Note: If you are having trouble viewing this newsletter please update your browser to the latest version. 

Alcohol and Cannabis

With the increasing popularity of CBD (cannabidiol, an active ingredient in cannabis derived from the hemp plant) nationwide, our agency has received many questions about using cannabis products in alcohol production and serving. Licensees should be aware that this practice is prohibited in Washington State.
Cannabis Derived Compounds
Washington law defines marijuana,  in RCW 69.50.101, as all parts of the plant Cannabis, whether growing or not, with a THC concentration greater than 0.3 percent on a dry weight basis; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds or resin. That means even if the compound is non-psychoactive -- like terpenes or CBD -- if it is derived from cannabis it is considered marijuana by law. 
CBD Regulation in Washington
CBD products are authorized in Washington only for use by licensed marijuana producers as additives to marijuana products that are sold in licensed marijuana stores (RCW 69.50.326). 
Federal Government Guidance
Beer, wine and spirit labels must be approved by Tax and Trade Bureau (TTB) before they are available for sales in the United States. Per the TTB website they will not approve alcohol labels with THC, CBD and terpenes in them. For beer and wine, below 8.5 percent, and selling only in WA State, you don’t need to submit TTB approval but you do need to submit your label to MIWlabels@lcb.wa.gov

Outcome
There is no legal pathway for the production/serving of alcohol with CBD or cannabis products in it. With no exceptions in law that allow cannabis to be used in the manufacturing of alcohol, the LCB will deny any labels submitted containing product from the cannabis plants, as will the TTB. If you have further questions, please contact your local enforcement officer or MIWlabels@lcb.wa.gov

Hosting Safe and Legal Holiday Parties

Our Customer Service team can answer all your questions about hosting holiday parties at your liquor-licensed location. Remember--if a group brings their own alcohol, they must have a license or permit to serve it. You may not serve or sell alcohol at the same time a group with a license or permit is serving alcohol on your premises.
Call Customer Service at 360-664-1600 for more information. Thank you and have a safe, happy, and legal holiday season!

Trending Issues

Front counter beer taps 
The WSLCB has seen numerous restaurants attempting to install their beer taps on the front counter, where customers can sit or stand. Beer taps on the front counter are only allowed in lounges or taprooms where minors are restricted. Restaurants that do not have minor restricted areas cannot have beer taps on the front counters. Beer taps on front counters in taprooms and lounges must have barriers placed around them.
Liquor licenses at personal residences
We get this question quite a bit, but you may not have a liquor license in your personal residence. Both RCW 66.28.090 and WAC 314-11-090 require licensed premises to be open to inspection by law enforcement at all times. Private residences are afforded a degree of privacy under the 4th amendment of the U.S. Constitution that is incompatible with those regulatory requirements. There are some exceptions where a business and living quarters are located in the same building, but they must be physically separated from each other. The home and business must have separate exterior entrances and you cannot access the home from inside the business.


Assigning Applications by Region

Our Enforcement Officers are assigned to specific geographic locations (regions) around the state and beginning October 1, 2018, the Licensing Division also began assigning applications by region. We made this move to improve consistency and communications with both applicants and Enforcement. Each Liquor Licensing Supervisor and their team will be assigned cases based on the region where the licensed premises is located. 
If you were assigned to a Licensing Specialist before October 1 2018, you will continue to work with that Specialist until the application is complete. We will assign your future applications to a Licensing Specialist in your area. If you submit changes for multiple licensed locations at once in different regions, in most cases, we will assign one Licensing Specialist to process all of them. This will reduce duplicate efforts by the Licensing Specialists and the Licensees.
Applications from:
  • Regions 1 and 2 – will be assigned to Licensing Specialists on Marcy Wilsie and Mistie Jones’ teams
  • Regions 3 and 4 - will be assigned to Licensing Specialists on Heidi Braley and Mistie Jones’ teams
 See the map below to identify your region:

Breakage

Question: Is an industry member allowed to compensate a retailer for “breakage” while the product is in the possession of the retailer?
Answer: No, an industry member is not permitted to compensate a retailer for “breakage” of alcohol products once they are in the retailer’s possession. The Washington State Administrative Rules that allow for replacement of product do not include “breakage” replacement.  
Background: WAC 314-20-070, WAC 314-24-210, and WAC 314-28-210 defines when and how a retailer may return product.  If the product is in salable condition at the time the retailer takes possession, then the retailer accepts full responsibility for all product thereafter.  Salable, by definition, means ready for sale or marketable.
The laws and WAC 314-12-140(3) have created an exception to the “Tied-house” rules that allow an industry member to provide certain services to a retailer. This exception allows the industry member to price and arrange the retailer’s product on behalf of the retailer.
An industry member that provides labor for a retailer is not responsible for breakage that occurs during the stocking period.  The product is owned by the retailer and therefore, regardless of the activity occurring, the retailer holds all liability for the product.

Training and Development Team

In August, the Licensing Division created the Training and Development Team. Together, the team is working to improve onboarding and training for new employees, as well as updating training tools and resources for both internal and external customers. The team’s goal is to make resources more user friendly and easier to navigate for our users. The “Retail Liquor Licensing: A Guide Through the Process” is a great example of their work, with help from our Communications Team.
Please check it out here. We look forward to sharing more of our resources with you in upcoming issues.

Over-Service and the Place of Last Drink Program

Tom Dixon, Enforcement Captain Northwest Region
Licensed businesses know that they are required to carefully check a youthful appearing person's ID before selling them  liquor, marijuana, vapor or tobacco. Requiring an acceptable form of ID for customers who look under 30 years of age is as much of an expectation for the purchaser, as it is for the seller. It's a common practice and plays an important role in keeping  communities safe.  
Conversely, the public is often unaware of the laws and rules relating to over-service. Over-service laws are every bit as critical to maintaining public safety as the legal-age laws. In Washington State, it is illegal for a licensee to sell alcohol to an apparently intoxicated person, or allow an apparently intoxicated person to consume or possess alcohol on a licensed premises. Every night, our Enforcement Officers visit licensed locations from happy hour to closing time, to ensure licensees are complying with the over-service laws. 
How do officers decide which places to inspect?  In many instances they are following-up on a complaint of over-service. Our officers are also very familiar with which of the businesses in their assigned area host promotions that invite risk of over-service. They visit those locations with more frequency to encourage awareness and responsible liquor service. 
Place of Last Drink Program
In 1986, the Washington State Patrol began using a new breath test instrument that allowed the police officer to enter the place of last drink data into their system. If an intoxicated driver stated they had their last drink at John Doe’s Bar and Grill, they would make that entry into the system. The machines are polled on a monthly basis and the data is transferred to the then, Liquor Control Board. While the technology has changed some this process is still used today.
When the Place of Last Drink (PLD) list comes out every month, LCB Enforcement Officers review the list and try to visit locations with higher reported driving under the influence (DUI) numbers. Often times, officers can help the business owners by providing the data so they can see which employees may be over-pouring, or which promotions may be contributing to the problem. Many businesses will make proactive changes to reduce risk.
In the late nineties I received the PLD list and noticed one of my assigned restaurants had five DUI arrests that month. The previous month they had three DUIs. A little research revealed that almost every arrest was either Tuesday night or early morning Wednesday. I visited the premises that Tuesday night to find the cocktail lounge shoulder-to-shoulder with college students drinking $1.50 Margaritas from 9:00 p.m. to Midnight. After discussing the DUIs with the licensee, they decided it was best to discontinue the promotion. To this day, we have never had another serious problem with that popular restaurant.  

Alcohol Rules Update

Several rulemakings are currently underway and are detailed below. As always, we encourage your participation in the rulemaking process and value public input. You can find information about any current rulemaking on the Proposed Rules webpage under Laws and Rules on the WLSCB’s website. You can also find additional materials related to rulemaking items brought to Board meetings on the Board’s webpage under Board Meeting Schedule and Information.
Mini Spirits Bottle Placement and Storage
This rulemaking requires grocery stores and specialty shops with less than fifty percent of their sales from alcohol to display mini spirits bottles securely. The WSLCB made changes to the proposal (Supplemental CR-102) after the filing of the initial rule. The board is considering comments received in writing and testimony heard at the September 5, 2018 public hearing. Updated information on the progress of this rulemaking will be posted on the WSLCB’s webpage.  
Curbside Service
This rulemaking will allow grocery stores to provide curbside service when customers are picking up products ordered through online ordering and pickup programs. The WSLCB made changes to the initial rules based on written comments and testimony heard during the June 13, 2018 and October 3, 2018 public hearings. A 2nd Supplemental CR-102 with revised language was filed on October 31, 2018 and a public hearing is set for December 12, 2018.
2018 Liquor Legislation
This rulemaking implements changes made to RCW 66.24.155 during the 2018 legislative session. The rules define "ancillary activities" as activities an alcohol manufacturer participates in and include all activities, licenses, and privileges involving the public, such as serving samples, operating a tasting room, conducting retail sales, serving alcohol under a restaurant license, or serving alcohol with a special occasion license. The rules also ensure that alcohol manufacturers won’t have their manufacturing license suspended for ancillary activity violations.  Final rules were adopted by the board on October 17, 2018 and will be effective November 17, 2018. 
Breweries and Wineries
A CR-101 was issued on February 21, 2018, to initiate the rulemaking process to update and provide clarification for brewery and winery rules. The rulemaking will also address alternating proprietorships and internet sales.  
Spirits Distributor Licensing Fees
A CR-101 was issued on March 21, 2018, to initiate the rulemaking process. Rulemaking will ensure the rules are compliant with any applicable RCW.  Rules are needed to address the requirement in statute that retailers pay distributor fees on sales of spirits for resale when no prior distributor fee has been paid on the product.
Barriers
A CR-101 was issued on August 8, 2018 to initiate the rulemaking process. Rulemaking will address barrier requirements in retail liquor licensed establishments and explore options for designating primary drinking areas and areas restricted to minors.
How can you participate in the rulemaking process? 
Check out our Proposed Rules webpage under Laws and Rules on the WLSCB’s website and submit comments to rules@lcb.wa.gov. All rulemaking activity occurs at Board meetings. You can access Board agendas and meeting materials at the Board’s webpage: Board Meeting Schedule and Information.

Promote public safety and trust through fair administration and enforcement of liquor, cannabis, tobacco, and vapor laws.
-WSLCB Mission Statement
Let us know what you think, take this survey