Over the weekend, new Washington laws went into effect expanding state licensed marijuana producers’ and processors’ ability to source, utilize, and integrate CBD from a non-licensed source into a CBD product available for sale within the state’s recreational marijuana market.
I. Washington State Expands Access to CBD from Non-Licensed Sources
Last spring (2018), Washington state’s 65th legislature passed House Bill 2334 relating to the regulation of the use of cannabinoid additives in marijuana products. Effective as of June 7, 2018, the law added a new section to Revised Code of Washington permitting only licensed marijuana producers and processors to utilize CBD products as additives for the purpose of enhancing the cannabidiol concentration of any product authorized for production, processing, and sale under Washington law. The applicable regulations, codified at WAC 314-55-109, went into effect last Saturday, December 1, 2018.
Prior to the enactment of this statute, CBD product additive were required to be lawfully produced by, or purchased from, a producer or processor licensed by the WSLCB, and pursuant to the rules and liabilities outlined in previous Cultiva Law blogs. Following the enactment of section 69.50.326 et al., however, these same WSLCB-licensed marijuana producers and processors may obtain and use a CBD product from a source not licensed by the WSLCB, so long as: (a) the purpose of the use of the non-licensed CBD product is for the purpose of enhancing the cannabidiol concentration of any product; the CBD product has a THC level of 0.3 percent or less on a dry weight basis; (b) the CBD product has been tested for contaminants and toxins by a testing laboratory accredited by the WSLCB and in accordance with testing standards established under this chapter and the applicable administrative rules; and (c) all other aspects of production, processing, or sale must comply with the RCW and WAC as described in the previous section of this memo (such conduct is thoroughly regulated under the WAC).
The new WAC provisions draw heavily on the existing legal structures provided for in the Revised Code of Washington and the Washington Administrative Code. Nevertheless, these provisions will likely be amended over the early years of enforcement like other marijuana laws across the states. As written, the law contemplates:
II. Heightened Traceability and Reporting Requirements Consistent with Other Applications of the WAC to Marijuana Processing
Despite the new law permitting a processor licensee to obtain and utilize non-licensed CBD, which is therefore not a part of the traceability system prior to coming into the possession of the licensee, licensees must maintain full compliance with the existing traceability system under Washington law. That is, a licensee must enter CBD products obtained from a source not licensed under this chapter into the state traceability system and keep the information in the traceability system completely up to date, consistent with marijuana and marijuana product record-keeping and traceability requirements in WAC 314-55-083, described previously in this memo.
Certain provisions of this law, however, differ from other aspects of the code. For example, licensees must keep CBD products obtained from a source not licensed under this chapter labeled and quarantined in an area separate from marijuana and marijuana products under video surveillance consistent with the requirements for controlled areas in WAC 314-55-083(3) until the CBD products successfully pass quality assurance testing or are destroyed due to failure of tests as provided in this section. At no time during the quarantine period can the product be handled or moved under any circumstances, except for purposes of deducting samples as required under this section, and is subject to auditing by the WSLCB or its designee(s).
Unlike the legal provisions applicable to the testing of licensed marijuana-derived CBD which allows (upon approval by the WSLCB) failed lots or batches of marijuana flower or usable product to be used to create extracts, CBD products obtained from a source not licensed by the WSLCB that fail to meet the quality assurance testing standards described above must not be added to any marijuana product and instead must be disposed of properly. (See, WAC § 314-55-097 and the disposal logged into the traceability system consistent with WAC § 314-55-083.)
III. Testing Requirements Consistent with Other Applications of the WAC to Marijuana Processing
Just as Washington law applicable to the testing of licensed marijuana must be rigorously tested, similar sample deduction and testing requirements apply to CBD products obtained from a source not licensed under this chapter. Additionally, such products must pass quality assurance testing prior to being added to any product. As explained above, products that fail quality assurance testing must not be added to any marijuana product and instead must be disposed of properly. (See, WAC § 314-55-097 and the disposal logged into the traceability system consistent with WAC § 314-55-083.)
A CBD product will categorically fail quality assurance testing if (a) the product tests above 0.3 percent THC; (b) the CBD product does not contain any detectable amounts of CBD or CBD-A, or; (c) the sample test results indicate that a substance is present that is not THC, CBD, or inert substance which the THC or CBD is dissolved into.
Other categories of required testing applicable to such products include pesticide sampling, heavy metal screening, residual solvents screening, microbiological screening, and mycotoxin screening.
IV. Some Things Never Change
It is important to note that these rules apply only to naturally derived CBD – and NOT to synthetic cannabinoids prohibited under RCW 69.50.401. Washington law is clear that any test result that suggests the presence of a synthetic cannabinoid must be immediately reported to the WSLCB, and may subject a licensee knowingly violating these laws to the penalty of license cancellation or, worse, criminal prosecution.
(For a deeper understanding of CBD’s legal underpinnings, view our previous blog posts: Interstate Transport and Sale of CBD as of Winter 2018; CBD law and policy as of Fall 2018; The FDA’s approval of the first drug containing CBD in June 2018; An analysis of Hemp Industries Association, et al. v. U.S. Drug Enforcement Administration (Case No. 17-70162), in which the Ninth Circuit declined to invalidate the DEA’s new drug code specifically for “marihuana extract” that went into effect on January 13, 2017; and a reminder that the interstate transportation of marijuana is categorically illegal.)