Cannabis Business Blog

Ada Danelo is a Summer Associate at GSB's Seattle office. 

The University of Washington School of Law’s Cannabis Law and Policy Project hosted its first annual conference on Washington state marijuana policy on June 14, 2016.

Rick Garza, Director of the Washington State Liquor and Cannabis Board (LCB), and Seattle City Attorney Pete Holmes kicked off the Conference by discussing the following current policies and industry trends:

• • Use of pesticides on cannabis products. Garza described the regulatory issues that the LCB faces, and noted that one of the LCB’s new challenges is to ensure that cannabis products are safe and properly tested for pesticides. To address this, the LCB plans to work with the EPA and the Department of Agriculture.

• • Increasing market limits. By the LCB’s estimate, the market is sufficiently served by the 48 cannabis stores currently in Seattle, but Garza noted that the LCB plans to increase the market ban if they see demand. Holmes, on the other hand, commented that of the 48 stores allocated, only 31 are open, and that “we need substantially more,” adding that legal delivery services may be another way to meet that demand. The City Attorney also wants to ensure that applicants who are “sitting on” a license either use or lose it, which Holmes wants to work with the LCB to enforce.

• • Increase in tourism benefits hospitality and tourism industry. Holmes noted the significant increase in tourism to Seattle since legalization and how much it benefits hotels, restaurants, and the tourism industry generally. According to the City Attorney, the increase in tourism has created a need for marijuana lounges, since state law prohibits public consumption of cannabis.

The afternoon sessions featured cannabis producers, processors and retailers explaining the intricacies of their compliance with both state and federal law. Ian Eisenberg, owner of Uncle Ike’s Pot Shop, made a pitch for legalization, which he and the other retailers on the panel agreed limits underage access to cannabis – since legal stores turn away customers under 21.

Attorneys from various law firms also spoke about issues ranging from pesticide regulation and tax compliance to diversity in the marijuana industry. Andy Aley, Owner at GSB and Co-Chair of its Cannabis Industry Group, discussed the impediments to sales and marketing for marijuana producers and processors, noting that “it takes about six weeks to get a bud tender to even sample product,” and that “we need smart policy changes that allow the industry to mature and become more akin to the craft beer industry.”

On Wednesday, June 8^th, Governor John Kasich signed Ohio House Bill 523 to authorize the medical use of marijuana in Ohio, which will take effect in 90 days. While initially remaining quiet regarding his position on the issue, Kasich had earlier stated that he would follow the recommendations of physicians, but that he wanted to provide relief to children in pain.

Although medical marijuana will be legal in Ohio in September, it will take much longer to establish its rules for patients, growers and dispensaries (likely eight months). In the meantime, however, medical marijuana may be legally purchased in other states where it is legal and brought back into Ohio. Once the rules are established, out of state medical marijuana will no longer be legally transported into Ohio.

One distinguishing aspect of the new law is that it is still illegal to smoke medical marijuana in Ohio – vaporizers, edibles and oils are the only legal forms of its use. It should also be noted that recreational use of marijuana remains illegal and that employers will be allowed to fire employees who violate company policies against marijuana use, even if used for medical purposes.

Under the law, physicians who are certified by the Medical Board of Ohio may recommend medical marijuana to those suffering a number of medical conditions after attending at least two hours of training on diagnosing and treating conditions with medical marijuana.

Growers interested in growing medical marijuana will have to file an application with the Ohio Department of Commerce. Growers will not be allowed within 500 feet of schools, public playgrounds, churches, public parks or public libraries, and applicants with criminal convictions will be disqualified.

With reports of significant non-approved pesticide use by some in the industry, the LCB has increased its focus upon pesticides.

In addition to emergency regulations addressing product recalls and pesticide action levels, the LCB (via the Washington State Department of Agriculture) recently amended the list of approved pesticides.  Specifically, the WSDA added 29 pesticides to the list of allowable products and removed 27 products.

Bottom line:  Make sure that your house is in order.  Confirm that your current stock of pesticides only includes those on the WSDA’s approved list.  Note that you may “use up” any existing inventory of the 27 pesticides removed from the list, but cannot purchase additional amounts of these products.  Also, we are seeing increasing volumes of pesticide-related disputes and lawsuits, and will address how to best protect your business from pesticide litigation in a future post.