and retailer. The fee for each license is a $250 application fee and $1000 annual renewal fee.

- Marijuana Producer: produces marijuana for sale at wholesale to marijuana processors and allows for production, possession, delivery, distribution.

- Marijuana Processor: processes, packages, and labels marijuana/marijuana infused product for sale at wholesale to marijuana retailers and allows for processing, packaging, possession, delivery, distribution.

- Marijuana Retailer: allows for sale of useable marijuana/marijuana infused products at retail outlets regulated by the WSLCB.

The initiative allows the WSLCB to charge fees for anything done to implement/enforce the act. For example, fees could be charged on sampling, testing, and labeling that would be the cost of doing business as a licensee.

Marijuana Taxes

The initiative creates three new excise taxes to be collected by the WSLCB:

1) Excise tax equal to 25% of the selling price on each sale between licensed producer and licensed processor. Paid by the producer.

2) Excise tax equal to 25% of the selling price on each sale of usable marijuana/marijuana infused product from a licensed processor to a licensed retailer. Paid by the processor.

3) Excise tax equal to 25% of the selling price on each licensed retail sale of usable marijuana/marijuana infused product. Paid by the retailer. This tax is in addition to any/all applicable general, state, and local sales and use taxes, and is part of the total retail price.

All funds from marijuana excise taxes are deposited in the Dedicated Marijuana Fund. Disbursements from the Dedicated Marijuana Fund shall be on authorization of the WSLCB or a duly authorized representative.

Initiative 502 allows for the WSLCB to enact rules that establish procedures and criteria for:
* The equipment, management and inspection of production, processing, and retail outlets.
* Books and records maintained by licensed premises.
* Methods of producing, processing and packaging of marijuana/marijuana infused products, to include conditions of sanitation, standards of ingredients, quality, and identity of marijuana/marijuana infused products produced, processed and sold by licensees.
* Security requirements for retail outlets and premises where marijuana is produced and processed.

Retail Outlets
* Specific number of retail outlets and licenses will be determined by the WSLCB in consultation with the Office of Financial Management taking into account population, security and safety issues, and discouraging illegal markets. The initiative also caps retail licenses by county.
* Retail outlets may not employ anyone under the age of 21, nor allow anyone under the age of 21 to enter the premises.
* Retail outlets are only authorized to sell marijuana/marijuana products or paraphernalia.
* Retailers are allowed one sign identifying the outlet’s business or trade name, not to exceed 1600 square inches.
* Retailers are not allowed to display marijuana or marijuana related products in a manner that is visible to the general public.

Possession
If enacted, individuals twenty-one years of age or older are legally authorized to possess and use:
* One ounce of useable marijuana.
* 16 ounces of marijuana infused product in solid form; or
* 72 ounces of marijuana infused product in liquid form.

Marijuana-related drug paraphernalia.
Individuals will still be subject to criminal prosecution for:
* Possession in amounts greater than what is listed above.
* Possession of any quantity or kind of marijuana/marijuana infused product by a person under 21 years of age.

Price
The Office of Financial Management places a price estimate of $12 per gram. Medicinal marijuana dispensary prices on average range between $10 and $15 per gram with some premium products exceeding $15 per gram. Based on average retail mark-up practices, estimated producer price is $3 per gram and estimated processor price is $6 per gram.

Timeline
* November 6, 2012: Public vote on Initiative 502.
* December 6, 2012: Initiative 502 goes into effect (30 days after general election).
* December 1, 2013: Deadline for the WSLCB to establish the procedures and criteria necessary to implement the initiative

http://www.liq.wa.gov/publications/Marijuana/I-502/Fact-Sheet-I502-11-7-...