The Cannabis Alliance - Webinar - Legislative Roundtable
(March 23, 2022)

Here are some observations from the Wednesday March 23rd Cannabis Alliance Legislative Roundtable Webinar.

My top 5 takeaways:

• During the 2022 legislative session, very few cannabis-related bills were passed by lawmakers along with some cannabis-specific spending in the state operating budget.
  • HB 1210 - “Replacing the term ‘marijuana’ with the term ‘cannabis’ throughout the Revised Code of Washington.”
    • The legislation passed on March 1st instructed the Washington State Liquor and Cannabis Board (WSLCB) to make similar changes to the word in rule through “expedited rulemaking.”
    • Governor Jay Inslee signed the bill into law on March 11th.
  • HB 1859 - “Concerning quality standards for laboratories conducting cannabis analysis.”
    • The bill was given final legislative approval on March 8th establishing an interagency coordination team (ICT) to set cannabis lab standards.
    • The text as passed by the legislature was signed by Inslee on March 24th.
  • SB 5796 - “Restructuring cannabis revenue appropriations.”
    • An assortment of revisions on spending for cannabis research, prevention, enforcement, and distributions to local governments was passed by the House on March 4th and senators on March 7th.
    • Inslee signed the bill as passed by legislators on March 24th.
  • SB 5693 - “Making 2021-2023 fiscal biennium supplemental operating appropriations.”
    • WSLCB was given money for their continuing systems modernization project (SMP) and to fund “contracting with an independent entity to prioritize social equity applicants.” 
    • The Washington State Department of Agriculture (WSDA) was provided funding to complete “rulemaking for a voluntary cannabis certification program that is consistent with the department's existing organics program.”
      • Lawmakers last heard about the long-delayed organic-comparable cannabis certification program in October 2021.
    • The Washington State Department of Commerce would disburse $200 million in community reinvestment funds by June of 2023.
      • Community reinvestment had been recommended by the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF).
  • The three bills and the budget were the only legislation with cannabis implications passed by the legislature. 28 other bills identified by Cannabis Observer failed at various stages, including agency request legislation.

• Caitlein Ryan, Cannabis Alliance Interim Executive Director, engaged with Senator Karen Keiser and Representative Shelly Kloba, chairs of their chamber’s respective cannabis policy committees, leading to a conversation about two unsuccessful medical cannabis bills.
  • Ryan asked about “any delightful surprises in this very busy session” for cannabis - or “frustrations you're still nursing.”
    • Kloba noted the pleasant surprise she’d experienced seeing “for the second year in a row, Representative [Eileen] Cody voted yes on a bill” dealing with “patient access to cannabis.” Kloba specified HB 1105, “Concerning arrest protections for the medical use of cannabis,” wasn’t something she thought Cody would back, and was “very delighted” to see her support it in both a committee and floor vote on the bill. “And now, apparently,” Kloba noted with a laugh, “she’s retiring” after serving in the House since 1995.
    • Lara Kaminsky, Cannabis Alliance Government Affairs Liaison, thought HB 1210 changing the “lexicon” in state law was “a real big step in the right direction." She then said she was “very much still nursing” the failure of HB 1105 and SB 5004, “Providing a tax exemption for medical marijuana patients.” Ryan echoed that she viewed both bills as "ripe for passage," and was disappointed they hadn’t been passed.
  • Continuing the conversation on the medical cannabis bills, Ryan described how they had done “very well” in the 2021 legislative session, “and then in [2022] sailed through,” with HB 1105 “garner[ing] even more votes out of the House” before momentum behind them dissipated. She asked the legislators, “what happened?” 
    • Kloba felt their failure “certainly wasn't due to lack of effort," specifically crediting John Kingsbury, Cannabis Alliance Patient Caucus Chair, for doing “the yeoman's work of connecting with every possible person” he could, some “more than once.” She said that patients and other medical cannabis stakeholders understood the value of “equal treatment,” but “it's hard to make the [Washington State House] Appropriations Committee get super excited about patient protections.” Kloba believed the “relevance of it” needed reinforcement for many legislators, as well as moving bills forward quickly before the session was “congested with all the other…bigger ticket” issues that committee members dealt with. 
    • Kingsbury clarified that HB 1105 “got stuck” in the Washington State Senate Rules Committee (WA Senate RULE) and Keiser brought up a “disconnect on the senate side” as that bill had been assigned to the Washington State Senate Law and Justice Committee (WA Senate LAW), rather than the policy committee she chaired, the Washington State Senate Labor, Commerce, and Tribal Affairs Committee (WA Senate LCTA). She added that she hadn’t even known it was in WA Senate RULE, “and I’m the Vice Chair.” She asked for better collaboration “with all of the members who touch on the issue.”
    • Cannabis Alliance Lobbyist and Gordon Thomas Honeywell Vice President Al Ralston “blame[d] it on” the coronavirus pandemic which inhibited his in-person lobbying abilities. With HB 1105, he commented that it had been passed by WA Senate LAW on February 17th and he believed he'd spoken about it to Keiser, though it “hadn’t ended up on a leadership rules [bill] pull list.” Keiser’s memory was that it had been too late by the time she’d heard about the bill, and that committee chairs in the senate weren’t always “collaborating.”
  • Ryan delved into the functioning of the rules committees, explaining that “it’s not as simple as just a vote out,” asking about the different ways “things can go from the rules committee on to the floor.” Keiser said it could be a vote, or a “package pull,” and that most of the senate committee chairs were on WA Senate RULE, where their role was “to get our committee’s bills out of rules.” She remarked it wasn’t “really allowed” for the majority caucus to be advancing bills from the committee solely because they’d sponsored them, although she indicated members of the minority caucus would attempt to do that. Keiser mentioned sometimes there was a “trade” or agreement to move certain bills for personal reasons, but “our first duty is to get our high priority bills” from committee onto the senate floor. She felt that generally, “in a short session, we should not have had” as many single issue bills, and should have worked on “omnibus” bills covering broader issue topics, “‘cause each bill takes so much time.”
  • On SB 5004, Ryan observed the bill “didn’t quite make it” to a final vote by the House, but some lawmakers “who may not be excited about cannabis in particular, really saw the benefits of this bill” to help the patient communities. She was grateful for Keiser’s remarks on the legislation during the first public hearing on the measure in January 2021.
    • Keiser had seen both her previous effort and SB 5004 fail to be passed by the House and suggested a subsequent bill on the topic should start there, provided House leadership “make it a priority.” Kloba took that input to heart, and agreed to help the bill get started in her chamber. Keiser advised reaching out to Representative Paul Harris.
    • Kaminsky admitted SB 5004 had ended up being a “personal” bill for her, as she’d worked with WSLCB staff to help them recognize the necessity of the change. Ralston said that in trying to keep the bill out of House Appropriations (WA House APP), it had gone to the Washington State House Finance Committee (WA House FIN) committee instead. But the engrossed substitute version included a $200,000 Washington State Joint Legislative Audit and Review Committee (JLARC) study “for a $9,000 fiscal impact bill” which “created problems.” Ralston added he was tracking who would replace Representative Noel Frame as WA House FIN chair, given that she was running for the district senate seat.

• Ryan then asked about the failure of “producer/processor bills” HB 1855, “Concerning a craft cannabis endorsement,” and HB 1710, “Establishing a Washington state cannabis commission.”
  • Noting that HB 1855 was a revision of earlier bills, Ryan was curious if the legislation needed another iteration “next year.” Micah Sherman, Raven Co-Owner, believed “systemic impacts from how things are oriented” under the existing license structure, such as “limited access points” to consumers, were becoming evident. His hope was that over the next year stakeholders “tackle that issue in a comprehensive way” as craft cannabis legislation had been viewed as “something that we could potentially get passed.” “We’re definitely happy with” keeping language from HB 1855, but “if there’s a coalition of businesses in the industry” that had specific ideas he was “open to that.” He wanted an “omnibus bill for cannabis” to include craft cannabis in a way that might replicate the success of the state’s craft brewing and distillery industries.
    • Sherman was also a board member of the Washington Sun and Craft Growers Association (WSCA) and a WA SECTF appointee co-leading the Licensing Work Group.
  • Ryan asked about HB 1710, sharing her perspective that there’d been "a bit of a tone shift" in the legislative conversation on a commodity commission for cannabis production compared to prior years. She indicated that the bill had been sent to WA House APP, where many cannabis bills went “to die.”
    • Kaminsky said the proposed commission focused on industry driven research and felt it was “so straightforward, and so logical" to have the group established to further study cannabis agriculture. She hadn’t been entirely certain “what the sticking point” was on HB 1710, as “all references” about potential marketing of cannabis by the commission had been removed, but she’d still heard the objection “they’re going to do marketing.” Kaminsky speculated that a possible "underpinning concern" was that the existence of any commission would “make it clearer that it is actually an agricultural crop.”
      • Cannabis is explicitly excluded under state laws and rules defining agricultural products, barring cannabis businesses from using several agricultural tax deductions and exemptions. This is in spite of environmental research and federal labor guidance designating cannabis production as an agricultural industry, and private research suggesting cannabis is among Washington’s top agricultural commodities.
    • Kingsbury stated that there had been “a significant amount of misinformation” about marketing, but he’d also witnessed disinformation on other cannabis bills and found it was “hard to fight people that are trying to confuse." Keiser wondered aloud if HB 1859 and the ICT could be “a launching point" for the creation of other entities like a commission or craft cannabis, and give a “seal of approval” that a concept had been vetted by several of the state cannabis regulators.
    • Kloba acknowledged the “roadblocks” already mentioned before adding that some of her colleagues objected to having state universities engaged in cannabis research as “it's federally illegal." However, she noted that the University of Washington Addictions, Drug, and Alcohol Institute (UW ADAI) and the Washington State University Center for Cannabis Policy, Research, and Outreach (WSU CCPRO) engaged in these types of studies already. Kloba stated there were “monthly webinars, starting…this month” from experts working together on “a huge number of research projects.” This was evidence to her that some studies “can be done” and objecting to them due to the federal status of cannabis was a strawman argument.
    • Keiser said she planned to ask WSLCB leaders to set up “an internal science advisory committee that includes UW and WSU cannabis researchers” as well as those with credentials “from other states that have significant cannabis production and marketing and retailing.” Interstate collaboration could help "create at least some decent levels of science that we can all agree on" and combat disinformation. Ryan felt this might be something the ICT would investigate as they established cannabis testing standards. Kaminsky agreed with Kloba that some people had been misinformed about what research bodies could do, saying even some WSU officials had been uncertain. She argued to them that there were types of study options besides “specific plant-touching research,” commenting that they’d sounded receptive.
    • HB 1710 was superseded by SB 5365 which received a public hearing in WA Senate LCTA on February 1st.

• The panelists then discussed equity in light of elected officials failing to enact HB 2022, “Concerning social equity in the cannabis industry,” which included recommendations from the legislature’s own task force on the subject.
  • Ryan was appreciative of the public comment on HB 2022 as “folks went on record with where they stood” regarding using tax dollars “in a more representative way…towards the push for equity.” She also lauded WA SECTF members who “didn’t compromise in presenting that bill.”
  • Ryan turned to Sherman as a WA SECTF member, asking for his thoughts on “areas of action moving forward” or increased awareness of the topic by lawmakers. Sherman responded that he’d found the lobbying effort around the bill "not very successful at all" in part because there was persistent “intimidation about access points" making cannabis available to youth despite “incredibly high compliance rates” for not selling to minors, and no evidence cannabis legalization led to underage use. He indicated that the "robbery situation is highlighting…what happens when you consolidate so much economic activity into so few places," wanting more access points for producers and a wider distribution of cannabis profits “across a broader section of people.” Beyond expanding access “to license ownership” for the existing types, Sherman reported that the WA SECTF Licensing Work Group was looking into cannabis delivery as well as social consumption licensure. He was complimentary of most in the cannabis sector whom he said were trying “to be compliant” and show cannabis businesses didn’t have some of the “negative effects that are often associated with it.” While the 2022 session revealed some “obstacles” on cannabis equity, Sherman felt there was “still a lot of work to do.”
  • Ryan’s impression was that some established cannabis businesses and trade groups believed in equity “just as long as it doesn’t hurt [their] business.” She asserted that addressing equity in cannabis would involve adjustments “that might feel a little bit painful at the outset, but then the overall outcome” was a cannabis market respectful of “everybody that worked very hard to get us where we are.”
  • Offering constructive criticism, Kloba observed the Alliance was “an experienced, savvy group" that understood how to advocate and pressure legislators to enact their priorities successfully. She compared this with WA SECTF, where some participants were “engaging in the legislative process for really…the first time.” 
    • Having at first been an “unsophisticated advocate” herself facing a “learning curve” on lobbying for her ideas, Kloba diagnosed part of the problem as "unrealistic expectations" by some WA SECTF participants presuming the legislature would approve of whatever they recommended. However difficult it was to get most task force members to approve a change, she stated it was even harder to get the majority of each chamber to see the proposals “need to move forward” when other parties might be “whispering in their ears” with criticisms.
    • Realistic expectations and a bigger “advocacy team” for cannabis equity legislation could secure a legislative champion to help “craft a bill, and then all the rest of the process” which she suggested was “designed to kill ideas.” Kloba hoped people engaging with WA SECTF wouldn’t be discouraged because it was valuable for lawmakers to hear from them. She also advised breaking up the recommendations into separate bills for a “progressive package of things” that stakeholders and policy makers could “attack over time.”
  • Kaminsky was in full agreement with Kloba’s impression, saying it was reminiscent of some medical patient groups “trying their hand at advocacy” after cannabis was legalized by voters in 2012. “It was a bit disastrous," she argued, and there were “remnants of the missteps in the minds of legislators." She alleged patients and their advocates did “not know the rules" about making strong and concise arguments in a public process, or even “if you’ve got a suit and tie, put it on.” Ryan said there was an ongoing debate over “activism, protest, lobbying influence,” and what works. Keiser was doubtful legislators were “put off” by people just based on their passion or inexperience with a legislative process, and called for “authentic voices” to share their insights with a “citizen legislature." Ryan concurred, wanting to help “passionate voices” be heard in cannabis policy.
  • Sherman relayed that the last WA SECTF recommendations were due in December, and he was encouraging that report be “an opportunity to really…dispel some of the misinformation” on the issues, and share facts on how Washington stacked up to other legal cannabis jurisdictions. He wanted task force input to be able to “inform all of the bills in cannabis moving forward” and incorporate equity perspectives “into everything.”

• The last topic touched on was unsuccessful legislation to regulate cannabinoids, an issue which grew contentious for both licensees and regulators over “seven iterations” on the subject throughout the session.
  • Ryan felt there had been “tomfoolery” by opposition to bills to expand WSLCB regulatory authority on cannabinoids beyond delta-9-tetrahydrocannabinol (delta-9-THC) and stop the sale of products outside the regulated cannabis market containing cannabinoids synthesized from hemp-derived cannabidiol (CBD) extract.
  • Kloba described the tenor of working on the issue during the session as many “sleepless nights and…really Herculean efforts" by Keiser, who added that cannabis interests would “have to deal with the increasingly powerful support for the hemp industry.” Keiser understood hemp had been expected to be an agricultural product, which kept the crop “under the radar” before it was clear some were converting hemp derivatives into a “chemical drug." Keiser claimed WSLCB leaders released some kind of statement that barred cannabinoid products from being sold by anyone “with a liquor license of any kind…and they’re going out on a limb on that one, I think.”
  • Ryan commented on the “highly technical” nature of the legislation, asking “how much of that aspect of it made misinformation really easy to disseminate?” Keiser chuckled and concurred some lawmakers’ “eyes glazed over” when faced with the details of the topic. Her view was that “it does come down to advocates,” noting that leaders of the Washington CannaBusiness Association (WACA) were “adamant” and worked hard “to have enough votes to kill anything” of which they didn’t approve. She anticipated a work session in June in WA Senate LCTA on the subject matter where she’d push for a WSLCB scientific advisory body and wanted cannabis trade groups to agree upon “legislation for 2023” so that there could be “clear rules for this industry.”
    • According to Ryan, Alliance members saw “a fundamental disagreement on what we’re trying to accomplish” around regulations over synthetic cannabinoids and “whether or not they should be allowed in the marketplace.” In circumstances where an industry was divided not on legislative details but the intent of the legislation, what could be done to end the impasse, she wondered. Keiser mentioned common legislative tools: “bring people to the table, have conversations, clarify, find points of agreement, and set the points of disagreement aside.” If these processes couldn’t lead to a compromise, she said there would be a “flat out fight and generally…somebody wins and somebody loses.”
    • Kloba added sometimes there were areas where a stakeholder could “peel off” opponents by addressing specifics. She noted the Washington hemp market had “found its way” into the legal cannabis sector following a “glut of hemp.” “Now, I don’t begrudge any farmer trying to make the best possible profit on the crop” they’ve produced, she mentioned, but there were “like 800 different uses of hemp” that could be incentivized by state regulations including more ecologically sustainable options. She wanted hemp farmers to have “really strong markets that are developing” besides selling distillate for cannabinoid synthesis. Keiser agreed this would be a "really more productive approach" for hemp because cannabinoid regulation had been presented by opponents as “an attack on the hemp industry." Kloba added that she’d consider trying to get a bill before the Washington State House Rural Development, Agriculture, and Natural Resources Committee, where she was also a member.
    • Kaminsky lamented that there was “no infrastructure to support" the hemp industry. Keiser speculated that there could be “a hemp commission bill,” and Kaminsky noted a task force on the commission was being funded with $20,000 in Section 311(21) of the 2022 supplemental budget.
  • Sherman brought up that “they’re now making CBD from orange peels” meaning the issue of naturally versus synthetically-derived cannabinoids wasn’t going away, and should be addressed “independently of whether or not it came from hemp.” His hope was to have “this drug development outside of the cannabis industry where it belongs” in the pharmaceutical space. Keiser drew an allusion to “the Walter White economy," wherein chemists did “their best to create impairing products.”
    • Keiser was scheduled to participate in the WSLCB Cannabis Retail Safety Forum on Tuesday March 29th.