Recently I have been asked – “How do I become a licensed wholesale distributor of marijuana in Washington State.” The simple response is that you can’t.
Washington State has a three tiered licensing system:
- Licensed producers can grow marijuana and sell their plants to other licensed producers and processors.
- Licensed processors can process marijuana for sale at wholesale to other licensed processors and retailers.
- Licensed retailers can sell marijuana products to persons over 21 at retail stores.
Only licensed processors can distribute marijuana at the wholesale level to licensed retailers. When Washington State legalized marijuana, it did not provide for third party distributors and/or wholesale distribution centers for marijuana. Nor has this been proposed in any of the recent legislative amendments.
This has left licensed marijuana processors in charge of distributing their own product. For some licensees this is a natural fit, for other processors, distribution and marketing can be a difficult task.
One task, however, that may soon be taken over by third parties is transportation. The Liquor and Cannabis Board (the “LCB”) has proposed new rules for the issuance of a third party transportation license.
WAC 314-55-310 would allow a transportation licensee to physically transport or deliver marijuana and marijuana products between licensed marijuana businesses within Washington State. Among the requirements for a transportation license is that all vehicles and trailers must be permitted by the UTC as common carriers.
Transportation licensees will likely be subject to the same application requirements as other licensees. As such, it does not appear that out-of-state residents will be able to be licensed marijuana transporters. It will be interesting to see if there is sufficient interest in this new license given the insurance requirements and other preconditions.
Stay tuned for further updates on LCB rulemaking. New marijuana rules are expected to be adopted this summer.
For more information on the regulation of marijuana businesses, please contact Heather Wolf.