The Washington State Legislature signed a new bill into law this session concerning agreements between licensed marijuana businesses and those providing intellectual property goods and services. Engrossed Substitute House Bill 1794 revises existing law as to the types of agreements that licensed marijuana businesses can enter into and the manner in which compensation can be paid.
One of the biggest hurdles that marijuana licensees faced in negotiating licensing agreements was how to payment would be made to the intellectual property holder. Until now, payment for goods or services could not be based upon a percentage of sales or profits. This restriction made drafting licensing agreements very difficult in terms of coming up with a compensation scheme that worked for both parties.