Fact Sheet

Initiative 502’s Impact on the Washington State Liquor and Cannabis Board

Initiative 502 licenses and regulates cannabis production, distribution, and possession for persons over 21; remove state-law criminal and civil penalties for activities that it authorizes. It taxes cannabis sales and earmarks cannabis-related revenues. The new tightly regulated and licensed system is similar to those used to control alcohol.

Licenses and Fees
Creates an application process that mirrors the liquor license application process.
Creates three new cannabis licenses: producer, processor, and retailer. The fee for each license is a $266 application fee and $1062 annual renewal fee.

  • Cannabis Producer: produces cannabis for sale at wholesale to cannabis processors and allows for production, possession, delivery, and distribution.
  • Cannabis Processor: processes, packages, and labels cannabis/cannabis-infused products for sale at wholesale to cannabis retailers and allows for processing, packaging, possession, delivery, and distribution.
  • Cannabis Retailer: allows for sale of usable cannabis/cannabis-infused products at retail outlets regulated by the WSLCB.

    The initiative allows the WSLCB to charge fees for anything done to implement/enforce the act. For example, fees could be charged on sampling, testing, and labeling that would be the cost of doing business as a licensee.

Cannabis Taxes
Per RCW 69.50.535 and WAC 314-55-089, all retail licensees are required to remit to the Washington State Liquor and Cannabis Board (WSLCB) an excise tax of 37 percent on all taxable sales of cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products. 

The WSLCB enacted rules that establish procedures and criteria for:

  • The equipment, management and inspection of production, processing, and retail outlets.
  • Books and records maintained by licensed premises.
  • Methods of producing, processing and packaging of cannabis/cannabis infused products, to include conditions of sanitation.
  • Standards of ingredients, quality, and identity of cannabis/cannabis infused products produced, processed and sold by licensees.
  • Security requirements for retail outlets and premises where cannabis is produced and processed.

Retail Outlets
The WSLCB originally set the number of retail outlets at 334, taking into account population, security and safety issues, and discouraging illegal markets. Due to recent legislation which allows current dispensaries to transfer over the number of retail outlets will increase to 556.

  • Retail outlets may not employ anyone under the age of 21, nor allow anyone under the age of 21 to enter the premises.
  • Retail outlets are only authorized to sell cannabis/cannabis products or paraphernalia.
  • Retailers are allowed two signs identifying the outlet’s business or trade name, not to exceed 1600 square inches.
  • They are not allowed to display cannabis or cannabis related products in a manner that is visible to the general public.

Individuals twenty-one years of age or older are legally authorized to possess and use:

  • One ounce of  usable cannabis
  • Seven grams of cannabis concentrate/extract for inhalation
  • 16 ounces of cannabis infused product in solid form 
  • 72 ounces of cannabis infused product in liquid form
  • cannabis-related drug paraphernalia

Individuals will still be subject to criminal prosecution for:

  • Possession in amounts greater than what is listed above.
  • Possession of any quantity or kind of cannabis/cannabis infused product by a person under 21 years of age.






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