Washington cannabis regulators are considering a new certification system that could help cannabis businesses demonstrate their involvement in the state’s medical marijuana market and potentially gain access to federal benefits following the partial rescheduling of cannabis.
The LCB recently voted to begin examining the proposal. The effort follows a petition from The Cannabis Alliance, which argued that businesses need a way to document medical cannabis-related operations under Washington’s existing regulatory structure.
The issue emerged after the LCB stated that Washington marijuana businesses may not qualify for the federal changes since the state does not operate a separate licensing system for retailers, producers, and processors.
Under an April order signed by AG Todd Blanche, cannabis products covered by state medical marijuana licenses were moved from Schedule 1 to Schedule 3 under federal law. The same classification applies to cannabis products approved by the FDA.
Washington cannabis businesses, however, currently lack a formal mechanism to establish that they participate in activities connected to the state’s medical marijuana system. The proposed certification could provide documentation for federal registration and other practical matters, including banking and insurance.
The LCB said the potential rules could establish a program verifying a license holder’s status and detailing its involvement in state-approved medical marijuana activities.
The board’s decision came despite opposition from agency staff and does not mean new rules have been adopted. Regulators stressed that the process is still in its early stages and that no specific regulatory language has been drafted.
Members of the public and industry stakeholders can submit comments on the proposal by Dec. 4. The agency said it could work with the state Health Department and federal agencies, including the DEA, to determine what documentation would be required.
The LCB previously explained that Washington has one cannabis market rather than separate recreational and medical licensing systems. Within that framework, certain businesses can produce products meeting the Health Department standards, while qualifying retailers can sell those products to adult patients and designated providers.
Due to that structure, the agency previously concluded that Washington license holders might not meet the federal definition of a state medical cannabis licensee and therefore could be excluded from the federal registration pathway.
The LCB has not prohibited businesses from seeking federal registration on their own. It said it would be interested in hearing about the outcome of any such applications.
Washington’s review comes as other states respond to the federal policy shift. California regulators, for example, have developed emergency changes to cannabis licensing rules designed to help businesses qualify for benefits associated with the federal rescheduling of medical marijuana.
How federal classification could affect the operations of marijuana firms that register with the DEA is still being watched by numerous companies, including Tilray Brands Inc. (NASDAQ: TLRY) (TSX: TLRY).
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