Whither medical cannabis in Washington state?

As the Liquor Control Board works to finalize its rules for implementing Initiative 502, it turns to a key piece of unfinished business: making recommendations to the state legislature regarding the much less regulated medical cannabis industry.  To do this, they have enlisted the help of the Departments of Health and Revenue, forming a joint committee that has been meeting since July.

From the WSLCB listser announcement:”Section 141 of the state operating budget directs the Liquor Control Board to work with the departments of Revenue and Health to develop recommendations to the Legislature regarding the interaction of medical marijuana and the emerging recreational marijuana system. The workgroup, which includes senior staff from each agency, has been meeting since July.”

The timetable:

Note that the process is a speeded-up version of what they did for 502 draft rulemaking; and that while the Department of Health makes sense, the Department of Revenue is trickier business and undoubtedly related to the differential taxation structure from 502, which adds an excise tax of 25% at each stage of the process: producer to processor, processor to retailer, and retailer to consumer.

The announcement of this process and its timeline has caught many of us by surprise — it arrived to my inbox while I was at a group meeting to hammer out a legislative proposal for regulating medical cannabis producers, processors, and retailers after 502 kicks in, presumably in January.

It should be interesting to see what the joint committee comes up with.  I can’t report on what our grassroots committee is deliberating, but I would like to offer my thoughts on what can work, politically and economically.

First, it’s my understanding that the joint committee will settle on a timeline for phasing out the medical cannabis supply chain as it exists.  I’ve been quoted anywhere from 6 months to 2 years, during which medical producers, processors, and distributors may continue to operate under existing medical cannabis (largely self-) regulation.  Now, whether such operators will be subject to US Attorney prosecution is another question: I suggest that at the very least some low-hanging fruit will be plucked, but most likely it will be gray market participants that shade towards black.  In any case, the legal field will get very messy, but remember that a messy legal field favors defendants.

Second, it is very hard for me to imagine that new medical cannabis frameworks will include producers and processors.  Simply put: 502 licenses for producers and processors will be much more easily obtained than retail licenses, and their product(s) are exactly the same as medical products — in fact much more regulated.  I don’t see any scenario in which the legislature carves out exceptions to 502 producing and processing rules.

The extent to which the legislature may be amenable to continue medical cannabis in some form hinges on the question of patient access, which is an end-use question rather than a producing and processing question.  This is more complicated than it seems, since retail stores (a) won’t be very convenient to access for most and (b) aren’t allowed to have any mention of “medical” use associated with packaging and labeling, per I-502 language.

That leaves the possibility that the state may carve out a retail exception to 502, with a much more tightly regulated system for authorizing and patient database registration — probably a different list of conditions, as well, on which I presume the Department of Health will be weighing in.  One exception that will have to be made is the age-limit for purchasing medical cannabis.  Post-Sanjay Gupta, I can’t imagine that medical cannabis for children won’t be permitted.

To be clear, this is my analysis of what will be possible to secure for medical cannabis patients and industry in the coming year.  A broader range of existing allowances, in my opinion, should be allowed but are unlikely to attract political support in the legislature (whose primary interest is producing revenue, not protecting patients).  These include: collective gardens, home grow provisions, and more than an ounce to purchase at a time.

I’ll update you on the progress of this process, but leave you with this thought:  every state that already has medical cannabis regulations is going to have to go through this process after passing legalization initiatives or legislation.  It’s a very messy process — states are already divergent with respect to qualifiying conditions and authorizers.  It’s also another reminder that legalization is only the beginning of a process, and that continuous organizing must happen to shape outcomes.  Beyond that, though, is the question of moving beyond highly regulated legalization to total Federal de-scheduling.  I believe that the current steps that are being taken are familiarizing the rest of the US with cannabis and to their surprise, cannabis is not the bogeyman they’ve been led to believe.  There is absolutely no non-political need, in my opinion, for cannabis regulation to be as strict as it is.