Drastic Changes Are Coming to Washington State's Medical Marijuana Industry

Do you grow these for medical use? Major changes are coming your way. Kelly O

Ever since the state legislature convened in January, lawmakers have been bickering about basically every aspect of marijuana law. Taxes, research, home grows, medical pot—it’s all on the table and lots of it has been at the mercy of the Republicans who control the state senate. Over the last few days, a massive bill to overhaul medical marijuana has passed through the hamstrung bureaucratic swamp. Here's what it would do, which is a hell of a lot.

First, a quick refresher: The medical and recreational marijuana industries exist entirely separately in Washington. Medical growers and stores are not licensed or regulated. Some of them test their products for pesticides, for example, but there is no requirement to do so. Recreational businesses, in sharp contrast, are subject to special taxes and a bunch of strict rules about what they’re allowed to do. That’s made pot in medical stores cheaper, which—if you accept that there are some customers who are not true medical patients, which most people do—has made them tough competition for the new recreational market. So began the push in Olympia to do something. While some patient advocates argued the systems should be kept separate, others, including business owners licensed under Initiative 502 and prominent supporters of the legalization law, wanted to merge them so everyone would play by the same rules.

That latter idea is the one that drove this bill, which was championed by Republican Sen. Ann Rivers (La Center) and has passed by both the senate and house. If Governor Inslee signs it, the law will make significant changes to basically everything about how medical marijuana works in Washington, most of them taking effect next July.

What does this mean for patients?

First of all, most dispensaries are likely to shut down, meaning that if you're a patient you’ll have fewer options for buying medical marijuana. The city of Seattle estimates that there are at least 300 marijuana businesses inside the city. With only a handful of recreational stores and growers, that means most of those are medical. Plus, medical businesses haven’t had to abide by the same location restrictions as recreational stores (1,000 feet from schools and parks), so there are more of them.

If you have a doctor’s recommendation to use cannabis, you’ll no longer buy it at a medical dispensary. Beginning next July, you’ll go to the recreational stores opened under I-502 instead.

A new phrase will enter your vocabulary: medically endorsed marijuana stores. These are recreational stores that will carry some products intended for medical use and have staff trained to know about the medicinal qualities of different strains and products. These stores will also be allowed to give marijuana away for free, at their discretion, to patients, which some dispensaries do now for low-income patients.

Medical marijuana patients will also have the option of joining a patient registry.

Joining the registry will allow you to buy up to three ounces of marijuana at once rather than the current one ounce limit in recreational stores. However, both options are significantly lower than the 24 ounces patients are currently allowed to buy.

The registry could also get you a small tax break. Under the bill that has passed, patients would not get a tax break at these new medically endorsed stores. They'd have to pay state excise taxes—between 30 and 37 percent, depending on which tax proposal currently making its way through the legislature passes—just like those who are buying marijuana for recreational purposes. But a separate house proposal on the move would exempt patients from the smaller state sales tax if they sign up for the registry.

To join the registry, you'll have to go to a medically endorsed store where a staff member will enter your name and how much marijuana a doctor has authorized you to use into a database. Then, you'll pay $1 for a “recognition card” that features your photo, the amount of marijuana you’re allowed, the doctor who recommended it, and an ID number.

Registries are controversial because the federal government has been known to access them in order to prosecute people for marijuana use. So patients advocates and the ACLU of Washington consider the fact that the registry is optional a partial win.

If you’ve gone to a medical dispensary, you know most of them have a ton of different products, including those especially useful for patients such as low-THC strains, topicals, tinctures, and cannabis juice cubes. Many are rightfully skeptical that the recreational stores are ready to offer that same range of products. In an attempt to (kinda) address that concern, the proposed law requires the Liquor Control Board to come up with requirements for the types of products medically endorsed stores will have to carry, including some low-THC, high-CBD products, which don’t get you high and are often used by patients.

If you grow your own marijuana for medical use, you’re currently allowed up to 15 plants. The new law will reduce that to four plants, or six plants for people in the registry unless their doctor specifically recommends more in writing. (One possible problem: Some patient advocates say doctors are hesitant to recommend specific amounts because that could be considered prescribing an illegal drug, which could put a doctor's federal license to prescribe controlled substances at risk. So whether any doctors will actually be willing to recommend higher plant counts in the new system remains to be seen.)

Under current law, groups of up to 10 people have been allowed to grow up to 45 plants for medical use in a cooperative. Those would now be reduced to four people per co-op, but the maximum plant count will be upped to 60. The new law would also require those cooperative grows to register with the Liquor Control Board, which could inspect them and be allowed to put new rules on them, possibly even requiring a seed-to-sale traceability system like the one recreational growers and stores currently have to use.

(By the way, that much-needed bill that would have allowed home grows for everyone in the state got no traction.)

What does this mean for dispensary operators?

Considering the sheer number of medical marijuana businesses in Seattle, it’s basically impossible for all of them to survive.

The Liquor Control Board is supposed to license new stores and some of those could be current medical dispensaries switching to recreational stores, but just how many is up to the board. The bill sets out a list of businesses that should get priority for new licenses. At the top: Medical dispensaries that have been open since before January 2013 and that have applied to the Liquor Control Board for an I-502 license. In other words, people who’ve had an interest in the recreational marijuana game. As it stands today, at least 1,900 retail store applications have been submitted to the Liquor Control Board but not yet granted. We don’t know how many of those were submitted by medical business owners or by the same person applying for multiple licenses, but still—that’s a lot of people who may get a shot at a new license.

The process for getting medical growers up and running will be similar: The Liquor Control Board will have to reconsider the limits it has set on how much pot can be grown in the state and then open up more space to already licensed growers who want to produce new strains meant especially for medical use. Then, if those growers don’t use all the production space allowed, the Liquor Control Board can license new growers.

You can look at all of this in one of two ways. Either this means that the people who are most prepared to meet all of the Liquor Control Board's requirements and get their doors open right away will be at an advantage. Or this will favor business owners who have been more interested in profiting off the recreational market than providing medicine, cutting out those who were only ever interested in helping sick people. Maybe it's a little of both.

What does this mean for recreational store owners?

Generally speaking, recreational pot entrepreneurs wanted this outcome. Store owners have been complaining since they opened about the competition they face from the medical market, where products are cheaper and stores are more plentiful. That’s worsened by the “bad actors”—medical stores that don’t actually check for doctor’s recommendations, effectively competing directly for the same recreational customers as the legal guys.

So, the new recreational industry, with the help of some deep pockets, argued for a “level playing field,” where they weren’t subjected to more regulations than their counterparts on the medical side.

If the new system goes into effect, recreational stores who want to serve patients will have to show that they carry certain medical products—the specifics of this will be fleshed out by the Liquor Control Board over the next year—and that they're capable of entering patients in the state registry in-store. If successful, they’ll be able to advertise themselves as medically endorsed.

So now what?

The bill is on to the governor. Some medical activists are calling for him to veto it, but that looks unlikely.

If he signs it, the success of this new model will largely be in the hands of the Liquor Control Board. Combining the markets is not a totally unheard of concept. Colorado already had a well-regulated medical system when they legalized, so they merged their systems. Now, Colorado stores sell both medical and recreational weed. Lots of other states have voluntary patient registries. Even the advocates who fought this bill acknowledge that the new safety precautions, like requiring the people growing and selling medical cannabis to test it, are necessary and good.

But it’s going to be a rough transition, especially considering the fledgling nature of our recreational market, in which some cities have outright banned pot stores and Seattle still has only a handful of them.

So, who do we keep an eye on now? It’ll be up to the Liquor Control Board to quickly license new growers and stores so the market will be ready if/when the switch happens next summer. And it’s on the legislature to be nimble and responsive if the potential negative effects on patients materialize. Alongside all the "fakers" buying untaxed medical marijuana without a real need—who will hopefully be forced out of that practice by this new model—there are real, sick patients whose well-being depends on it.