Coronavirus and Cannabis: Washington Regulatory Updates

By Sahar Ayinehsazian and Kelsey Middleton

Mar 20, 2020

This VS Insight is dedicated to updates regarding the coronavirus and cannabis in Washington. For updates on other states or coronavirus-related issues, see our main post on the subject, "Coronavirus and Cannabis: Monitoring the Impact."

Cannabis regulations are in flux across the U.S. as officials at every level of government work to contain the new coronavirus (COVID-19). Vicente Sederberg is closely monitoring the situation, and we are communicating with regulators to understand how these local, state and federal responses may affect cannabis business operators, medical patients, and other cannabis consumers. We are committed to doing everything we can to keep our clients and the public updated as we learn of new developments, but please note this is an extremely fluid situation and there is a lot we do not know. This VS Insights post is for informational purposes only and not for the purpose of providing legal or tax advice. We strongly encourage you to contact an attorney if you are seeking advice regarding any specific legal or tax issue.


LATEST UPDATES

March 27, 2020

  • LCB approved Emergency Rule CR103E, allowing LCB to waive fees and penalties assessed to marijuana licensees who were or are late paying their monthly excise taxes. The rule applies retroactively from February 29, 2020, until the Governor’s emergency proclamation is lifted or the board rescinds the rule. Please note that this rule does not relieve any statutory tax obligations of the licensee.

March 24, 2020

  • LCB sent a bulletin to cannabis licensees informing them of temporary modifications it has made to allow businesses to “act quickly and minimize their impacts on disease transmission.”

    • Such temporary modifications include expanding curbside sales beyond qualified medical patients, allowing adult-use customers to use this method, too, to promote social distancing.

      • The bulletin reiterates and clarifies some of the curbside service requirements licensees must observe. These requirements include:

        • No drive-thru windows.

        • IDs must be checked and no one in the car may be under 21 years of age.

        • Curbside sales must be stationary, physically designated,  and located as close to the leased premises as possible. Physical designations may include:

          • Tape or painted parking spots

          • Cones or signage

        • Where possible, video cameras should monitor and record the designated sales area.

        • Outdoor sales from a tent or kiosk are prohibited.  

    • LCB represents that they are actively pursuing deferment and waiver of penalties for late payment of taxes. This action would require a proclamation from the Governor.

  • LCB has temporarily relaxed its restrictions on minors being present on the premises of a licensed marijuana production or processing establishment under certain circumstances. The intent is to accommodate families that have been impacted by school closures. Beginning immediately and effective through April 30, 2020, LCB will not enforce the minor restriction provisions for families who have children under the age of 16 on licensed premises, if the following conditions are met:

    • The person under 16 years of age is a child or grandchild of the licensee

    • The person under 16 years of age is not engaging in any work for the licensed business

    • The person under 16 years of age does not possess any products associated with the product, processing, or sale of marijuana

    • This guidance only applies to licensed marijuana producers and processors. It does not apply to retailers or transporters. 

March 18, 2020

  • Washington State Liquor and Cannabis Board (LCB) issued a second bulletin for cannabis licensees outlining best practices for continuing cannabis operations during COVID-19. Based on CDC guidance and Governor Inslee’s Proclamation, cannabis retail establishments must adhere to the following preventive measures:

    • Older adults and persons with pre-existing medical conditions, including employees, who are at increased risk of serious COVID-19 are encouraged to stay home.

      • LCB suggests that businesses consider implementing dedicated times exclusively for highly vulnerable populations, such as the elderly.

    • Observe social distancing:

      • CDC advises limiting contact of people within six feet from each other for 10 minutes or longer. The Washington Department of Health (DOH) warns that “being within 6 feet of a sick person with COVID-19 for about 10 minutes” constitutes close contact that may result in exposure.

      • LCB suggests that establishments consider “how close people will be and for how long” and organize the business in a way that allows people to avoid close contact with others.

      • LCB asks businesses to consider whether their store’s traffic meets DOH standards and whether mitigation measures, including limiting the number of persons allowed in the store at any one time, marking out 6-foot intervals with tape on the ground for lines, or using an app that allows customers to queue from a distance, can be implemented.

    • Screen employees for coronavirus symptoms daily and strongly consider excluding symptomatic employees.

    • Make proper hand hygiene and sanitation readily available to all attendees and employees.

    • Follow environmental cleaning guidelines from the CDC, including cleaning and disinfecting high-touch surfaces daily at a minimum.

March 17, 2020

  • LCB issued a bulletin regarding help for cannabis licensees during the restriction resulting from COVID-19. For the time being, LCB has issued temporary modifications to allow dispensaries to offer curbside service to qualified medical patients with valid authorization and recognition cards, and designated care providers. Although cannabis businesses are not required to close at this time, LCB encourages licensees to conduct transactions outside of their business, but within the licensed property line.

  • LCB further indicates that they are “actively exploring deferment of taxes and fees to ease payment obligations” on cannabis licensees and encourages stakeholders to review the Coronavirus section of the LCB website for updated information on tax, fee, and penalty relief and more.

March 15, 2020

  • Washington State Governor Jay Inslee released a statement regarding the statewide shutdown of restaurants and bars, and limiting the size of gatherings to no more than 50 people. Cannabis retailers, however, are not required to close at this time.