Enforcement and Education Division Bulletin No 24-01

Date:              November 26, 2024 

To:                  Cannabis Industry Members

From:             Washington State Liquor and Cannabis Board

Subject:         Cannabis Flexible Payment Terms

This bulletin is to clarify amended rule language in WAC 314-55-115 to allow cannabis licensees to purchase cannabis from other licensees by mailing checks under the same conditions applicable to other payment methods identified in WAC 314-55- 115.

Purpose:

In March 2023, the Liquor and Cannabis Board (LCB) approved a rulemaking petition to loosen payment timeline restrictions outlined in WAC 314-55-115(1) while still maintaining that extensions of credit are not permitted.

Updated Rule:

WAC 314-55-115(1):

Checks, under the following provisions:

1. A sale must be initiated by an irrevocable invoice or sale order before or at the time of delivery.
2. Both parties must maintain records of transactions, including relevant proof of mailing, and have the records readily available for the LCB review.
3. The check must be sent, delivered, or mailed by the cannabis licensee no later than the first business day following delivery and must be deposited as promptly as is reasonably practical, and in no event later than five business days following delivery. Any attempt by a cannabis licensee to delay payment on checks for any period of time beyond the minimum as is reasonably practical will be considered an unlawful attempt to purchase products on credit.

New Language:

The new language in WAC 314-55-115 states that checks must be sent no later than one business day after a delivery of cannabis. Licensees now also, have up to five business days after delivering cannabis product to deposit that check.

Please Note: If there is a special circumstance on a payment that may cause a deposit to occur beyond the five business days, licensees are encouraged to notify their area Enforcement Officer for assistance. Officers can evaluate the circumstances of each situation and provide consideration as to the appropriate next steps. Frequent and consistent notifications of late deposits will not be considered special circumstances and may result in an unlawful extension of credit.