As a result of that is the start of the yr, and since I’ve had many purchasers ask me concerning the standing of Washington’s hashish market recently, I needed to weigh in on my predictions for Washington hashish developments in 2021.

WSLCB Guidelines

Regardless that we’d take into account Washington’s marijuana market fairly mature when in comparison with many different states, the Washington State Liquor and Hashish Board (WSLCB) stays vigilant (and in some instances, militant!) and continues to hunt enter from stakeholders because it refines its insurance policies and procedures. In early January, the WSLCB adopted a slew of guidelines that can impression licensees in 2021:

     a.     Emergency Guidelines (WAC 314-55-1055) – Marijuana Product Disclosure Kind (Efficient January 6, 2021)

This rule requires all producers of THC merchandise to reveal all compounds utilized in manufacturing and processing and is particularly focused to root out any noncompliance with the Vitamin E Acetate Ban (see under).

     b.     Emergency Guidelines (WAC 314-55-1065) – LCB Vitamin E Acetate Prohibition (previously LCB Vitamin E Acetate Ban) (Efficient January 6, 2021)

This rule extends the ban on vitamin E acetate.

     c.     Emergency Guidelines (WAC 314-55-077) – Marijuana Processor License – Privileges, Necessities and Charges (Efficient January 6, 2021)

This extends the emergency rule allowing enforcement motion towards any licensed marijuana processor that fails to adjust to the ban on vitamin E acetate.

     d.     Emergency Guidelines (WAC 314-55-079) – Marijuana Retailer License – Privileges, Necessities and Charges (Efficient January 6, 2021)

This extends the emergency rule allowing enforcement motion towards any licensed marijuana retailer that fails to adjust to the ban on vitamin E acetate.

     e.     Adopted Everlasting Rule (CR-103P)  Certificates of Compliance (referring to location compliance)

This rule implements laws requiring the WSLCB to concern a certificates of compliance for a marijuana enterprise (a) applicant and (b) license holder below sure circumstances. For the applicant, the certificates will probably be issued if the enterprise premises meets the statutory buffer zone necessities on the time the license software was filed. For the license holder, the certificates will probably be issued if the enterprise premises meets the statutory buffer zone on the time the WSLCB receives the license holder’s software to obtain a certificates of compliance.

The certificates gives a secure harbor in that it permits the licensee to function the enterprise on the location even when an in any other case disqualifying issue later emerges concerning the statutory buffer zone.

WA Activity Pressure on Social Fairness

The Washington job pressure on social fairness was born from laws enacted in 2020 within the wake of the mass social justice protests. The duty pressure is in its infancy, and its developments are being intently coated by the Cannabis Observer.

The duty pressure just lately adopted working ideas specializing in anti-racism and will probably be creating its first working teams to handle disproportionate impression areas, technical help, and license sorts in Washington’s marijuana market. Its objective is to handle the racial inequity within the preliminary licensing rounds partly by making as much as 34 marijuana retailer licenses accessible from current licenses (forfeited, revoked, or canceled) and accessible licenses not but issued by WSLCB. $1.1MM has additionally been appropriated to help candidates with the licensing course of and associated marketing strategy help.

We are able to anticipate to see vital modifications within the retail market in 2021 as the duty pressure continues its work and the WSLCB complies with its legislative mandate. We are able to additionally anticipate elevated schooling particularly targeted on communities and areas which have been traditionally disproportionately affected by the enforcement of marijuana prohibition legal guidelines.

Hashish Compliance Session

The WSLCB just lately introduced the composition of its Hashish Compliance Consulting Group, which permits licensees to request a site visit for assist figuring out areas of potential non-compliance with an intention towards encouraging voluntary compliance somewhat than licensees ready for the WSLCB to find and provoke some kind of formal enforcement. These 11 consultants are unfold throughout the state and can be found to assist producers, processors, retailers, researchers, and transporters. Regardless that they can not concern administrative violations, we anticipate to see a tepid response throughout 2021 from most licensees who’re loath to ask any governmental or quasi-governmental authorities into their enterprise for compliance associated issues.

Enforcement Actions

The WSLCB made a giant announcement in late 2020 concerning its shutting down the hashish testing lab Praxis for falsifying take a look at outcomes. The WSLCB will proceed to root out fraud in all elements of {the marketplace}. For these , there will probably be dialogue sessions on hashish testing the place you possibly can present your enter.

New Financing Preparations

Within the wake of the social fairness program rollout we anticipate to see elevated funding as financiers lend funds and put money into as much as a 49% fairness stake in new social fairness retail licensees. As a reminder, take a look at this post concerning the distinction between a real social gathering of curiosity and a financier. Completely different disclosure guidelines apply to those events as pertains to licensees, and you do not need to be the license holder, the true social gathering of curiosity, or the financier on the WSLCB’s unsuitable facet.

Business Consolidation

We’ve blogged previously concerning the WSLCB’s overreaching into license holder {qualifications} and restrictions, and nowhere is that this extra related than in cases the place WSLCB laws conflict with trade consolidation. Up to now few months now we have been concerned in lots of discussions and offers concerning trade consolidation, the place MSOs (multi-state operators) and worldwide hashish firms (particularly Canadian public companies) are attempting to purchase and promote pursuits in WSLCB licensees. We are able to anticipate extra of this in 2021 and extra WSLCB resistance to MSOs and overseas funds investing within the Washington hashish market.

Hemp Program

Washington’s hemp program is kind of mature due to the state’s expertise with the marijuana trade. The WSLCB continues to carry its floor on CBD merchandise it considers inside its purview, which is why meals and vapor merchandise containing CBD are solely permitted throughout the state authorized marijuana market. No vital modifications will occur on this entrance till the FDA comes out with extra steerage on the standing of CBD and associated cannabinoids.

Litigation and Dispute Decision

We anticipate to see a rise in disputes amongst license holders, homeowners, financiers, suppliers, and clients within the trade. That is due partly to Covid fallout and half to trade maturity. Individuals who engaged in transactions with out a lawyer or with out a good lawyer concerned will probably be preventing over each their enterprise relationships and the poor contracts that underpin them (in the event that they even bothered to place a contract down on paper).

We don’t anticipate the WSLCB to let up in any respect in 2021, however there are lots of methods for Washington and out-of-state hashish companies to thrive throughout the market this yr.