wa-26-20-110: Liquor and Cannabis Board — WSR 26-20-110

WSR 26-20-110 (26-20)WSR 26-20-110PROPOSED RULESLIQUOR AND CANNABISBOARD[Filed October 7, 2026, 10:19 a.m.]Original Notice.Preproposal statement of inquiry was filed as WSR 25-03-079.Title of Rule and Other Identifying Information: Regulating the placement of alcohol products within retailers that sell alcohol for off-premises consumption. The Washington state liquor and cannabis board (LCB) is proposing to create new WAC 314-02-140 Product placement; and amend WAC 314-29-025 Group 2 regulatory violations.Hearing Location(s): On Thursday, December 3, 2026, at 10:00 a.m. Public hearings related to LCB rule-making activity will be held in a "hybrid" environment. This means that the public will have options for in-person or virtual attendance and for providing verbal comments during public rules hearings. A meeting room will be set up at 1025 Union Avenue, Olympia, WA 98504 for in-person attendance and the public may also log in using a computer or a device, or call in using a phone, to listen to the meeting through the Microsoft Teams application. Please note that although the meeting room will be staffed during the hearing, staff may appear virtually.LCB encourages those who would like to provide public comment to register in advance. Those who have not registered by 10:00 a.m. on the hearing date, or who arrive after the hearing has started, cannot be guaranteed the opportunity to speak.For questions about providing verbal comments at rules public hearing, and to register in advance to provide verbal comments, please email publichearings@lcb.wa.gov.For more information about providing verbal comments at rules public hearing, please visit https://lcb.wa.gov/publichearings.Date of Intended Adoption: No earlier than January 6, 2027.Submit Written Comments to: Daniel Jacobs, Rules and Policy Coordinator, P.O. Box 48030, Olympia, WA 98504-3080, email rules@lcb.wa.gov, fax 360-704-5027, beginning October 7, 2026, 12:00 p.m., by December 4, 2026, 11:59 p.m.Assistance for Persons with Disabilities: Contact Jonnita Thompson, ADA coordinator, human resources, phone 360-974-9591, fax 360-664-9689, TTY 711 or 1-800-833-6388, email jonnita.thompson@lcb.wa.gov, by November 25, 2026.Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of these proposed rules is to reduce product confusion, theft, and youth exposure.Reducing Product Confusion: Product confusion refers to consumers selecting alcohol products for purchase without realizing these products contain alcohol. This can occur regarding crossover products, which are alcohol products that contain the same branding as nonalcohol products, such as Hard Mountain Dew, AriZona Hard, SunnyD Vodka Seltzer, and Simply Spiked Hard. Many of these products deliberately appear similar to commonly known nonalcoholic products in efforts to engender brand loyalty/familiarity. While branding decisions by private companies and licensees are within their rights, it is also within LCB's purview to regulate those products within the general rule-making authority.Reducing Theft: While licensees have declined thus far to provide LCB with shrink rates when asked as part of this rule making, there have been longstanding concerns brought to staff by members of the public health and prevention community regarding alcohol theft, particularly by minors. Many retailers do not pursue theft due to corporate policies, nor report theft to local authorities for a variety of reasons. Individual mini-bottles (bottles of alcohol containing 50 mL or less) pose a particular risk of theft.Youth Exposure: While youth alcohol use has generally declined statewide over the last 15 years, any amount of alcohol use by youth poses risks for their safety, brain development, and mental health. Preventing youth alcohol use by preventing access remains one of LCB's primary objectives. Factors like marketing, product availability, and product density can influence perception that a product is easy to access, and that perception can influence youth alcohol use.The anticipated effects of the rule are as follows:Crossover Products: As described in the rule language, and recognized by industry guidelines, crossover products pose a unique risk of product confusion and ensuring that these products are not confused for their nonalcoholic counterparts is one of the primary goals of this rule making.Adjacent Placement to Items of Appeal to Youth: During the stakeholder engagements and in conversations with LCB staff, industry representatives agreed that liquor should not be placed next to toys, candy, and food that is appealing to youth. Products such as toys, fruit juice, soda, and candy with cartoons and other images are prohibited from being adjacent to crossover products in several other states.Age Controlled Stores: Recognizing that some liquor retailers deliberately market only to adults, in contrast to grocery stores and other retailers, many states exempt the former from product placement regulations. Earlier iterations of the rule language did not contemplate a similar provision, but after hearing stakeholder feedback that such retailers should not be subject to the same regulations as stores that sell products for children, LCB added similar language that is currently in the proposed rule.However, the proposed amended penalty language in WAC 314-29-025 contemplates more severe penalties for a retailer that falsely claims that it is an age controlled store than for retailers who do not comply with the product placement requirements.Mini-bottles: Mini-bottles pose a unique theft risk due to their size, and many retailers choose to secure all spirits and other items deemed to be high theft risk, such as razor blades and baby formula.Signage: The proposed rule language utilizes signage to a greater degree than earlier iterations of the rule language. Like other required signage, the signage will be provided by LCB and made available to licensees.Delayed Effective Date: Assuming that the final rule language is approved in January 2027, LCB will specify in the CR-103[P] filing that the rule language will not be effective until July 2027, to allow licensees to make any layout adjustments they may need, and to allow LCB staff to create the required signage and incorporate training for appropriate staff.Reasons Supporting Proposal: Following is a table explaining the provisions of proposed new WAC 314-02-140 and the reasons supporting each part of the rule language:WAC 314-02-140 Product placement (RDS-6195.9)SectionTextReason(1)Definitions (1)(a)"Crossover product" means alcohol products containing the same or similar brand name, logo, or packaging as a nonalcoholic beverage. Use of a retailer's private label brand is not sufficient by itself for an alcohol product to be considered a crossover product.Defining products that contain alcohol but have the same branding etc., as well-known nonalcoholic brands, such as Hard Mountain Dew, AriZona Hard, SunnyD Vodka Seltzer, and Simply Spiked Hard.The private label brand language is meant to clarify that, for example, Kirkland Signature Vodka does not become a crossover product simply because there is also Kirkland Signature Seltzer.(1)(b)"End-cap" means a display for products placed at either end of an aisle.Defining a term not previously identified in Title 314 WAC.(1)(c)"Mini-bottle" means a container of alcohol with 50 mL or less of fluid.Defining mini-bottles within the common industry standard of 50 mL.(1)(d)"Minor" means a person under the age of 21.Minors for purposes of purchasing alcohol, meaning under 21.(1)(e)"Nonalcoholic alternative beverages" means beverages that have less than one-half of one percent of alcohol by volume that are marketed to adults as alcohol beverage substitutes for beer, wine, and spirits including, but not limited to, products marketed as near beer; low or nonalcoholic beer, seltzers, or wine; nonalcoholic cocktails (sometimes called mocktails or virgin cocktails); or other products marketed as alcohol substitutes.Nonalcoholic beer, nonalcoholic wine, and nonalcoholic spirits are growing in popularity, and these products should remain in the same retail location as alcoholic products, and this rule language is meant to address that.(1)(f)"Reasonably secured" means unable to be removed from the licensed premises without staff assistance including, but not limited to, the following: Individual theft prevention devices attached; secured behind the counter; secured in a locked cabinet; or secured in a manner out of reach of shoppers.The idea here is that a product cannot be removed from the premises and consumed without assistance of retail employees, whether because they need to remove it from behind the counter, or remove an anti-theft device. This is commonly done for other high-theft items such as baby formula, and replacement shaving blades, items that are not necessarily age-restricted for purchase.(2)(a)Application. This rule applies to the following liquor license types, except as provided in subsection (b) of this section:Identifying the license types that this rule applies to. These are locations where people can go and purchase alcohol for off-premises consumption.(2)(a)(i)Specialty shops including, but not limited to:(2)(a)(i)(A)Beer/wine specialty shop licensed under RCW 66.24.371; and(2)(a)(i)(B)Combination spirits/beer/wine off-premises specialty shop licensed under RCW 66.24.035;(2)(a)(ii)Grocery stores including, but not limited to:(2)(a)(ii)(A)Grocery store licensed under RCW 66.24.360; and(2)(a)(ii)(B)Combination spirits/beer/wine off-premises grocery store licensed under RCW 66.24.035; and(2)(a)(iii)Spirits retailer licensed under RCW 66.24.630.(2)(b)Age controlled store. This rule does not apply to a licensee who has an established policy of prohibiting unaccompanied minors in the licensee's retail store, provided the licensee meets the following conditions:Retailers that are geared towards selling primarily alcohol do not raise the same concerns about youth appeal, provided the guidelines identified are complied with. Because a licensee is claiming to be subject to an exception to the rule, violations around whether a licensee truly qualifies for this exception are going to be punished to a higher degree out of concern for public safety.(2)(b)(i)There is conspicuous signage stating that unaccompanied minors are not permitted on the premises at the following locations:(2)(b)(i)(A)At every entrance to the premises; and(2)(b)(i)(B)At every point of sale; and(2)(b)(ii)The policy is enforced by store personnel.(3)Specialty shops, grocery stores, and spirits retailers must comply with the following: (3)(a)(i)Liquor products containing one-half of one percent of alcohol by volume or more may not be displayed next to the following items for sale:These are items that are sold by the licensee, not simply placed as decoration on a display unit.(3)(a)(i)(A)Soft drinks;Both these definitions are self-evident.(3)(a)(i)(B)Energy drinks;(3)(a)(i)(C)Candy with youth-oriented cartoons or images;Youth-oriented cartoons are meant to exclude categories of higher-end chocolate that may not have the same degree of youth appeal.(3)(a)(i)(D)Snack food with youth-oriented cartoons or images; andSimilarly to candy, some snacks do not necessarily have the same degree of youth appeal.(3)(a)(i)(E)Toys.There is consensus that alcohol should not be displayed next to toys such as Hot Wheels, LEGOs, Barbies, and other toys that are marketed to children.(3)(a)(ii)Liquor products containing one-half of one percent of alcohol by volume or more may be displayed next to the following: (3)(a)(ii)(A)Nonalcoholic alternative beverages;See definition above.(3)(a)(ii)(B)Bottled water; andFrom a policy perspective, encouraging consumption of water while drinking alcohol is a desirable objective, and does not reflect any of the main policy goals of this rule making.(3)(a)(ii)(C)Nonliquor products commonly known as mixers including, but not limited to, tonic water, club soda, grenadine, ginger ale, ginger beer, tomato juice, lemon or lime juice, and pina colada mix.This list is nonexhaustive, and is meant to address items typically sold next to alcohol, to assist in making cocktails, etc.(3)(a)(iii)The following liquor products containing one-half of one percent of alcohol by volume or more are not subject to the restriction above in (a)(i) of this subsection: (3)(a)(iii)(A)Products commonly known as mixers for spirituous liquor;These are products that are commonly sold adjacent to liquor and historically have been, and placing them in a different aisle would create more confusion and detract from the goals of concentrating alcohol product placement.(3)(a)(iii)(B)Bitters; and(3)(a)(iii)(C)Cooking wine.(3)(b)Crossover products shall not be displayed adjacent to their nonalcoholic counterpart;This is consistent with requirements in several other states, such as Colorado, Illinois, Missouri, Nebraska, and Pennsylvania, as well as distributor industry guidelines.(3)(c)Crossover products shall not be displayed on end-caps or free-standing displays, unless either:This requirement has been modified over the course of the rule making from an outright prohibition on end-cap placement to allowing a clear sign identifying the product as alcoholic to reduce the likelihood of product confusion while allowing licensees to still place products within permissible limits to maximize revenue.(3)(c)(i)The aisle or broader area of the retailer is dedicated to the sale of alcohol; or(3)(c)(ii)A sign is placed on the end-cap or free-standing display that reads "THESE PRODUCTS CONTAIN ALCOHOL AND ARE ONLY AVAILABLE FOR SALE TO PEOPLE 21 YEARS OF AGE AND OVER."(3)(d)(i)Mini-bottles shall be reasonably secured if they are displayed in open, unorganized displays including, but not limited to, bins, baskets, boxes, and tubs.This requirement reflects the policy goal of reducing the likelihood of theft by requiring more robust inventory control.(3)(d)(ii)The requirement in (d)(i) of this subsection does not apply to multi-pack units of mini-bottles.These items do not pose the same theft risk as individual mini-bottles.(4)Specialty shops, grocery stores, and spirits retailers with premises under 5,000 square feet must comply with the following:Different rules for physically smaller retailers reflect the agency's desire to assist small business and allow greater flexibility while still accomplishing the policy goals of this rule making. Both Illinois and Nebraska also provide greater flexibility to smaller retailers but identify smaller retailers as less than 2,500 square feet.(4)(a)The requirements in subsection (3)(b), (c), and (d) of this section;(4)(b)(i)Liquor products containing one-half of one percent of alcohol by volume or more will be physically separated from the items listed in subsection (3)(a)(i) of this section;(4)(b)(ii)A licensee may comply with (b)(i) of this subsection if liquor is in the same display unit as the items in subsection (3)(a)(i) of this section if a sign is placed in a conspicuous place that reads "THESE PRODUCTS CONTAIN ALCOHOL AND ARE ONLY AVAILABLE FOR SALE TO PEOPLE 21 YEARS OF AGE AND OVER."(5)(a)Penalties. Violations of this rule are subject to penalties identified in WAC 314-29-025.See proposed changes to WAC 314-29-025.(5)(b)Violations of the age controlled store provisions in subsection (2)(b) of this section are subject to the age controlled store product placement penalties identified in WAC 314-29-025.(6)For signs required in this rule, the licensee must use the signs provided by board staff and available at www.lcb.wa.gov. The licensee is permitted to use additional signs with the same required message written in other languages at the licensee's discretion. Any additional signs must be in addition to the required signs provided by board staff and available at www.lcb.wa.gov.LCB will create and provide the signs to licensees at no cost, and will be available along with the other currently required signs already available.Recognizing that licensees serve a wide variety of communities, the rule allows for licensees to create signs in different languages at their own discretion, so long as the agency-provided sign is also posted.Below is the table identifying the proposed new rows of the penalty table at WAC 314-29-025:WAC 314-29-025 Group 2 regulatory violationsNew rows for penaltiesViolation Type1st Violation2rd Violation in a two-year window3rd Violation in a two-year window4th Violation in a two-year windowFailure to comply with age controlled store requirements.WAC 314-02-140 (2)(b)5-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseProduct Placement:Failure to comply with alcohol product placement and related signage.WAC 314-02-1405-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionStatutory Authority for Adoption: RCW 66.08.030, 66.24.630, 66.28.350, and 66.98.070.Rule is not necessitated by federal law, federal or state court decision.Name of Proponent: LCB, governmental.Name of Agency Personnel Responsible for Drafting: Daniel Jacobs, Rules and Policy Coordinator, 1025 Union Avenue, Olympia, WA 98504, 360-480-1238; Implementation: Becky Smith, Director of Licensing, 1025 Union Avenue, Olympia, WA 98504, 360-664-1753; and Enforcement: Lawrence Grant, Director of Enforcement and Education, 1025 Union Avenue, Olympia, WA 98504, 360-974-9567.A school district fiscal impact statement is not required under RCW 28A.305.135.A cost-benefit analysis (CBA) is not required under RCW 34.05.32. The proposed amended rules do not qualify as a type of rule requiring a CBA under RCW 34.05.328(5). LCB is not a listed agency under RCW 34.05.328 (5)(a)(i), so the CBA requirements in RCW 34.05.328 are not applicable to the proposed rules unless voluntarily applied or made applicable by the joint administrative rules review committee under RCW 34.05.328 (5)(a)(ii). However, LCB contracted to have a CBA done on the rule making in response to stakeholder feedback, and that cost-benefit analysis can be found at https://lcb.wa.gov/sites/default/files/2026-09/Bafada-Prelim-CBA.pdf.Scope of exemption for rule proposal from Regulatory Fairness Act requirements:Is not exempt.The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. LCB contracted with an economist to determine these figures and hyperlinks to both the CBA and the preliminary small business economic impact statement (SBEIS) memorandum are included below.Preliminary CBA: https://lcb.wa.gov/sites/default/files/2026-09/Bafada-Prelim-CBA.pdfSBEIS Memorandum: https://lcb.wa.gov/sites/default/files/2026-09/Bafada-Prelim-SBEIS.pdfThis analysis is copied from the work of the contracted economist:The proposed rule applies to retail liquor licensee establishments that sell alcohol for off-premises consumption. The three license types that are subject to this rule are: (1) Specialty shops licensed under RCW 66.24.371 and 66.24.035; (2) grocery stores licensed under RCW 66.24.360 and 66.24.035; and (3) spirits retailers licensed under RCW 66.24.630. Distributors and wholesalers supplied survey data for the companion CBA but are not required to comply with the rule's placement requirements, so distribution industries are not identified as impacted industries under this chapter.RCW 19.85.020(1) defines an industry as all of the businesses in the state in one four-digit classification. The licensees subject to this rule fall within two four-digit industries. Grocery-licensed premises are operated by supermarkets and by convenience retailers, and both belong to North American Industry Classification System (NAICS) 4451, Grocery and Convenience Retailers. Specialty shops licensed under RCW 66.24.371 and 66.24.035 and former contract and state liquor stores licensed under RCW 66.24.630 belong to NAICS 4453, Beer, Wine, and Liquor Retailers, which contains the single six-digit industry 445320. Some grocery-licensed premises may be operated by firms classified outside these industries, such as gasoline stations with convenience stores or pharmacies; the licensing data does not identify the operator's industry, so those premises are analyzed within NAICS 4451. Business counts, revenue, and payroll for each industry are drawn from the United States (U.S.) Census Bureau's Statistics of U.S. Businesses, which counts employer firms, the population that operates licensed premises.The number of impacted businesses was determined as follows: The small business test applies to businesses rather than establishments, so the analysis first converts premises to business entities. Dividing licensed premises by the number of businesses in each industry gives an average of 2.79 premises per business in NAICS 4451 and 7.15 in NAICS 4453. Applying those averages to the adjusted premises, after removing age controlled stores, results in 1,709 businesses required to comply; 1,534 in NAICS 4451, or 89 percent of that industry; and 175 in NAICS 4453, or 81 percent of that industry. The conversion assumes premises per business is uniform within each industry.[Table 1. Summary of Businesses Required to Comply]NAICSIndustry DescriptionBusinesses in WashingtonLicensed PremisesAverage Premises Per BusinessImpacted (Required to Comply)Minor Cost Threshold, 0.3% of Annual RevenueMinor cost Threshold, 1% of Annual Payroll4451Grocery and Convenience Retailers1,7314,8302.791,534 (89%)$37,311$13,0924453Beer, Wine, and Liquor Retailers2171,5527.15175 (81%)$9,147$2,872The rule's compliance requirements generate five one-time cost components and two ongoing components, outlined below.The cost of subsection (3)(a), prohibited adjacency, is estimated from the number of large stores with a current adjacency gap and the time needed to move existing product. Survey responses put that population at 451 to 949 stores and one-time rearrangement time at 20.2 to 84.8 hours per store, valued at the blended rearrangement wage of $30.81 per hour. The result is a one-time labor cost of $281,262 to $2.48 million.The cost of subsection (3)(b), crossover product adjacency, is estimated only for stores that display crossover products but are not already captured under the subsection (3)(a) rearrangement cost, so the same work is not counted twice. Survey responses put that population at 99 to 945 stores and one-time separation time at one to 11 hours per store, valued at the blended wage of $30.81 per hour. The result is a one-time labor cost of $3,050 to $320,270.The cost of subsection (3)(c), crossover products on end-caps and free-standing displays, is estimated from stores displaying crossover products on an end-cap or free-standing display, using the signage option that survey respondents preferred over relocating product. Signs are supplied by LCB at no cost, so the only expense is installation time, estimated at three to five minutes per store and valued at the floor-staff wage of $27.91 per hour. The result is a one-time labor cost of $49 to $1,230.The cost of subsection (3)(d), mini-bottle open display security, is estimated from stores currently displaying mini-bottles in open, unsecured containers, using survey data on mini-bottle sales volume and the retrieval time added once bottles are moved behind the counter. Retrieval time is estimated at five seconds to 3.3 minutes per transaction, applied to 50 to 4,000 mini-bottle sales per month and valued at the floor-staff wage. Because this is a recurring task rather than a one-time change, the result is an ongoing annual cost of $9,676 to $366,181.The cost of subsection (4)(b), small store compliance, is estimated from small stores with a current adjacency gap, split between the two compliance paths survey respondents reported: Physical separation, taking two to 30 hours per store at the blended wage, and signage, estimated at $0.79 to $160.48 per store at the floor-staff wage. Combining both paths across the affected population produces a one-time labor cost of $11,717 to $778,850.Informing staff and ongoing monitoring are not required by any single provision of the rule, and the rule does not prescribe a particular training or monitoring protocol. WAC 314-02-140 does not itself impose either activity, but both are necessary to achieve and maintain compliance with the placement standards created by subsections (3) and (4) as a whole. For cost-estimation purposes, the analysis assumes that a prudent retailer would incur one-time staff communication and incremental placement checks to meet that standard; these assumptions are not independent regulatory requirements. They are assessed here as second-order compliance costs.The cost of informing staff, needed to implement subsections (3) and (4), is estimated from the time needed to brief two managers and three to six floor staff per store, depending on store size, on the new requirements. Instruction time ranges from 10 minutes to one hour per person, depending on role and store size, valued at the manager and floor-staff wage rates. Applied to the 1,686 to 3,837 stores with a compliance gap, the result is a one-time cost of $72,022 to $379,630.The cost of ongoing monitoring, needed to maintain compliance with subsections (3) and (4), is estimated from the weekly time stores would spend checking that alcohol remains correctly placed, set by LCB technical staff at 1.50 to 2.50 hours per week for large stores and 1.0 to 1.5 hours per week for small stores. Because this checking substitutes for shelf checks stores already perform, only 25 percent of that time is treated as new labor attributable to the rule, and the new labor estimate is further reduced to 25 percent of its year one level in years two through 10 as the task becomes routine. Annualized over the 10-year period, the result is an ongoing cost of $290,885 to $1.01 million.These cost components are combined into the direct and indirect cost categories below and annualized in Table 2, over the 10-year analysis period at a seven percent real discount rate, so that one-time and recurring costs are expressed on a common basis. Low, central, and high estimates reflect 90 percent confidence intervals on surveyed quantities and the bounds of staff-estimated monitoring time.Table 2 separates these into one direct and two indirect categories. Labor is the direct cost of the placement changes described above. Staff instruction and ongoing monitoring are indirect costs, necessary to achieve and maintain compliance though not directly required by the rule, and monitoring remains the largest of the three categories.Four cost categories were assessed and found to impose no cost, and are therefore not carried in the table below: Consumable supplies; professional services, because all compliance tasks can be performed by existing store staff; reporting; and recordkeeping.The base estimate assumes that affected retailers can use existing counters, cabinets, shelving, or security practices to reasonably secure mini-bottles, and that LCB-provided signs eliminate a sign-purchase cost under subsection (6). This is supported by survey data: No respondent indicated that locked display cabinets or electronic anti-theft devices would be used, and the companion CBA reports a single outlier response of a 100-hour store renovation, excluded from the central estimate as an unrepresentative single observation. As a sensitivity check, that observation is used here to estimate a worst-case per-store buildout cost, valued at the blended rearrangement wage of $30.81 per hour, or $3,081 per store. Annualized and allocated per business, this adds approximately $1,224 to the high estimate in NAICS 4451 and $3,136 in NAICS 4453. Both remain below their respective thresholds; the margin in NAICS 4453 narrows from $5,980 to $2,844, but does not close.Table 2. Total Probable CostsCost CategoryDescriptionLowCentralHighLaborDisplay rearrangement, crossover separation, sign installation, small store separation or signage, and mini-bottle retrieval time.$51,830$163,260$875,800Staff instructionStaff instruction on the placement requirements, managers and floor staff, amortized.$10,254$27,751$54,051Ongoing monitoringOngoing placement monitoring above current practice.$290,885$598,990$1,006,565Total annualized cost$352,969$790,001$1,936,416RCW 19.85.020(1) defines an industry at the four-digit NAICS level, so costs are allocated between NAICS 4451 and NAICS 4453 rather than by license type or six-digit classification. Total aggregate costs are allocated to their respective industries. Based on the licensees impacted and the probable costs incurred, costs are estimated to be distributed between NAICS 4451 and NAICS 4453 at 81.1 percent and 18.9 percent (at the central estimates) respectively (see Table 3).Table 3. Summary of Total CostsNAICSLowCentralHighNAICS 4451, Grocery and Convenience Retailers$292,383$640,899$1,569,041NAICS 4453, Beer, Wine, and Liquor Retailers$60,586$149,102$367,375Total$352,969$790,001$1,936,416The total annualized cost is therefore $352,969 to $1.94 million, with a central estimate of $790,001. Ongoing placement monitoring accounts for $290,885 to $1.01 million of that total (central $598,990), or roughly 76 percent of the annualized cost at the central estimate and between 52 and 82 percent across the range.Under RCW 19.85.020(2), a cost is minor if it is less than at least one applicable statutory benchmark. Therefore, a cost is more than minor only if it equals or exceeds each applicable benchmark. The analysis reports estimated cost per affected business and compares that estimate with each statutory measure: Three-tenths of one percent of annual revenue or income, subject to the $100 floor, and one percent of annual payroll.Both measures are computed for each industry: The greater of three-tenths of one percent of annual revenue or $100, and one percent of annual payroll. Per-business cost is compared against the larger of the two measures, which is the binding threshold. Annual revenue is measured by receipts per employer firm and annual payroll by payroll per employer firm, both from the Statistics of U.S. Businesses. For NAICS 4451, the binding threshold is the revenue measure, $37,311; for NAICS 4453, it is also the revenue measure, $9,147. Per-business cost is measured as the total probable annualized cost of the rule allocated to each industry, divided by the number of businesses that will incur compliance cost. These are businesses with a compliance gap. Section 2 counts 1,709 businesses required to comply with the rule. Most of those already meet the placement standards and incur no cost, so the number with a gap is smaller.The companion CBA identifies 1,686 such premises at the low estimate, 2,753 at the central, and 3,837 at the high. Gap premises are allocated to industry by license type and converted to business counts at each industry's average licensed premises per business from Table 1, giving 487 businesses at the low estimate, 781 at the central, and 1,078 at the high in NAICS 4451; and 46, 80, and 116 in NAICS 4453. Each estimate divides that estimate's cost by that estimate's population, so cost and population move together, and the per-business range is narrower than the aggregate range.As analyzed above, the total probable cost of compliance with the proposed rule is estimated to be $292,383 to $1.57 million for NAICS 4451, and $60,586 to $367,375 for NAICS 4453. Based on these cost ranges and the businesses incurring cost in each industry, the average per-business cost of the proposed rule is in the range of $600 to $1,455 for NAICS 4451, and $1,330 to $3,167 for NAICS 4453. Comparing the per-business cost to both minor cost measures for each industry shows that businesses in both industries fall below the binding threshold at every estimate (see Table 4). The high estimate reaches 35 percent of the binding threshold in NAICS 4453 and four percent in NAICS 4451.Table 4. Average Per-Business Cost vs. Minor Cost Thresholds by IndustryIndustryPer-business Cost, Low to High (Central)0.3% of Annual Revenue$100 Floor1% of Annual PayrollBinding Threshold (Largest)Exceeds Thresholds?NAICS 4451, grocery and convenience retailers$600 to $1,455 ($820)$37,311$100$13,092$37,311NoNAICS 4453, beer, wine, and liquor retailers$1,330 to $3,167 ($1,868)$9,147$100$2,872$9,147NoRCW 19.85.030 (1)(a) requires an SBEIS where a proposed rule will impose more-than-minor costs on businesses in an industry. As the results in Table 4 reveal, the proposed rule does not impose more-than-minor costs on businesses in either industry, at any estimate. The recommended finding is that an SBEIS is not required under RCW 19.85.030 (1)(a).A copy of the detailed cost calculations may be obtained by contacting Daniel Jacobs, 1025 Union Avenue, Olympia, WA 98504, phone 360-480-1238, email rules@lcb.wa.gov, SBEIS memorandum at https://lcb.wa.gov/sites/default/files/2026-09/Bafada-Prelim-SBEIS.pdf, preliminary CBA at https://lcb.wa.gov/sites/default/files/2026-09/Bafada-Prelim-CBA.pdf.October 7, 2026Jim VollendroffChairRDS-6195.9NEW SECTIONWAC 314-02-140Product placement.(1) Definitions. The following definitions apply in this rule:(a) "Crossover product" means alcohol products containing the same or similar brand name, logo, or packaging as a nonalcoholic beverage. Use of a retailer's private label brand is not sufficient by itself for an alcohol product to be considered a crossover product.(b) "End-cap" means a display for products placed at either end of an aisle.(c) "Mini-bottle" means a container of alcohol with 50 ml or less of fluid.(d) "Minor" means a person under the age of 21.(e) "Nonalcoholic alternative beverages" means beverages that have less than one-half of one percent of alcohol by volume that are marketed to adults as alcohol beverage substitutes for beer, wine, and spirits including, but not limited to, products marketed as near beer; low or nonalcoholic beer, seltzers, or wine; nonalcoholic cocktails (sometimes called mocktails or virgin cocktails); or other products marketed as alcohol substitutes.(f) "Reasonably secured" means unable to be removed from the licensed premises without staff assistance including, but not limited to, the following: Individual theft prevention devices attached; secured behind the counter; secured in a locked cabinet; or secured in a manner out of reach of shoppers.(2)(a) Application. This rule applies to the following liquor license types, except as provided in subsection (b) of this section:(i) Specialty shops including, but not limited to:(A) Beer/wine specialty shop licensed under RCW 66.24.371; and(B) Combination spirits/beer/wine off-premises specialty shop licensed under RCW 66.24.035;(ii) Grocery stores including, but not limited to:(A) Grocery store licensed under RCW 66.24.360; and(B) Combination spirits/beer/wine off-premises grocery store licensed under RCW 66.24.035; and(iii) Spirits retailer licensed under RCW 66.24.630.(b) Age controlled store. This rule does not apply to a licensee who has an established policy of prohibiting unaccompanied minors in the licensee's retail store, provided the licensee meets the following conditions:(i) There is conspicuous signage stating that unaccompanied minors are not permitted on the premises at the following locations:(A) At every entrance to the premises; and(B) At every point of sale; and(ii) The policy is enforced by store personnel.(3) Specialty shops, grocery stores, and spirits retailers must comply with the following:(a)(i) Liquor products containing one-half of one percent of alcohol by volume or more may not be displayed next to the following items for sale:(A) Soft drinks;(B) Energy drinks;(C) Candy with youth-oriented cartoons or images;(D) Snack food with youth-oriented cartoons or images; and(E) Toys.(ii) Liquor products containing one-half of one percent of alcohol by volume or more may be displayed next to the following:(A) Nonalcoholic alternative beverages;(B) Bottled water; and(C) Nonliquor products commonly known as mixers including, but not limited to, tonic water, club soda, grenadine, ginger ale, ginger beer, tomato juice, lemon or lime juice, and pina colada mix.(iii) The following liquor products containing one-half of one percent of alcohol by volume or more are not subject to the restriction above in (a)(i) of this subsection:(A) Products commonly known as mixers for spirituous liquor;(B) Bitters; and(C) Cooking wine.(b) Crossover products shall not be displayed adjacent to their nonalcoholic counterpart;(c) Crossover products shall not be displayed on end-caps or free-standing displays, unless either:(i) The aisle or broader area of the retailer is dedicated to the sale of alcohol; or(ii) A sign is placed on the end-cap or free-standing display that reads "THESE PRODUCTS CONTAIN ALCOHOL AND ARE ONLY AVAILABLE FOR SALE TO PEOPLE 21 YEARS OF AGE AND OVER."(d)(i) Mini-bottles shall be reasonably secured if they are displayed in open, unorganized displays including, but not limited to, bins, baskets, boxes, and tubs.(ii) The requirement in (d)(i) of this subsection does not apply to multi-pack units of mini-bottles.(4) Specialty shops, grocery stores, and spirits retailers with premises under 5,000 square feet must comply with the following:(a) The requirements in subsection (3)(b), (c), and (d) of this section;(b)(i) Liquor products containing one-half of one percent of alcohol by volume or more will be physically separated from the items listed in subsection (3)(a)(i) of this section;(ii) A licensee may comply with (b)(i) of this subsection if liquor is in the same display unit as the items in subsection (3)(a)(i) of this section if a sign is placed in a conspicuous place that reads "THESE PRODUCTS CONTAIN ALCOHOL AND ARE ONLY AVAILABLE FOR SALE TO PEOPLE 21 YEARS OF AGE AND OVER."(5)(a) Penalties. Violations of this rule are subject to penalties identified in WAC 314-29-025.(b) Violations of the age controlled store provisions in subsection (2)(b) of this section are subject to the age controlled store product placement penalties identified in WAC 314-29-025.(6) For signs required in this rule, the licensee must use the signs provided by board staff and available at www.lcb.wa.gov. The licensee is permitted to use additional signs with the same required message written in other languages at the licensee's discretion. Any additional signs must be in addition to the required signs provided by board staff and available at www.lcb.wa.gov.Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.RDS-7405.2AMENDATORY SECTION(Amending WSR 26-02-076, filed 1/7/26, effective 2/7/26)WAC 314-29-025Group 2 regulatory violations.Group 2 violations are violations involving general regulation and administration of retail or nonretail licenses.Violation Type1st Violation2nd Violation in atwo-year window3rd Violation in atwo-year window4th Violation in atwo-year windowClub liquor to the public.WAC 314-40-0105-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseEmployee under legal age or without required mandatory alcohol server training permit.RCW 66.44.316RCW 66.44.318RCW 66.44.340RCW 66.44.350WAC 314-11-040WAC 314-11-045Chapter 314-17 WAC5-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseFailure to assign MAST trained employee to an expanded alcohol service area.RCW 66.24.800WAC 314-03-210WAC 314-03-211WAC 314-03-2125-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseFailure to comply with age controlled store requirements.WAC 314-02-140 (2)(b)5-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseFailure to follow 11:00 p.m. entertainment rules.WAC 314-02-025(2)5-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseHours of service: Sales, service, removal, or consumption of alcohol between 2:00 a.m. and 6:00 a.m.WAC 314-11-0705-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseKeg registration:Failure to properly register kegs.RCW 66.28.200RCW 66.28.210WAC 314-02-1155-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseSpirituous liquor not sold by the individual drink.RCW 66.24.400WAC 314-02-015 (1)(a)5-day suspension or $500 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseFood service: Required food service not available.WAC 314-02-035WAC 314-02-0411WAC 314-02-065WAC 314-02-0755-day suspension or $250 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseHours of operation:Failure to meet required hours of operation.WAC 314-02-015(2)5-day suspension or $250 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseNSF check: Payment by a retail licensee for alcohol purchases.WAC 314-13-0205-day suspension or $250 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licensePremises not open to the general public while liquor is sold, served, or consumed.WAC 314-11-0725-day suspension or $250 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseSampling and/or cooking class violations.WAC 314-02-1055-day suspension or $250 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseSubstituting, tampering, improper labeling, unlawful removal, possession, or unauthorized sale of liquor.WAC 314-11-065WAC 314-11-080WAC 314-16-0205-day suspension or $250 monetary option5-day suspension or $1,500 monetary option10-day suspension or $3,000 monetary optionCancellation of licenseAdvertising:Advertising violations other than those involving prohibited practices between a nonretail and a retail licensee.Chapter 314-52 WAC.5-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionProduct placement:Failure to comply with alcohol product placement and related signage.WAC 314-02-1405-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionHotel/motel honor bar violation.WAC 314-02-0805-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionInventory: Inventory below required amount.WAC 314-02-100WAC 314-02-1055-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionLighting: Inadequate lighting.WAC 314-11-0555-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionLiquor purchased from unauthorized source or sale below cost in violation of liquor law or rule.WAC 314-11-085WAC 314-13-010WAC 314-13-0405-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionPrivate club violations: Club regulations other than club liquor to the public.Chapter 314-40 WAC5-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspension Records: Improper recordkeeping.WAC 314-11-090WAC 314-11-095WAC 314-12-1355-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionRetailer/nonretailer violation: Violation on the part of a retail licensee that involves a nonretail licensee, other than group four violations. 5-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionSigns: Failure to post required signs.WAC 314-11-0605-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspensionUnauthorized alterations, change of trade name, or added activity.WAC 314-02-025WAC 314-02-125WAC 314-02-1305-day suspension or $100 monetary option5-day suspension or $500 monetary option10-day suspension or $1,000 monetary option20-day suspension