The Washington State Liquor and Hashish Board (WSLCB) launched a rules guide on July 14, “outlining laws of merchandise containing THC”. The information is titled “Discontinued Gross sales of Merchandise Containing THC by Companies that Do Not Maintain a Hashish License” and it pertains to lately enacted SB 5367, which we’ve been following carefully.
As we defined right here, SB 5367 redefined “hashish product” to incorporate merchandise with any detectable quantity of THC. It is a important departure from the established order that allowed extraordinary retailers and not using a WSLCB licensed hashish retail license (e.g. comfort shops, on-line sellers) to promote merchandise that contained 0.3% or much less THC. Numerous these merchandise — principally hemp-derived CBD merchandise — are at present on cabinets in shops with out hashish licenses everywhere in the state.
SB 5367 is efficient July 23 and there have been critical open questions from the invoice that wanted to be answered. A few of them now have been…type of.
Licensure required to “manufacture, promote, and distribute” merchandise with THC content material, or else
We already had affirmation from the WSLCB that merchandise containing 0.3% or much less THC at the moment are going to be thought-about hashish merchandise and solely out there on the market by licensed hashish companies. The principles information confirms this, and states that promoting these merchandise and not using a license is topic to felony sanctions.
The principles information is silent about when the WSLCB goes to be implementing this new regulation—the efficient date of July 23 or after the rulemaking is full early subsequent 12 months. It’s ridiculous that the WSLCB didn’t embrace an announcement within the information answering that query. What are companies imagined to assume? Is the WSLCB going to go round arresting or citing retailer homeowners writ massive on the twenty third who nonetheless have these CBD merchandise on their cabinets? I work onerous to keep away from alarmist interpretations of latest laws, however the WSLCB is placing companies able of getting no selection however to plan for and count on the worst.
The principles information goes on to state that “Solely these with a sound hashish license issued by the Liquor and Hashish Board could manufacture, promote, or distribute … cannabis-infused merchandise.”. The principles information additionally supplies that “cannabis-infused merchandise embrace any product with any detectable quantity of THC meant to be: consumed, absorbed contained in the physique by any means together with: inhalation, ingestion, insertion.” There you will have it: all merchandise (besides CHABA’s, see beneath) with any THC content material (sure, together with federally authorized THC content material beneath the Farm Invoice) are hashish infused merchandise beneath Washington regulation. Which means companies which can be manufacturing, promoting, or distributing them should have a WSLCB hashish license.
Hashish Well being and Magnificence Help (CHABA) merchandise are exempt from SB 5367. These are topical merchandise not meant for human consumption like CBD gummies, joints, tinctures, and so on., and FDA has taken the place that these merchandise could also be kosher. The information additionally makes clear that FDA authorized merchandise like hemp seed, hemp seed oil, and so on. are exempt.
Unsure instances forward for Washington hemp and CBD product gross sales
The WSLCB’s interpretation of SB 5267 is an enormous regulatory shift for the Washington hashish and CBD industries. Retail companies with out hashish licensure ought to insist that the WSLCB present readability on an efficient date for enforcement and whether or not there might be a grace interval for violations. Whether or not that date is subsequent week or subsequent 12 months, it is a good time to revisit contracts and think about points like contract termination, breach, and defenses.
CBD producers will likewise be in a bind if they’re at present producing merchandise with federally authorized quantities of THC. My guess is there might be a great deal of M&A and different enterprise transactions between hashish companies and CBD companies. The practicality and expense of constructing an operation compliant with this regulation — as in comparison with promoting or partnering with licensed operators — will enchantment to some. This steerage is a worst-case situation for a lot of companies within the Washington CBD area and from what I’m listening to has caught many abruptly.
We’ll proceed to observe developments associated to SB 5267 and Washington’s regulation of merchandise that include THC.