Cannabis regulators in Washington state, where a single-tier system may limit the benefits of federal marijuana rescheduling, are tweaking the rules to help operators potentially qualify for tax relief and U.S. Drug Enforcement Administration registration.
In response to a petition from a statewide industry advocacy organization, the state Liquor and Control Board unanimously agreed on Wednesday to create a new certificate that would allow Washington state operators to prove they are engaging in “state-authorized medical cannabis activities.”
Doing so would help licensees “seeking banking, federal registration, research participation, or insurance coverage” demonstrate their compliance with state law to federal officials, The Cannabis Alliance told regulators in an August letter.
Do Washington state cannabis operators qualify for federal 280E relief?
Unlike most other states with mature cannabis markets, Washington licenses businesses in its roughly $1.1 billion annual market through a single adult-use cannabis permit.
That’s created complications since the April federal Justice Department final order that reclassified state-licensed medical marijuana as a Schedule 3 drug.
Though state regulators as well as operators are still waiting for precise details from Washington, D.C., benefits such as federal tax relief from Internal Revenue Service Code 280E and registration with the U.S. Drug Enforcement Administration appear limited to compliant MMJ operators.
In response, some states have adjusted rules. In California, operators are now easily able to add a medical designation to their existing license.
Doing that in Washington might require a brand-new license designation, which in turn could create problems for operators who did not have that permit when they applied to the DEA, Alliance Executive Director Caitlein Ryan told MJBizDaily on Thursday.
Instead, a certificate program that “would provide Washington licensees with accurate, state-issued documentation of their regulatory status” would fill in regulatory gap “without altering federal eligibility requirements,” The Alliance told the LCB in their August letter.
The board voted 3-0 on Wednesday to approve the request despite opposition from staff.
According to a meeting packet, staff opined that a licensee with a medical cannabis certificate could still sell to adult-use consumers, which “very likely would not conform to federal medical cannabis standards.”
It’s not clear when Washington state cannabis operators would be able to obtain the certificate.
When will the DEA give more guidance on federal marijuana rescheduling?
Operators and regulators alike across the country are eagerly awaiting promised guidance from the U.S. Treasury Department on key points around marijuana rescheduling including what qualifies a licensee for federal 280E tax relief – and when the relief applies.
Other states crafting their nascent medical programs to existing sketchy federal guidelines have asked federal officials for more guidance. So far, they’ve been greeted with silence.
“It’s past time, and high time, for DEA to communicate with state regulators like us here in Georgia to better understand” the DEA registration process, offered to state-licensed operators in the spring, Georgia Access to Medical Cannabis Commission Executive Director Andrew Turnbull said last month.
“Unfortunately, we don’t have written guidance from the DEA.”
