Liquor and Cannabis Board denies petition to open rulemaking on medical cannabis tax verification

The Washington State Liquor and Cannabis Board voted March 10 to deny a petition seeking rulemaking to require retailers to verify medical cannabis recognition cards in the Department of Health database before granting a medical-cannabis excise tax exemption.

Kevin Walder, policy and rules manager for the board, recommended denying the petition filed Jan. 12 by petitioner John Kingsbury, saying existing rules already require retailers to verify that a buyer is a qualifying patient or designated provider with a valid recognition card in the DOH database. Walder told the board that WAC 314-55-090 and related provisions, along with DOH training materials and LCB auditing authority, provide mechanisms to hold licensees accountable.

Walder relayed Kingsbury’s follow-up spot checks, saying Kingsbury reported that “4 out of 6 stores” in recent checks failed to verify recognition cards and that in some instances the wrong tax treatment was applied. Walder argued those results suggest the problem is more one of enforcement capacity and industry compliance than unclear rule language: “rulemaking would not be an efficient or effective way to address the concerns,” he said, suggesting enhanced education and targeted enforcement as likely more effective responses.

Board members debated whether to accept the petition and open a rulemaking process that would gather broader input from patients, retailers and enforcement staff. Chair Volendroff said accepting a petition would not automatically change rules but would create a public record and opportunity for stakeholder input ahead of a scheduled legislative review of the exemption in 2028. Board member Garrett urged prioritizing enforcement action and said the presentation answered his questions about the issue.

Gordon Holmes moved to deny the petition as recommended by the director’s office; Board member Garrett seconded. Chair Volendroff recorded that he would have preferred accepting the petition and therefore abstained. The motion passed with Holmes and Garrett voting in favor and Volendroff abstaining.

The board did not adopt new rule language. Members said they expect continued internal discussion and follow-up with enforcement and the director’s office; Holmes said he hoped for a report from Director Grant about enforcement steps the agency can take. The meeting adjourned after the vote.