Enforcement and Education Bulletin: Update Cannabis “Money’s Worth”

May 2, 2023 – The LCB Enforcement and Education Division has come out with clarification regarding what is allowable in financial agreements between producers, processors, and retailers.  These restrictions, referred to as “money’s worth,” are intended to prohibit actions which influence or attempt to influence the purchasing practices of the retailer with respect to cannabis product.

Direct Money’s Worth involves a producer or processor giving tangible items like money or gifts to a licensee or a retailer.

This includes:
-Lending or giving money to a retailer
-Gifts beyond nominal value
-Extension of credit
-Volume discounts
-Discount of a product to one retailer over another

Money’s Worth by In-direct Means is when a producer or processor conducts activity that could influence a retailer. This could be goods or services above nominal value to others, like employees or third parties, in order to influence the retailer.

Other examples of this include:
-Licensees creating a second company to give away items or sell items below true market value to a retailer
-Producer or processor having or sponsoring events for licensees or employees of a retailer
-Incentive programs (swag, prizes, or cash for selling a producer/processor’s items)
-Negotiating any discount for customers of a producer/processor’s product (rebates, split discounts, custom products, etc.)
-Retailers requiring bulk discounts, rebates, custom products, or services outside of what is allowed in RCW 69.50.369

There are some items and services a producer or processor can provide to a retailer, but they are limited to items of nominal value, and those items cannot be passed on to retail customers.

Examples for what is allowed:
-Items of nominal value such as branded promotional items (lighters, pencils, apparel, and similar items valued $30 or less singularly or in the aggregate)
-Educational participation in “vendor day” type events at retail locations
-Listing the locations that carry product on the producer / processor licensee’s website

Note: None of these types of allowed activities can be required by either licensee as a condition of business.

Overall, a producer or processor may not have an interest in, or influence over, a retailer. A retailer cannot require a producer or processor to engage in prohibited practices as a condition for business. Money’s worth prohibitions are to prevent influence over other licensees and consumers.

Read the complete bulletin here.

Please contact Gleam Law to understand how this affects your Washington cannabis business or if you receive an Administrative Violation Notice (AVN).