The Washington Legislature passed bill HB 1794 to expand the ability of cannabis businesses to enter into intellectual property agreements for trademarked goods or services. The bill will become law if it is signed by Governor Islee. The new law would allow parties to enter into exclusivity arrangements, receive royalty payments up to 10% of gross sales, and employ quality control measures to ensure the brand’s integrity.
Businesses entering into a marijuana licensing agreement must disclose the arrangement to the Washington Liquor and Cannabis Board and comply with recordkeeping requirements. Businesses licensing intellectual property that comply with the terms of the agreement are exempt from qualifying for a marijuana business license.