For “Undisclosed” True Party of Interest (TPOI) violations
The objective of the program is to allow cannabis businesses to come into compliance with ownership and financing regulations without fear of license revocation.
In late June, the Washington State Liquor and Cannabis Board (WSLCB) proposed a “Hidden Ownership Amnesty Program” for licensees with undisclosed true parties of interest. By statue, there is no warning issued for a true party of interest violation. The only remedy available to the WSLCB is the revocation of the license. The objective of the program is to allow cannabis businesses to come into compliance with ownership and financing regulations without fear of license revocation.
Who Is Classified as a TPOI?
A True Party of Interest (TPOI) includes the following:
- Those legal owners who possess any stock or membership interest in a licensed cannabis business
- Spouses, even for marriages after the initial licensing was completed
- Business partners or any other party who has the right to receive any percentage of the gross or net profits from a licensed business
- Anyone exerting management control over the license
- Certain commission relationships
Each TPOI is vetted and investigated by the WSLCB to ensure they pass a federal background check, and to ensure funds were raised in the state by legal means. Only vetted TPOI’s can control daily business operations and interests.
While this Amnesty program is still in the proposal phase, many are speculating as to the requirements applicants will have to meet, and if all applications will be approved. It has been reported that:
- The WSLCB will open a ’30 day window’ for applicants to apply for this amnesty provision
- A ‘special’ application will be required and an additional ‘filing fee’ may be required when the application is submitted
- ‘Qualified’ applicants (those not currently under investigation) can apply but application for amnesty will not necessarily guaranteed
Will the Amnesty program be approved?