WA Senate LCTA - Committee Meeting
(March 11, 2021)

Here are some observations from the Thursday March 11th Washington State Senate Labor, Commerce, and Tribal Affairs Committee (WA Senate LCTA) meeting.

My top 3 takeaways:

• A staff briefing on legislation modifying the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) raised a curiously posed question from a task force member.
  • On March 2nd, HB 1443 was passed by the Washington State House of Representatives (WA House) following the adoption of two amendments.
  • WA Senate LCTA Session Counsel Matt Shepard-Koningsor briefed from the bill analysis, saying HB 1443 was “an act relating to social equity within the cannabis industry and is sponsored by Representative [Melanie] Morgan and others.” He indicated the bill “modifies multiple aspects of the social equity in cannabis program that was created in 2020” (audio - 3m, video).
    • Under the bill, the Washington State Department of Commerce would “create a pilot program by October 2nd, 2021 to provide technical assistance to current cannabis retailer licenses who meet social equity applicant criteria,” Shepard-Koningsor said. The Department would further be required to “allocate a minimum of $150,000 for the program,” he explained, listing several requirements and timelines for recipients. Aside from the pilot program, he noted that “eligible applicants under the [separate technical assistance] grant program are expanded to include all existing cannabis license holders instead of just cannabis retailers and applicants who meet social equity criteria.”
    • He said the bill extended the duration of the social equity program until July 1st, 2029 and “amends what is considered a qualifying factor to be a social equity applicant by adding ‘a conviction of a drug offense of an applicant, or an applicant’s family member,’ and other applicants who meet criteria” in rules to be defined by the Washington State Liquor and Cannabis Board (WSLCB). 
    • Shepard-Koningsor told senators that the definition of disproportionately impacted area was “amended to remove the specific time period an individual must have lived in such an area and it is replaced with a time period as determined by” WSLCB rulemaking following “consultation with certain stakeholders and interested parties.”
      • Check out the first meeting of the WA SECTF Work Group on Disproportionately Impacted Communities.
    • Shepard-Koningsor described an extension of the WA SECTF mandate from “June 30th, 2022 to June 30th, 2023” as well as changing the due date for the “final recommendations of the task force to January 10th, 2022.” He said the bill adds “two processor and two producer license holders to the task force and it adds topics to the list of task force recommendations.”
      • The bill adds two positions to the task force. While existing law requires two appointed “members that currently hold a producer or processor license or both,” under HB 1443 the task force would have “Two members that currently hold a producer license; and two members that currently hold a processor license.” 
      • Two members of WA SECTF, Raft Hollingsworth, Co-Owner of Hollingsworth Cannabis and Hemp Company and Monica Martinez, Owner of The Calyx Company, hold combination producer/processor licenses. This may mean designating Hollingsworth and Martinez to represent one of their license types while seeking two new appointees for the open positions.
    • Citing the most recent fiscal note on HB 1443, Shepard-Koningsor stated the bill was expected to cost “$363,000 in the [20]21-23 biennium from the state general fund to the Department of Health (DOH) for its support of the social equity task force.” Additionally, he reported there was “around $320,000 per biennia from the dedicated marijuana account to the Department of Commerce for the pilot program and providing technical assistance, and $38,000” from that account for rulemaking costs incurred by WSLCB.
  • Ranking Member Curtis King, the senate minority caucus appointee to WA SECTF, stated that “it seems like in this bill it, it asks for a reduction in funding of the [Washington State Patrol (WSP) drug] enforcement task force and, and shifted those monies.” He asked Shepard-Koningsor whether he “understood that correctly” (audio - 1m, video).
    • Shepard-Koningsor responded that the Task Force would be required to consider and make a non-binding recommendation on “the social equity impact of reducing or ending the funding directed to the [WSP] Drug Enforcement Task Force and redirecting...an equivalent amount to the cannabis social equity program.” Chair Karen Keiser thanked Shepard-Koningsor and commented that “we’ll take a closer look at that” (audio - 1m, video).
    • Senator King and his WA House counterpart on the task force, Representative Kelly Chambers, were both absent from the January 25th WA SECTF meeting during which motions were passed which were reflected in the subsequently published language in HB 1443.
      • On February 12th, during the Washington State House Commerce and Gaming Committee (WA House COG) executive session for the legislation, Morgan said she’d “reached out to Representative Chambers before our last task force meeting to find out what her ideas [were] and I have not heard anything back.”
      • In a February 22nd executive session on the bill in the Washington State House Appropriations Committee (WA House APP), Chambers offered an amendment to remove all new topics for recommendation by the task force, voicing the same concern that the legislation was “redirecting the funding from the State Patrol Drug Enforcement Task Force.” The amendment was not adopted.
      • On March 2nd, Chambers proposed the same amendment during the bill’s second reading in the House, suggesting the task force she and King were members of was “probably not best suited” to address the new issues. She added that if lawmakers knew these subjects would be included in 2020, the WA SECTF “would probably have a different makeup.” The amendment was not adopted.

• Representative Melanie Morgan introduced her legislation, addressing a question from one senator before hearing encouraging comments by another.
  • Morgan introduced HB 1443 not only as prime sponsor but as a WA SECTF Co-Chair, offering remarks similar to those she made during the bill’s first hearing (audio - 4m, video).
    • She acknowledged King and Senator Rebecca Saldaña’s service as the WA Senate appointees to the task force before offering background on the initial legislation creating the group in 2020 to “create criteria for a social equity in cannabis plan that would guide” WSLCB in “the issuance of its retail licenses but due to the pandemic our work did not actually begin until December of 2020.” Morgan explained that this delay meant the report “for the recommendations, that we are possibly speaking about today, was due back to the legislature in December of 2020 so it did not afford the task force any time to prepare that report.”
      • The first meeting of the WA SECTF occurred in October 2020.
    • Furthermore, task force members had encountered problems with the scope of their authority to “create this equity plan in all parts of the industry,” Morgan said, qualifying that HB 1443 reflected “some of those inputs that we heard from the community.” She talked about how the group had accrued feedback from “the [Washington State] Commission on African American Affairs (CAAA), from discussions that came out of [WSLCB] listening sessions held last fall, and also from the public comments heard in our task force meetings” which showed that “Black African Americans felt that they were left out of the original effort to legalize cannabis which continues today.” Morgan shared the view that “perpetuating old policies will continue to exclude the historically marginalized, indigenous, and communities of color.”
    • Morgan described an additional recommendation to WSLCB which would be required of the task force “on the issuance of cannabis producer and processor licenses” and that revisions to the grant program made it available to “all existing cannabis license holders and new applicants who meet the social equity criteria.” She also reviewed the pilot program to be created by Commerce officials and changes in deadlines.
    • Morgan commented that cannabis had been "historically demonized and many Black African Americans and other communities of color were over...arrested and over sentenced. But now it’s legal and we are still being left out of the wealth building industry.” She said HB 1443 had the potential to be “another example of the State of Washington practicing equity.”
    • Closing out her remarks, Morgan again credited Saldaña’s work on the WA SECTF, stating that Saldaña was “ensuring that this bill language met the place that it needed to be to ensure that parity was there and that we are ensuring that the State of Washington is making an investment in the people” (audio - 1m, video).
  • Vice Chair Steve Conway asked about the role of DOH given mention of incurred costs under the bill, to which Morgan answered that DOH had responsibility for “staffing our task force, so they provide our admin[istrative] support” (audio - 1m, video).
  • Saldaña thanked Morgan for her remarks and said it was “important that we actually equip this task force to have the resources and the jurisdiction to be successful.” She then clarified that “the [Governor’s Interagency] Council on Health Disparities” was responsible for staffing the task force in part because both Saldaña and Morgan had seen DOH “doing a really good job” staffing other task forces. Moreover, Saldaña admitted “there was lack of trust, I think, and credibility at the time...for LCB or other agencies to staff it but LCB is very much an active partner as well as other local jurisdictions.” She felt there was “good representation from the agencies involved” (audio - 1m, video). 

• Two speakers testified on the bill, one in favor and another as ‘other,’ while a half dozen people signed in - all supporting the legislation.
  • Paula Sardinas, WA SECTF Co-Chair and CAAA Commissioner (audio - 2m, video).
    • Sardinas started by expressing gratitude for the bill sponsors and committee consideration before describing her “strong support” for the proposal. She said CAAA “first looked at this issue last year...there was a lot of inequity in cannabis that we have worked feverishly over the past year to resolve.” Sardinas talked about the work of lawmakers, the public, and the task force on the issue so far “and we are satisfied and pleased with the progress that we’re making under social equity. This is not easy work.”
    • “Over the past year we have been working very collaboratively with Rebecca Smith...who’s the Director of Licensing” at WSLCB, Sardinas stated, commending Smith for “the work that she’s been doing.” She mentioned the work of WSLCB board members including WA SECTF appointee Ollie Garrett “and incoming chair Dave Postman who we think will be a tremendous addition” to the agency.
    • Sardinas said “we’re making some tweaks to the bill, but [HB 1443] is an honest effort” to craft “one of the most productive and progressive social equity programs in the country and [Washington state] will once again be a leader in that space.” She touted “bipartisan support” and promised to continue working with the Legislature and state agencies towards “the best policy possible.”
    • Sardinas also testified during the legislation’s first hearing in WA House COG on February 5th.
  • Jasmine Vasavada, Washington State Department of Commerce Legislative and Policy Director (audio - 2m, video).
    • Vasavada spoke of the Department’s role under HB 1443 and current law, saying Commerce staff had been “supporting this important work in two ways. One, we have Christopher Poulos, the Executive Director of the [Washington Statewide] Reentry Council” who had been appointed to represent the agency on the task force. Additionally the department would “be implementing the underlying grant program,” she said, and collaborating with lawmakers and the task force in order to receive “the guidance that we’ll need.”
    • Vasavada relayed her “understanding [that] Commerce won’t be able to actually get that pilot program in the bill rolling for existing businesses until the task force establishes further criteria for social equity plans” as the Department’s role was to “follow on behind the direction of the task force.”
    • Turning to Governor Jay Inslee’s 2021-23 biennium budget proposal, she said that Commerce could be allocated “an additional $1.1 million to provide grants to social equity applicants in the next biennium in recognition that the program hasn’t launched yet in the current biennium.”
  • Six people signed in to support the bill:
    • Seth Dawson, Washington Association for Substance Abuse and Violence Prevention (WASAVP) Lobbyist 
    • Bailey Hirschburg, Washington chapter of the National Organization for the Reform of Marijuana Laws (WA NORML)
    • Lara Kaminsky, The Cannabis Alliance Government Affairs Liaison
    • Herb Krohn, SMART Transportation Division
    • Quinn Majeski, City of Seattle State Relations Director
    • Crystal Oliver, Washington SunGrowers Industry Association (WSIA) Executive Director