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Washington LCB rule could put an end to grower and processor events at stores

LCB

By Sue Vorenberg
Cannabis Daily Record

The Washington State Liquor and Cannabis Board has issued a clarification on state marijuana laws that could put a stop to grower and processor events at pot shops throughout the state.

The ruling, issued by Jennifer Dzubay, the agency’s commander, covers financial issues between marijuana producers, processors and retailers and is aimed at preventing preferential treatment.

One of the examples of prohibited activities listed in the document is “processors promoting their product on the premises of a retailer.”

That may mean that growers and processors can no longer go to pot shops to promote their products.

Another part of the ruling indicates that growers and processors can no longer give out shirts or other items to store employees.

Both are common practices in the industry. Store employees frequently wear shirts from growers or processors that they stock to help promote product.

And both practices are common in the liquor industry.

Cannabis Daily Record called Mikhail Carpenter, a spokesman for the LCB, for clarification on Monday, Jan. 11. He said he is checking into the matter.

This story will be updated with his response.

(Minor Update: Carpenter asked me to email him asking for clarification on Jan 11, 2016 so he could pass it along to the higher ups – I’m still waiting for the response to the email. – Sue)

(Second Update: I’ve left a few phone messages and sent another email and still have no response as of Jan 13, 2016 at about noon.)

(Third Update: I’m an idiot and sent the emails to the wrong address. Finally got call back at around 4 p.m. on Jan 13, 2016, and we fixed the issue. Mikhail Carpenter got my emails and said he forwarded them, so hopefully we’ll hear back from the higher ups at LCB soon. Carpenter said the practices had been banned in the alcohol industry too, but that industry lobbied to get them back. “If the (marijuana) industry lobbied they could probably get similar exemptions,” he said. -Sue)

Below is the release:


Bulletin No 15-02
Date: January 8, 2016
To: Industry Members
From: Jennifer Dzubay, Commander
Subject: Direct and In-Direct Money’s Worth

We have discovered several issues involving financial agreements in regards to money and money’s worth issues between a marijuana producer or processor and a marijuana retailer. This bulletin is to clarify that under no circumstance shall a producer or processor (non-retailer) give or lend money, items or services to a retailer. This act may be perceived as undue influence or obtaining preferential treatment over another producer or processor. The restriction of money’s worth is intended to prohibit actions which influence or attempt to influence the purchasing practices of the retailer with respect to marijuana product.

Direct Money’s Worth
Direct money’s worth involves a producer or processor giving tangible items such as money or gifts to a licensee. This would include loans of money or gifts or services, Check This Out for more information. The next big plus is that Payday Loans With No Credit Check Online From Direct Lenders – easy to qualify for. There are no requirements of having a perfect credit rating to become the holder of this type of loan. At the moment, payday lenders usually ask their clients to tell about the income per month. In fact, checks are very seldom. You can have your money without problems if you have met the requirements on https://www.paydayloansnow.co.uk/payday/. As for other credits, you need a good credit score before getting approval. While experiencing some financial disaster you will not have extra time to waste it on waiting to be approved.

Examples of prohibited activities include, but are not limited to:

  • Producer or processor lending or giving money to a retailer
  • Gifts of any kind
  • Extension of credit
  • Producer or processor doing any activity on the retailer’s premises that the retailer would normally pay for

Providing Money’s Worth by Indirect Means
In-direct money’s worth is a producer or processor activity that could influence the retailer. This includes using others, whether it is the retailer’s employees or other third parties, to influence the retailer. Any act of the processor or producer to entice customers into a retailer’s store would be considered in-direct money’s worth.

Examples of prohibited activities include, but are not limited to:

    • Producer or processor creating a second company to give away items or sell items below true market value to a retailer
    • Producer or processor having or sponsoring events (e.g., parties for licensees or employees of a retailer)
    • Incentive programs (prizes or cash for selling processor’s items)
    • Processors promoting their product on the premises of a retailer
    • Negotiating any discount for customers of processor’s product

RCW 69.50.328
Marijuana producers, processors—No direct or indirect financial interest in licensed marijuana retailers.
Neither a licensed marijuana producer nor a licensed marijuana processor shall have a direct or indirect financial interest in a licensed marijuana retailer.

WAC 314-55-018
Prohibited practices—Money advances—Contracts—Gifts—Rebates, etc.
(1) No industry member or marijuana retailer shall enter into any agreement which causes undue influence over another retailer or industry member. This rule shall not be construed as prohibiting the placing and accepting of orders for the purchase and delivery of marijuana that are made in accordance with usual and common business practice and that are otherwise in compliance with the rules.
(2) No marijuana producer or processor shall advance and no marijuana retailer shall receive money or moneys’ worth under an agreement written or unwritten or by means of any other business practice or arrangement such as:
(a) Gifts;
(b) Discounts;
(c) Loans of money;
(d) Premiums;
(e) Rebates;
(f) Free product of any kind except as allowed by WAC 314-55-083; or
(g) Treats or services of any nature whatsoever except such services as are authorized in this rule.
(3) “Industry member” means a licensed marijuana producer, marijuana processor, marijuana retailer, their authorized representatives, and any affiliates, subsidiaries, officers, partners, financiers, agents, employees, and representatives of any industry member.
(4) No industry member or employee thereof shall sell to any retail licensee or solicit from any such licensee any order for any marijuana tied in with, or contingent upon, the retailer’s purchase of some other marijuana, or any other merchandise, paraphernalia, property, or service.
(5) If the board finds in any instance that any licensee has violated this regulation, then all licensees involved shall be held equally responsible for such violation.

In Summary, a non-retail entity can have no interest in or undue influence over a retailer. Money’s worth encompasses both money, items of value or services. The prohibitions are created to prevent undue influence on retailers and ultimately, on consumers. Money’s worth can be considered an indirect route to the retailer via the producer or processor, and they are restricted from advancing money or money’s worth to a licensed retailer through any means whatsoever.

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