WA Senate - Session - Afternoon
(March 5, 2021)

Here are some observations from the Friday March 5th Washington State Senate (WA Senate) afternoon session.

My top 3 takeaways:

• Legislation creating an exemption from the State’s 37% cannabis excise tax for medical patients who joined the Washington State Department of Health (DOH) registry and purchased DOH-certified products from medically endorsed retailers was brought to the floor for its final reading before the Senate.
  • As amended, SB 5004 ("Providing a tax exemption for medical marijuana patients") would benefit medical cannabis patients who registered with DOH starting in January 2022 through January 2025. Registered patients had been exempted from paying state and local sales and use tax on qualifying products, but were expected to pay the 37% excise tax on all cannabis products.
    • On January 18th, the Washington State Senate Ways and Means Committee (WA Senate WM) heard the bill.
    • On February 17th during the WA House WM executive session on the bill, sponsoring Senator Karen Keiser successfully proposed an amendment to end the exemption at the beginning of 2025. The Washington State Joint Legislative Audit and Review Committee (JLARC) would be tasked “to identify any changes in consumer behavior and determine whether the exemption results in an unanticipated decrease in state revenue” and report their findings to lawmakers by December 2024.
    • On March 3rd, the Washington State Senate Rules Committee (WA Senate RULE) included SB 5004 in a package pull of legislation to the Senate floor calendar.
    • Fiscal notes were added on February 28th and March 3rd. The most recent note projected minor revenue and expenditures impacts for WSLCB and the Washington State Health Care Authority (WA HCA). However, JLARC requested $322,800 between fiscal years (FY) 2024 and 2025 to complete the new study.
    • The near absence of medically compliant products in the Washington state marketplace was pointed out by patients and medical experts to senators in November 2020.
  • Lieutenant Governor Denny Heck, the Washington Senate President, heard a motion to suspend the rules and bring the substitute bill to third reading. Hearing no objections, he opened the floor to remarks from senators (audio - 1m, video).
  • Keiser said SB 5004 would “help many of our medical marijuana patients” that had been disadvantaged by being "forced to pay a very high excise tax” many couldn’t afford. She emphasized the legislation was only applicable to patients and designated caregivers “on the Department of Health state registry and would only apply to [DOH] certified products.” Keiser told the Senate that a period of tax reprieve for patients was in the spirit of “the original effort to legalize medical marijuana,” adding that “we need to get back there” (audio - 1m, video).

• A prominent member of the minority caucus, Senator Ann Rivers, voiced measured support of the bill, viewing it as unlikely to undermine perceived regulatory benefits offered by the patient database.
  • Rivers gave her support for the bill while noting her experience achieving passage of SB 5052, the legislation which merged the medical and adult use cannabis markets in 2015 (audio - 3m, video). 
    • She said that in passing SB 5052 "it was our hope that we would be able to get sort of that wild west of, of the medical marijuana system as it had evolved under control, and harmonize it with our, our recreational, or adult general use, program in our state." Although there’d been “some concern about this bill that it may reintroduce that wild west, I am comfortable, however, because of the original construction of [SB] 5052...and the guidelines around the marijuana registry that we developed, that this bill should” help patients “while maintaining the tight regulation around the recreational market," Rivers explained.
      • Learn more about Rivers’ family background with medical cannabis, her press releases dealing with cannabis, and photos of Rivers and others attending the bill signing for SB 5052.
    • "Part of the registry is that it's not just about the patients, it's about the authorizing physicians,” Rivers stated, as SB 5052 had “outlined that the physician had to have a relationship with the patient. We also made the registry searchable so that if we saw one physician who was doing nothing but churning out authorizations---sort of like we noticed with the opioid pill mills---that we would be able to approach that physician about why...they were writing so many.”
      • In opposing HB 1105, a Washington State House of Representatives (WA House) bill pertaining to arrest protections for authorized medical cannabis patients not in the registry, Representative Joe Schmick made a similar argument about the merits of using the registry as “kind of a carrot” for patients which helped track health care professionals issuing authorizations.
    • Rivers concluded that her comfort with SB 5004 was due to the fact that Keiser “kept an eye on the intent of what the Legislature, and actually the people did so many years ago, and the subsequent changes to make sure that we limit our youth access to marijuana while making sure that patients have the medicine that they need at a reasonable cost.”
  • In addition to SB 5052 in 2015, Rivers was a legislative leader on cannabis issues for WA Senate Republicans.
    • 2013: SB 5887 - “Concerning the medical use of cannabis.” An ultimately unsuccessful attempt to tax medical cannabis sales at a lower rate than adult use cannabis.
    • 2017: SB 5130 - “Increasing marijuana license fees and adding a temporary additional fee on marijuana licenses issued by the Washington state liquor and cannabis board.” Apparently intended to fund the procurement of a new cannabis traceability system---which turned out to be MJ Freeway Leaf Data Systems---the bill also permanently increased cannabis licensee annual renewal fees from $1000 to $1300.
    • 2017: SB 5131 - “Addressing provisions concerning marijuana with respect to research licenses, local authority notifications, the retail licensing application process, processor wholesale events, and jurisdictional requirements.” This lengthy legislation combined several cannabis licensing, advertising, medical, and other regulatory issues together. It also legalized cannabis sharing between adults which remained a criminal act after the passage of Initiative 502.
    • 2019: SB 5318 - “Reforming the compliance and enforcement provisions for marijuana licensees.” See coverage of the bill signing, and updates from Washington State Liquor and Cannabis Board (WSLCB) leadership on reforms resulting from the required independent review of agency enforcement in September and November 2020.
    • 2020: SB 6206 - “Creating a certificate of compliance for marijuana business premises that meet the statutory qualifications at the time of application.” See coverage of the bill signing and rule implementation formally adopted by WSLCB on January 6th.

• During a final roll call on whether to pass the legislation, a solid majority of senators backed its passage.
  • Hearing no further calls for comment, Heck initiated a roll call vote on SB 5004 which the senate secretary announced was supported by all but seven senators from the minority caucus (audio - 2m, video).
    • Senator John Braun, Republican Leader
    • Senator Sharon Brown, Republican Deputy Leader
    • Senator Perry Dozier 
    • Senator Jim Honeyford
    • Senator Mike Padden
    • Senator Mark Schoesler
    • Senator Shelly Short
  • Following passage, the legislation was delivered to the WA House where it was introduced and referred to the Washington State House Finance Committee (WA House FIN) on March 7th. Under the legislative cutoff calendar, legislation must be given a public hearing and recommended for passage by a fiscal committee in the opposite chamber no later than April 2nd.