If a marijuana establishment holds both a retail marijuana store and dispensary license, can they sell their existing inventory on July 1, 2017 as either medical or adult-use marijuana?
Yes, as long as what is sold to adult-use customers meets the packaging, labeling, and potency requirements in the emergency regulation adopted June 26, 2017.
What are purchasing limits for adult-use marijuana?
Patients and retail customers can purchase 1 ounce per transaction.
What are the possession limits?
Adult-use consumer limits are one ounce of marijuana other than concentrated marijuana, or one-eighth of an ounce of concentrated marijuana. One-eighth of an ounce of concentrate is not to exceed 1,750 mg of THC.
What does an adult-use customer need to enter the store or make a purchase?
A customer must provide identification to prove that they are 21 years of age or older, just as is required to purchase alcohol.
Can a registered agent of one dispensary use that same registered agent card to access or work in other dispensaries?
Yes, as of July 1, each registered agent needs only one card per establishment type (i.e., dispensary/retail marijuana store, cultivation facility, product manufacturing facility, testing facility, and distributor.) If an agent is registered at one establishment, they can enter and work at the same type of establishment for which they already have a registered agent card.
What does a registered agent need to provide to an establishment to begin work?
An applicant will need to show an establishment a letter or other document showing proof they have submitted their application to the Department of Taxation or for applications submitted to the Division of Public and Behavioral Health (DPBH) prior to July 1, the applicant can use the document showing proof they submitted their application to DPBH.
How long is the temporary approval valid?
After July 1, 2017, up to 30 days if the person’s approval has not been revoked.
Do I have to use a licensed distributor?
A licensed distributor is required to transport marijuana to a retail marijuana store.
Can a retail marijuana store deliver to an adult-use customer?
Yes, the retail marijuana store must follow the transportation rules under the temporary regulations.
Can a marijuana cultivation facility transport to a marijuana production facility without a licensed distributor?
Yes, a licensed distributor is only required when delivering adult-use marijuana to a retail store.
Is there a requirement to designate marijuana or marijuana products delivered to a dual licensed retail establishment as medical or adult-use?
If delivery is made to a dual licensed retail establishment without a licensed distributor, it can only be sold as medical marijuana to patient cardholders. The licensed dispensary should keep records that upon inspection or audit would show that the delivered marijuana or products were sold only to cardholders.
If a licensed distributor is used for the delivery, there is no requirement to designate marijuana or marijuana products as medical or adult-use except at the point of sale.
Can a dual license cultivation or production facility transport to a dual license dispensary without using a distributor?
Yes, if they are transporting medical-only product that complies with the rules in the answer above.
What if there are not any licensed distributors?
Until there are licensed distributors, there is no legal way to move adult-use marijuana to a retail store.
What if I designate my entire inventory as medical marijuana in order to transport it to a retail store and then sell it as retail marijuana?
The ONLY legal way to transport adult-use marijuana to a retail store is through a licensed distributor. If you transport marijuana by any other means, you will be subject to enforcement action by the Department up to and including revocation of your license.
Transactions with Medical Only Certificate Holders
How does a medical only cultivator or product manufacturer sell its products to a dual licensed establishment?
A cultivator or product manufacturer that only has a medical marijuana registration certificate can only sell marijuana or marijuana products to a dual licensed marijuana establishment if there is an agreement between the establishments acknowledging that the marijuana or product can only be sold to a medical patient cardholder.
How will the Department enforce this?
The licensed dispensary should keep records that upon inspection or audit would show that the delivered marijuana or products were sold only to cardholders. If the Department finds establishments in violation of the requirements for medical only inventory tracking, they will be subject to enforcement action.
When can marijuana that is purchased from a medical only cultivator or product manufacturer be sold as adult-use marijuana?
With the exception of the inventory a dispensary has on hand July 1, 2017, marijuana that’s purchased from a medical only cultivator or product manufacturer can never be sold as adult-use.
What are the taxes on marijuana?
Starting July 1, 2017, marijuana will be taxed in the following way:
- 15% excise tax on the first wholesale sale (calculated on the Fair Market Value); and
- Sales tax; and
- 10% retail excise tax on the sale price when sold for adult-use and not to a patient cardholder. Marijuana or products sold to a patient cardholder are not subject to this 10% excise tax.
Is the retail excise tax imposed on the original price or discounted price?
The tax is imposed on the sales price. The sales price does not include cash discounts allowed and taken on sales.
Is the retail sales tax imposed upon the original price or the price plus the retail excise tax?
The retail sales tax is applied on the sales price, not including the retail excise tax.
Is the retail excise tax imposed on the original price or the price plus the sales tax?
The retail excise tax is applied on the sales price, not including the sales tax.
For products that were already sold from the cultivator prior to July 1, 2017, will there be an additional wholesale tax imposed based on the new tax structure?
No, any items that were sold from the cultivator prior to July 1, 2017, whether in the inventory of the producer/manufacturer or the retail store or dispensary will only be subject to the retail excise tax and/or sales tax when it is sold as adult-use or to a patient cardholder.
Is there anything else I need to know about the tax changes?
Under the new tax structure, only cultivators and retail stores will file and pay marijuana taxes. The Department will automatically convert cultivators’ tax accounts from Medical Marijuana Tax (MMT) to Wholesale Marijuana Tax (WMT). A cultivator will need to file a WMT return monthly, even if filing a “zero” return (i.e. even if there is no tax liability).
The Department will establish Retail Marijuana Tax (RMT) accounts for retail stores, who will also need to file and pay a RMT return monthly.
All other licensees will have their MMT accounts removed, and will not be required to file and pay marijuana taxes.
The establishments must also file a monthly sales tax return that includes both the sales for adult-use and the sales to patient cardholders.
Establishments that do not file each of the required returns – even if they do not owe tax – will receive delinquency notices from the Department.
Packaging and Labeling
What are the requirements for packaging, labeling, advertising and potency of adult-use marijuana?
The Department adopted an emergency regulation addressing these requirements and restrictions. All establishments should familiarize themselves with the regulation.
How do I address the differences in the packaging and labeling requirements for medical versus adult-use marijuana in my dual-license store?
All products for sale must meet the stricter requirements and restrictions in the Department’s regulation.
When do the labeling and packaging requirements that were passed in the 2017 legislative session become effective for medical marijuana?
October 1, 2017.
When do the labeling and packing requirements that in the Department’s regulation for adult-use become effective?
July 1, 2017.
I received a conditional approval letter from the Department. It says the conditional approval expires June 30, but I will not have my local zoning approval until after that date. What do I do?
When you obtain your approval from the locality, submit it to the Department. When the Department confirms that your application is complete, your application should be ready for approval.
Keep in mind that you cannot begin operating under adult-use until the Department issues your unconditional license.