Politics
Washington Officials Take Steps To Make It Easier For Medical Marijuana Businesses To Access Federal Rescheduling Benefits
Marijuana regulators in Washington State are moving forward with creating a process to allow marijuana businesses to document their participation in the medical cannabis market in order to ease their access to benefits that come with the Trump administration’s partial rescheduling move.
Under an order issued by Attorney General Todd Blanche in April, marijuana products regulated by a state medical cannabis license immediately moved from Schedule I of the Controlled Substances Act (CSA) to Schedule III, as did any marijuana products that are approved by the Food and Drug Administration (FDA).
While an administrative hearing is considering broader marijuana rescheduling, Washington businesses in the meantime have no way to verify their medical cannabis-specific activities, and state Liquor and Cannabis Board (LCB) officials said in June that rescheduling cannabis on the federal level “does not appear to apply” to businesses in Washington.
But LCB on Wednesday unanimously voted to accept a rulemaking petition from The Cannabis Alliance and Caitlein Ryan that seeks to create a process allowing marijuana businesses to “request verification of their regulatory status and activities authorized under [medical cannabis laws] for use in governmental, regulatory, financial, research, insurance, litigation, or other lawful purposes, including federal registration processes.”
The board’s acceptance of the petition in a 3-0 vote comes despite a recommendation from agency staff to reject it.
“Licensees seeking banking, federal registration, research participation, or insurance coverage have no access to structured, state-issued documentation of their regulatory status,” the now-accepted petition for rulemaking says. “The absence of a state verification process may also prevent licensees from demonstrating their state regulatory status when seeking protections, rights, or registrations available under federal law. As federal cannabis law evolves, a standardized verification process ensures licensees have access to accurate state-issued documentation while leaving federal legal determinations to the appropriate federal agency.
Staff had argued that state officials would have difficulty verifying a business’s medical cannabis activities and would need to “rely on self-reporting by the licensees themselves,” also expressing concerns that implementing a new certification process could “produce significant administrative and staffing burdens.”
Certifying medical cannabis activities would additionally “not prohibit a licensee from engaging in recreational cannabis production, processing, or sales,” the staff recommendation said. As such, a certificate “very likely would not conform to federal medical cannabis standards or assist the licensee with qualifying for the federal cannabis registration program the requested rule petition is seeking to accommodate.”
LCB member Pete Holmes said during the meeting before the vote that while he acknowledged the staff’s “very real resource and other concerns,” he felt it was appropriate to accept the petition and include it in the state’s “broader effort” to cooperate with the federal government on cannabis and other issues.
That said, Holmes also sought to lower expectations that state officials can significantly improve the “precarious nature of our industry amid all of these economic, legal and political times” by accepting the petition.
“If you believe that we, the LCB, can inject certainty into any federal program managed under this federal administration, I think you’re simply being unrealistic,” he said. “The petition doesn’t propose a magic bullet, and I’m not sure what will come of it.”
Ahead of Wednesday’s meeting, The Cannabis Alliance organized supporters to submit comments to the board in support of the proposal, noting that the staff’s rejection recommendation offered “no alternative process to address the documentation gap” for marijuana businesses.
“We are asking the Board to preserve the petition’s purpose and work with stakeholders on practical details. It does not have to adopt every provision of our suggested language to move forward,” the group said.
LCB officials will now move ahead with the process of actually creating rules to allow the medical cannabis business certification process.
In the previously issued guidance memo in June, LCB said that “Washington does not license medical cannabis producers, processors, or retailers.”
“Instead, Washington has a single recreational market and within that market producers/processors may manufacture [Department of Health]-compliant products, and certain retailers may sell DOH-compliant products to all adult patients and designated providers,” it explained.
“Because of this, Washington’s cannabis licensees do not appear to qualify as ‘state medical marijuana licensee[s]’ and therefore may not be eligible to register under the Final Rule,” the agency said, referring to a Drug Enforcement Administration (DEA) registration process for state-legal marijuana businesses to take advantage of federal benefits that come with the reform.
That said, LCB is “not taking a position to prevent licensees from applying for federal registration if they choose,” the guidance continued. “If any licensee does apply for federal registration, we would be interested in learning about their experience and any federal determination.”
Nonetheless, “based on our analysis, federal rescheduling in its current form does not appear to apply to Washington’s cannabis licensees due to the statutory framework predominately regulating recreational cannabis,” LCB said.
Washington isn’t the only state moving to reform its own marijuana rules in light of the federal rescheduling process.
In California, regulators recently adopted emergency rules changes for the state’s marijuana licensing process that are intended to make it easier for businesses to qualify for benefits in line with the Trump administration’s recent move to federally reschedule medical cannabis.
Meanwhile, top marijuana regulators from a growing number of states are complaining that federal officials are not providing enough—or any—guidance about federal rescheduling.
