I have just finished reading one of the funniest government documents I have seen in a long time. No, it’s not the recycling rules for Seattle trash pick-up I encountered after becoming New To Seattle, although they’re quite amusing, too. I am referring to the revised proposed rules issued yesterday by the Washington State Liquor Control Board to govern the state’s fledgling recreational marijuana industry, centered around Seattle, that was legalized by voters last year.
It isn’t every day you see an official 43-page document specifying that labeling for a product still officially illegal under federal law must include these warnings: “Caution: when eaten or swallowed, this intoxicating effects of this drug may be delayed by two or more hours … This product has intoxicating effects and may be habit forming … Smoking is hazardous to your health.”
The rules declare solemnly that marijuana may not be labeled as organic “unless permitted by the United States Department of Agriculture in accordance with the Organic Foods Production Act.” Remember, the feds based in the Other Washington still consider all of this illegal, although they say they will look the other way.
In a helpful illustration, the rules even include a sample label for “The Best Resins Space cake,” a marijuana-infused product. In addition to the stated ingredients (“flour, butter, canola oil, sugar, chocolate, marijuana and strawberries”), there is this: “THIS PRODUCT IS UNLAWFUL OUTSIDE WASHINGTON STATE.”
But to me, the more serious take-away is that the layers and layers of regulations, licenses, restrictions and taxes in the rules–plus the hiring of lawyers to navigate all this–will drive the cost of legal (in Washington, anyway) pot way up. So much so, I predict, the biggest user group–young adults without a lot of money–will still go to the black market and their friendly local dealer, who will have no problem competing on price. And that’s going to force the authorities to keep arresting or charging folks–not due to anti-drug zeal but to protect what the state hopes will be a cash cow, which includes collection of a 25% excise tax.
How much regulation?
There will be statewide limits on production. All lots will require testing by “independent accredited labs” using “established and uniform testing standards.” Retailers will be allowed to maintain an inventory of no more than four months. Annual renewal fees for licenses will be $1,000, plus additional assessments for background checks. Sellers will be required to install alarm and surveillance cameras. The merchandise must be sold in child-resistant packaging. And the rules sternly state, “Retailers may not provide free samples to customers.”
Statewide, retail outlets will be limited to 334 stores, or roughly 1 for every 16,000 adult residents (marijuana remains illegal for those under 21) and must not be a location within another store. The liquor board released an elaborate schedule breaking out the allocation for every town based on population and “estimated consumption data.” King County is to have 61, more than any other of the state’s 39 counties, with at least 21 of them in Seattle, more than any other city.
No one will be allowed to hold more than three retail licenses statewide. After the inevitable shake-out of poorly run or under-financed outlets, my guess is that there will be a consolidation with the more successful operators using fronts or other ploys to hide their ownership in an effort to effectuate some economy of scale.
The rules mandate extensive “traceability” of all marijuana products. I can do no better than quote the actual language:
All costs related to the reporting requirements are borne by the licensee. Marijuana seedlings, clones, plants, lots of usable marijuana or trim, leaves, and other plant matter, batches of extracts and marijuana-infused products must be traceable from production through processing, and finally into the retail environment including being able to identify which lot was used as base material to create each batch of extracts or infused products.
I don’t think this scheme will come cheap.
Then there’s the section on customer purchase limits:
(1) Single serving. A single serving of a marijuana-infused product amounts to ten milligrams active tetrahydrocannabinol (THC), or Delta 9.
(2) Maximum number of servings. The maximum number of servings in any one single unit of marijuana-infused product meant to be eaten or swallowed is ten servings or one hundred milligrams of active THC, or Delta 9. A single unit of marijuana-infused extract for inhalation cannot exceed one gram.
(3) Transaction limitation. A single transaction is limited to one ounce of usable marijuana, sixteen ounces of marijuana-infused product in solid form, seven grams of marijuana-infused extract for inhalation, and seventy-two ounces of marijuana-infused product in liquid form for persons twenty-one years of age and older.
Customers aren’t going to be able to come out of a pot shop full of goods like they do over at Costco. That will force retailers to keep prices up to cover their overhead over a smaller purchase base.
One mandate that won’t be much of a problem: state residency requirement for those in the industry. It’s all of three months.
And while a felony conviction automatically will disqualify someone from getting a marijuana license for ten years, a single conviction for a gross misdemeanor will not. And until next summer, as many as two misdemeanor convictions for possession of marijuana will be ignored. Hey, that weed know-how has to come from somewhere!
Buyers of pot may have to show proof of their age. But tourists, especially, will be happy to know that the rules allow passports, plus driver’s licenses and government-issued ID “of any state,” to fulfill that function.
The rules likely will become final later this year, with the first legal rec pot stores opening next year. In a sop to the free market in this highly regulated state, government officials will not set minimum prices. With this regulatory scheme, they won’t have to. Maybe not so funny.
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Regulation always comes at a cost.
It would be sadly and weirdly ironic if current anti-drug enforcement efforts have to continue without letup in order to make sure consumers buy only regulatory-approved, quality-assured, traceable, portion-controlled pot at an approved, inspected, secured, inventory-limited location. Oh, said enforcement would obviously be needed to protect that 25% excise tax revenue stream from price competition.