Download Senate Health Care Committee Report on HR 3 Below is the Bill, HR

Senate Health Care Committee Report on HR 3
Below is the Bill, HR 3, in consideration. Amendments to HR 3 as introduced proposed by the
Health Care Committee are in Bold.
An act for the purpose of the establishment of guidelines for the regulation of Marijuana
distribution and production, the taxation and allocation of resulting revenue from Marijuana
sales, classifying actions that shall be referred to as Marijuana growth for personal use, and
sanctions against those that do not follow these established laws.
Section 1. Certification Guidelines for Marijuana distribution and production.
Medicinal and Recreational marijuana distributors will henceforth be merged into one
entity. Recreational marijuana distributors will be allowed the option to apply for an
medical endorsement that would permit stores to sell to customers who posses a valid
patient recognition card and in turn require the store to carry products deemed
appropriate for medical use. The distribution of these optional endorsements will be
monitored by the liquor control board.
I. Marijuana may legally be distributed within the State of Washington, if the entity distributing,
henceforth referred to as distributor, falls within one of the two certified categories of
distribution: recreational or medicinal.
A) A distributor will be able to sell Marijuana and Marijuana-derived products for recreational
use as a Recreational Distributor, if it will meet the following criteria:
i) Distributor has obtained certification from the Washington State Liquor Control Board
(WSLCB) based off of the mandates required by WSLCB.
ii) License hasn’t been
revoked within the past 2 years by the WSLCB.
B) A distributor will be able to sell Marijuana and Marijuana-derived products for recreational
use as a Medicinal Distributor, if it will meet the following criteria:
i) Obtained certification from the Washington State Liquor Control Board (WSLCB)
based off of the mandates required by WSLCB.
ii) License hasn’t been revoked within the past 3 years by the WSLCB.
iii)for Medicinal Distributor certification a distributor will be required to prove that all
sales for Medicinal purposes are made exclusively to individuals holding Medicinal
Marijuana Green Cards.
II. Medicinal Distributors who have previously been distributing Marijuana for Medicinal
purposes, as defined by the WSLCB, will have 2 years as of the passing of this bill to comply
with the new regulation and guidelines as established by the legislature and the WSLCB to
receive certification to be a Medicinal Distributor. During these 2 years they will have the same
taxation guidelines and green card benefits as other newly established Medicinal Distributors
III. Recreational Distributors are not allowed to sell Marijuana for Medicinal purposes unless
they also have Medicinal Distributor certification from the WSLCB, in which case, it is required
to sell Medicinal Marijuana only to those with a valid Medicinal Marijuana Green Card.
Medicinal Distributors are not allowed to sell Marijuana for Recreational use, unless they also
have Recreational Distributor appropriate certification from the WSLCB.
IV. Marijuana producers and growers, henceforth known as producers, that supply distributors
will be required to obtain a permit from the WSLCB to engage in such activity. A permit will
cost a minimum of $50,000, to be adjusted to inflation on a yearly basis, and will require a
quarterly audit, at the expense of the producer, from a neutral third party accounting firm to
confirm compliance with state Marijuana sales taxes. A) Producers are required to sell
Marijuana and Marijuana-derived products only to legally certified distributors - Recreational
distributors and/or Medicinal Distributors. Failure to do so will be treated as distribution of
Marijuana without a valid distributors permit and will thus be punishable by a fine and/or
criminal charges.
V. Any intermediaries between producers and the entity that will provide the final Point of Sale
with a customer will be termed to be distributors and thus have to follow the regulations and
guidelines outlined for the two different types of distributors - Medicinal and Recreational.
Section 2. Establishment of Medicinal Marijuana Green Cards
I. The Medicinal Marijuana Green Cards, henceforth known as Green Cards, will be distributed
by healthcare practitioners to individuals who have a medicinal need for Marijuana, as
determined by their healthcare practitioners.
II. A Green Card will allow individuals to purchase Marijuana at the Medicinal Marijuana
Taxation rate of 10% on top of Sales Tax at the Point of Sale. These purchases can only be made
from Medicinal Distributors.
III. A healthcare practitioner will be able to distribute Green Cards if they apply for a Green Card
Distribution Permit from the WSLCB and renew it every 5 years. To obtain a Green Card
Distribution Permit a licensing fee of $10,000 will have to be paid, and the practitioner in
question cannot have had his Green Card Distribution Permit revoked within the last 10 years.
IV. Each Green Card distributed will have a fee, to be established by the WSLCB, that can be
paid either by the healthcare practitioner, patient, or their insurance provider. All proceeds from
the distribution of a Green Card will be distributed in the same manner as the tax revenue from
the sale of Marijuana.
V. Unlawful distribution of Green Cards to individuals without health ailments that necessitate
the use of Medicinal Marijuana shall result in a loss of their Green Card Distribution Permit and
will be treated as a Class C felony.
VI. The state will commission a study to identify a list of physical and mental medical
conditions for which medicinal marijuana may be prescribed, with the goal of making the
qualifications less broad and/or inclusive. The governor will appoint a taskforce of medical
health professionals to complete this study by January, 1 2015.
A) The state will appropriate $20,000 for the remainder of 2014 to commission this study.
Section 3. Taxation of Marijuana distribution and production
A) A 25% excise tax on marijuana will be applied to each level of the system: producer to
processor, processor to retailer, and retailer to consumer.
B) Medicinal marijuana patients will be exempt from the 25% excise tax applied on the
retailer to consumer level.
II. A trust will be established to gather all of the Marijuana sales related revenue, such as tax,
certification fees, and Green Card fees, from which funds will be distributed as follows:
A) Dedicated Marijuana Fund; The Following amounts are to be distributed every three months:
• $1.5 million to the WSLCB (Washington State Liquor Control Board) for
administration and implementation
• $110,000 to the Department of Social and Health Services (DSHS) for the Washington
State Healthy Youth Survey
• $60,000 to the DSHS to contract with the Washington State Institute of Public Policy
for evaluation of the initiative's implementation
• $6,000 to the University of Washington Alcohol and Drug Abuse Institute for public
education materials regarding the health and safety risks of marijuana
B) The remaining funds are to be distributed accordingly:
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·
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Higher Education – 25%
K-12 Education – 25%
General Fund – 20%
Enforcement – 10%
Health Care – 20%
Section 4. Marijuana growth for personal use.
I. Marijuana growth for personal use is permitted under the following clarifications.
A) An individual is exempt from the required Marijuana certification and taxation if they grow 5
or less plants a year per household.
B) If an individual is determined to be growing and distributing an amount above these quantity
limits, then they will face a $10,000 for the first offense. A second offense will elicit a $50,000
and/or a gross misdemeanor to be charged. Any offenses afterwards will be counted as Class C
felonies.
Summary/ Report
1. Purpose and Summary of the Legislation
The Purpose of this bill, Distribution and Growth of Marijuana Act (with proposed amendments
2. Background and Need for Legislation
In light of the recent passage for the legalization of the growth and usage of recreational
marijuana, action needs to be taken to not only regulate but also to align with the previous
legislature that legalized the use of medical marijuana. Action needs to be taken immediately to
avoid federal involvement and to appease Washington state citizens.
3. Summary of Committee Consideration and Voting
The committee met and discussed various options regarding potential legislation. They decided it
would be best to recommend proposed legislation HR 3, with certain amendments that align with
both the committees’ and the governors ideals, as expressed in the committee hearing this past
week.
As the bill stands, with proposed amendments, the final vote to pass the bill out of the
committee went as follows:
6 Yeas
0 Nays
0 Abstentions
(Sen. Cleveland and Senator Dammeier were not present and therefore not counted in the vote)
4. Minority Views
There were no minority views to report.
5. Report Author
Report prepared by Sen. Becker. Co-authored by Sen. Keiser, Sen. Pederson, Sen. Angel, Sen.
Parlette, Sen. Cleveland, and Sen. Bailey.