WA House COG - Committee Meeting
(January 15, 2018)

Here are some observations from the Monday January 15th, 2018 Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• In an executive session for HB 2334 one week after its initial public hearing on January 8th, WA House COG Counsel Thamas Osborn described an amendment by prime sponsor David Sawyer which offered “purely technical changes” and removed “provisions specifying certain procedural requirements for approval of a [cannabidiol] CBD product” (audio - 1m, video).
  • Osborn reported that the only amendment was a proposed substitute from Sawyer, the chair of the committee, which made “purely technical changes to language relating to laboratory accreditation” as it had been indicated that “laboratory certification” was “not the right term.”
  • The substitute would also drop “provisions specifying certain procedural requirements for approval of a cannabinoid product by the Liquor and Cannabis Board following laboratory testing,” he stated, allowing the “requirements to be established by administrative rule.” He acknowledged this meant the bill no longer had “extremely specified procedural requirements and just leaves that to rule” development by WSLCB representatives.
    • Both the original and substitute bill expected imported CBD to have a tetrahydrocannabinol (THC) level “of .3 percent or less on a dry weight basis” and to be tested “for contaminants and toxins by an accredited testing laboratory licensed under this chapter and in accordance with testing standards established under this chapter and the applicable administrative rules.”
    • However, the substitute version dropped a third requirement, that imported CBD be “explicitly approved by the liquor and cannabis board for use by licensed producers and processors following a finding that:
      • (i) The CBD product has been properly tested in accordance with the requirements of (2) of this subsection; and
      • (ii) The laboratory test results show that the CBD product meets the legal standards for product safety and purity established in this chapter and by administrative rule.”
  • The January 8th fiscal note for the original bill projected costs for the Washington State Liquor and Cannabis Board (WSLCB) of $247,547 in fiscal year (FY) 2019, and $388,494 in the 2019-21 and 2021-23 legislative bienniums. That cost would be divided between three divisions at WSLCB:
    • Licensing Division - Section 1(b)(3) mandates WSLCB staff “explicitly approve CBD products for use by marijuana producers and processors. Adding cannabinoids is a common current practice among marijuana producers and processors. The estimated workload of reviewing and approving CBD product requests would create the need for a new position” costing $74,870 a year in addition to “One-time setup costs of $6,255 in FY19.”
    • Enforcement Division - Division staff use a methodology called “Field Increments” (FI) to assess officer time to accomplish various tasks, one FI is equivalent to 6 minutes on the job.  “Using historical data, the Enforcement Division has determined that an officer is available for 4,220 FI’s each year.” Regulating CBD products “will require an additional LCB Enforcement Officer” costing $116,777 per year and “One-time costs in FY19 of $27,695 for training and set-up.” The fiscal note includes a “Cannabinoid additives Field Increment calculator” table to show how agency officials assessed the workload impact. Staff estimated that the division would be “performing 13 marijuana audits per year, each of which will require a lab test of CBD products to determine compliance.” Under a testing contract with the Washington Department of Agriculture (WSDA), costs for testing associated with the audits would be $2,600 annually.
      • See a December 2017 report published by WSDA, Preliminary Assessment of Allowing Industrial Hemp to be Sold or Transferred to Marijuana Processors. The report was mandated by 2017 cannabis legislation, SB 5131.
    • Information Technology Division - Modifications to the licensing system entailed an estimated “$6,600 in contracted costs,” and the traceability system would require “$12,750 in contracted costs.” The fiscal note concluded that there would be expected “one-time divisional staff cost that is expected to be minimal.”
      • HB 2334 was considered in the midst of the transition to MJ Freeway’s Leaf Data Systems when the original launch window had already been missed, but post-launch changes to the system were still considered reasonable. By May 2019, those expectations had been tempered by experience and Leaf still did “not provide a workflow to support the import of these products into the traceability system, a practical roadblock to exercise of the statute that went into effect on June 7th, 2018.”

• When the bill was brought up for a vote, committee members had little to say about the topic on “our first day of exec’ing.”
  • Vice Chair Shelley Kloba moved that the proposed substitute HB 2334 receive a “do pass recommendation” with Sawyer seconding her motion (audio - 1m, video).
    • Kloba began serving as chair of WA House COG on January 15th, 2021.
  • Ranking Member Cary Condotta said “there is still some concern” from members of the House Republican Caucus that “there’s overlap into the hemp business” but believed that “in the long run we’ll be fine” (audio - <1m, video).
    • Condotta retired from the legislature in 2019.
  • Sawyer described the purpose of the bill as ensuring “anybody who's accessing our recreational system, whether it’s hemp or otherwise, that it’s tested and safe.” He noted that legal cannabis consumers “presume that it's safe and tested, and it currently is not if it is a hemp product,” adding that “we have no intention of testing [hemp] in this bill” beyond its use as an additive for adult use cannabis (audio - <1m, video).

• The entire committee, except for Representative Jesse Young, chose to recommend the modified version of the legislation (audio - <1m, video).
  • The substitute version of HB 2334 received a “do pass recommendation” and was referred to the Washington State House Appropriations Committee (WA House APP) on January 18th. The bill received its first finance committee public hearing on February 1st.