HB 1237 — Reforming the compliance and enforcement provisions for marijuana licensees.

H-2184.1SECONDH-0305.2HOUSE SUBSTITUTE HOUSE BILL 1237State of Washington66th Legislature2019 Regular SessionByHouseSessionByRepresentatives Appropriations (originally sponsored by Representatives Kirby, MacEwen, Stanford, Vick, Blake, Eslick, and Appleton)READAppletonRead FIRSTfirst TIMEtime 03/01/19.AN01/17/19.Referred to Committee on Commerce & Gaming.AN ACT Relating to reforming the compliance and enforcement provisions for marijuana licensees;

creating a new sections;section;

(1) The legislature finds that:(a) In the years since the creation of a legal and regulated marketplace for adult use of cannabis, the industry, stakeholders, and state agencies have collaborated to develop a safe, fully regulated marketplace.(b) As the regulated marketplace has been developing, Washington residents with a strong entrepreneurial spirit have taken great financial and personal risk to become licensed and part of this nascent industry.(c) It should not be surprising that mistakes have been made both by licensees and regulators, and that both have learned from these mistakes leading to a stronger, safer industry.(d) While a strong focus on enforcement is an important component of the regulated marketplace, a strong focus on compliance and education is also critically necessary to assist licensees who strive for compliance and in order to allow the board to focus its enforcement priorities on those violations that directly harm public health and safety.(e) The risk taking entrepreneurs who are trying to comply with board regulations should not face punitive consequences for mistakes made during this initial phase of the industry that did not pose a direct threat to public health and safety.(2) Therefore, the legislature intends to provide amnesty for violations that occurred before AprilJune 30, 2017,2018, and to reform enforcement penalties to better align with state priorities.NEW SECTION.  Sec.

and(iv) Effective enforcement of its compliance program as written in practice and not just in theory.(3) The board may not consider any violation that occurred before AprilJune 30, 2017,2018, as grounds for denial, suspension, revocation, cancellation, or nonrenewal, unless the board can prove by clear, cogent, and convincing evidence that the prior administrative violation evidences:(a) Diversion of marijuana product to the illicit market or sales across state lines;(b) Sales of marijuana product to minors;(c) Diversion of revenue from the sale of marijuana product to criminal enterprises, gangs, or cartels;(d) Use of firearms in a facility licensed by the board that poses a direct and significant threat to public safety;

However, any prior administrative violation that occurred before AprilJune 30, 2017,2018, must not be considered unless the board can prove by clear, cogent, and convincing evidence that the prior administrative violation evidences:(i) Diversion of marijuana product to the illicit market or sales across state lines;(ii) Sales of marijuana product to minors;(iii) Diversion of revenue from the sale of marijuana product to criminal enterprises, gangs, or cartels;(iv) Trafficking of a controlled substance;

and(ii) Is in writing and signed by the licensee and the hearing examiner or designee of the board.(b) "Settlement conference" means a meeting or discussion between a licensed marijuana producer, processor, retailer, researcher, transporter, researcher, or authorized representative of any of the preceding licensees, and a hearing examiner or designee of the board, held for purposes such as discussing the circumstances surrounding an alleged violation of law or rules by the licensee, the recommended penalty, and any aggravating or mitigating factors, and that is intended to resolve the alleged violation before an administrative hearing or judicial proceeding is initiated.NEWinitiated.Sec. SECTION.  Sec.

A new section is added to chapter 69.50 RCW to read as follows:(1)(a) The board's officers and employees, while enforcing any provision of this chapter, chapter 69.51A RCW, or any rule adopted under authority of these chapters, are designated as inspectors or employees and do not have law enforcement authority, except as provided in (b) of this subsection, to enforce penal provisions of any law of this state against marijuana licensees or employees of marijuana licensees, relating to the manufacture, processing, distribution, transportation, or sale of marijuana or marijuana products.(b) Subject to (c) of this subsection, officers and employees of the board with enforcement authority under this chapter who are designated as inspectors may, if and when authorized under another section of this chapter:(i) Inspect premises, books, and records of licensed marijuana businesses, and investigate licensees, applicants, and premises of licensed marijuana businesses, to ensure compliance with any applicable provision of this chapter, chapter 69.51A RCW, or rules adopted under these chapters;

and(ii) Issue a notice of violation to a marijuana licensee alleged to have violated any applicable provision of this chapter, chapter 69.51A RCW, or rules adopted under these chapters.(c) Other than as provided in (b) of this subsection, officers and employees of the board with enforcement authority over licensed marijuana businesses under this chapter may not exercise any law enforcement authority, including but not limited to:(i) Serving or executing any warrant or process of law issued by a court enforcing any penal law of this state relating to the production, processing, transportation, distribution, or sale of marijuana or marijuana products;(ii) Arresting, with or without a warrant, any person or persons found in the act of violating, or in violation of, any of the penal provisions of this chapter or chapter 69.51A RCW;

and(iii) Exercising any other law enforcement power or authority over a marijuana licensee, other than issuing notices of violations as provided in this subsection.(2) Nothing in this section limits or restricts the power, authority, or classification of any officer or employee of the board with respect to enforcement of any provision of:(a) Title 66 RCW or any other state laws relating to liquor for which the board has enforcement authority in law;(b) Chapters 82.24 and 82.26 RCW or any other state laws relating to tobacco or cigarettes for which the board has enforcement authority in law;

or(c) Chapter 70.345 RCW or any other state laws relating to vapor products for which the board has enforcement authority in law.(3) Nothing in this section grants the board any new power or authority with respect to marijuana regulation or enforcement.Sec.

6.

The term "useable marijuana" does not include either marijuana-infused products or marijuana concentrates.(ww) "Board" means the Washington state liquor and cannabis board.NEWboard.--- SECTION.  Sec.END ---

7.

If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2019, in the omnibus appropriations act, this act is null and void.--- END ---