Last updated, January 7, 2019.
When it comes to legalizing cannabis, Washington state is the original success story. In 2012, Washington became the very first U.S. state to legalize the recreational use of cannabis after over a decade of medical legalization. With the passing of Initiative 502, adults over the age of 21 became legally allowed to purchase and possess cannabis products from licensed dispensaries. The state still has an active medical marijuana program as well.
It’s now one of the most mature markets in the country with 488 licensed cannabis retailers throughout the state. Some of the top performing stores are doing more than $1 million in sales per month and, collectively, cannabis retailers produced more than $300 million in excise taxes for the state in 2017.
Cova’s cannabis retail software suite is fully integrated with Leaf Data Systems, making it easier than ever for retailers to receive product and report their inventory data to the state. With Cova, retail owners can automate state reporting, build rapport with customers on sales floor by utilizing Cova’s mobile dispensary POS, monitor all of their locations remotely from anywhere and so much more.
Below, we provide answers to some of the most pressing questions for cannabis retailers in Washington. But as the industry matures and loopholes or problems in the law are identified, many of these rules could change. As such, we will keep this page as updated as possible.
Any adult over 21 years old, whether resident or visitor, with a valid ID can purchase cannabis from a licensed cannabis dispensary in Washington. The state also has a program for medical marijuana patients.
To register on the state’s Medical Marijuana Registry, a patient will need a medical marijuana authorization from a healthcare practitioner. Then they have to meet with a certified medical marijuana consultant at a medically-endorsed dispensary to receive a medical recognition card.
This card allows a patient to purchase three times the daily limit of recreational buyers. They will also be exempt from sales and use taxes.
Yes, the qualifying conditions for medical marijuana in Washington are:
Chronic Renal Failure
Epilepsy and other seizure disorders
Cachexia or Wasting Syndrome
Traumatic brain injury
For adults, these medical recognitions expire every year and for minors, they expire every six months.
No, currently Washington cannabis law does not allow for any homegrown cannabis.
The Washington State Liquor and Cannabis Board (WSLCB) is in charge of all licensing and regulation of the state’s cannabis industry. They are in charge of approving or denying applications and ensuring licensed businesses stay compliant.
There are three main licensing tiers in Washington state: marijuana producer, processor, or retailer. There are also transportation licenses that are very limited in scope.
The state has closed the application process for new retail or producer licenses, but that doesn’t necessarily mean hope is lost. Interested parties can purchase a license from an existing cannabis business. The same application process and fees will apply for the potential new owner and you will likely need an attorney to manage the buying process.
The application fee for all license types is $266 and the cost to renew a license each year is $1,062.
One entity cannot hold all three license types, but they can hold a producer and processor simultaneously. A producer or processor cannot also be a retailer.
A criminal history can prevent you from receiving a license in Washington state. The WSLCB has established a point system for criminal history based on the type of crime, number of crimes and when the crime(s) were committed. Felony charges can be automatically disqualifying.
The state’s law recently changed to allow for some level of out-of-state investment. But before any out-of-state money is accepted into the business, it has to be approved by the WSLCB.
Getting a cannabis retail license is just the first step. Here’s what you need to know to keep a dispensary compliant.
Local governments have the ability to reduce this
Dispensaries in Washington are only allowed to sell flower, concentrates, infused products and paraphernalia. They cannot sell any branded merchandise like t-shirts or hats.
State law allows dispensaries to operate between the hours of 8:00 a.m. to 12:00 a.m., but local governments can amend this.
In a single day, adults 21 and up can purchase up to:
Yes, any medical marijuana patient with a valid medical recognition card is allowed three times the purchase limit that recreational users are permitted.
A dispensary must collect a 37% excise tax plus local retail sales taxes at the time of sale.
Yes, even minute changes to the business have to approved by the WSLCB before they are implemented. That includes anything from a floor plan change, to a location change or even a change in upper management.
Yes, Cova has worked hard to keep our tools up-to-date with the newest traceability system in Washington. The Cova POS can easily record and report all of the information needed for Washington’s monthly retail reports.
First, no advertisements for anything cannabis-related can be attractive to minors (no cartoon characters or public figures appealing to a younger age group) or promote underage or out-of-state consumption. Second, no product can claim any therapeutic or curative effects. Lastly, any cannabis advertisement must include the following government warnings:
"This product has intoxicating effects and may be habit forming.";
"Marijuana can impair concentration, coordination, and judgment. Do not operate a vehicle or machinery under the influence of this drug.";
"There may be health risks associated with consumption of this product."; and
"For use only by adults twenty-one and older. Keep out of the reach of children.”
Each licensed retail location can have two signs at their location with their business name or trade name. These signs cannot be larger than 1,600 square feet (measured from the outer frame). No signs can be on the road pointing in the direction of the dispensary, they can only be affixed or hanging from the building or windows of the actual storefront.
The signs can include the business name, location and identify the nature of the business. It cannot have any photos or depictions of cannabis and it cannot be appealing to minors.
A cannabis dispensary can advertise on billboards with some restrictions. First, the billboard can only contain the same information as signage on the storefront (i.e., name of business, address and nature of business). It cannot contain any photos or depictions of the cannabis plant (this includes any logo with a cannabis leaf) or appeal to minors. No matter the design, the billboard must say that cannabis can only be purchased and possessed by adults over 21 years old.
No, dispensaries cannot give away any product or coupons. They can, however, encourage customers to sign up for an email or text list and offer specials that way.
No, a dispensary is only allowed to sell legal cannabis products and paraphernalia. But branded merchandise for a dispensary can be sold on their website or through a separate entity.
Yes, a dispensary is allowed to advertise in print publications, but with a few restrictions. The publication cannot target or distribute to an audience out of state or underage. And the content of the advertisement must follow the same rules as billboards and signage (no cannabis depictions or photos, cartoon characters or anything appealing to minors and must include government warnings). Local jurisdictions are able to establish additional advertising rules, so always check for relevant local laws.
A retail cannabis business can have a website, but it cannot appeal to or solicit anyone under the age of 21. You can sell branded non-cannabis merchandise on your website, but all cannabis products must be purchased in store.
Yes, a dispensary can host or sponsor an event, but only if attendees are over 21 years old. They cannot have product on hand, neither as a free gift or sold.
Rules and regulations regarding advertising for Washington cannabis companies are constantly changing. You can view the WSLCB’s Q&A on advertising here.
Cova POS software provides complete seed-to-sale tracking functionality and has a number of built-in features designed to help you automatically comply with the legal regulations in your state/province. For example, the Cova POS system automatically monitors:
To ensure that you always maintain an expedient transaction pace and keep lines moving, Cova comes with a built-in offline sales processing mode that enables continuous access to critical functions even when your Wi-Fi or internet connection is unavailable. Once connectivity is restored, all transactions performed in offline mode are synchronized with the state’s reporting system, data is backed up, and reports and inventory records are adjusted accordingly.
By choosing a POS system with built-in tax reporting functionality, you’ll always know exactly how much tax you need to pay.
There are several reasons why a cannabis-specific POS is ideal for your operation—but the most important one is compliance management. Because traditional retail operations and pharmacies don’t have the same government-mandated compliance requirements, their POS systems aren’t built to manage the complexities involved with track and trace reporting and the other aspects of state compliance.
With the industry still in its infancy, regulations are bound to change. At Cova, our team keeps up with industry-wide and state-specific changes so that our developers can quickly made necessary software updates—and so you never have to worry about remaining compliant with the latest regulations.
Absolutely! Cova software is built on technology that has the ability to dynamically scale with your needs. Microsoft’s Cloud Computing Platform, Azure, automatically detects instances of heavy traffic (such as sales on 4/20) and assigns further servers and computing power as necessary to compensate—allowing you to process sales without interruption, even during the busiest retail periods.
Although technically you are not mandated to comply with the new law and regulations until July, it’s a good idea to implement a compliant POS now so you don’t have to switch later.
With Cova, you can easily stay compliant with California’s inventory reconciliation requirement by printing the Inventory-on-hand report and checking it against your physical inventory. You can make any necessary adjustments directly into the POS, which will then sync the data across your network.
Cannabis Business Lawyer & Founding Partner, Segev LLP
Ron Segev is the founding partner of Segev LLP. A practical-minded business lawyer with expertise in the cannabis industry, he represents cultivators, dispensaries, CBD extractors, oil extractors, food processors, media and marketing companies, consultancies, and other businesses in the legal cannabis market.