WA Governor - Bill Action
(March 31, 2022)

Here are some observations from the Thursday March 31st Washington State Office of the Governor (WA Governor) Bill Action.

My top 3 takeaways:

• Governor Jay Inslee took time to discuss how SB 5693, "Making 2021-2023 fiscal biennium supplemental operating appropriations," reflected spending priorities for the state, though he made no direct references to cannabis policy (audio - 7m, video).
  • He stated that his priorities going into the 2022 legislative session had been addressing the "homelessness crisis, our poverty, and our climate and salmon challenges." Inslee credited legislators for offering relief that “is big, that is bold, and that is fast,” particularly around homelessness.
    • Inslee’s office released a proposed supplemental budget in December 2021.
    • The Washington State Senate Ways and Means Committee (WA Senate WM) hosted a public hearing on Inslee’s proposed budget on January 11th, and then a hearing on substitute bill language on February 21st. The House companion bill, HB 1816, also had two hearings but, unusually, the chamber chose not to move their version of the bill and waited to amend the Senate version instead.
    • Differences between the chambers weren’t resolved until the end of the session when a legislative conference committee was appointed. They met on March 9th to approve the language in the conference report, but representatives for the Republican minority caucuses said they’d not seen the final budget “until about an hour or two” before the meeting. Representative Drew Stokesbary indicated his party was generally “not invited to participate” in forming the report, even as their caucuses represented “approximately 40% of Washingtonians.” As a result, he and his colleagues chose not to endorse the document.
    • Learn more from the following budget documents:
      • Summary
      • Highlights 
      • Statewide Summary and Agency Detail 
      • Budget Outlook
  • Inslee lauded the money being invested in behavioral health programs, saying that to “ensure access to care we need a strong work force to provide behavioral health” treatment. He expressed confidence that “new investments” being made would lead to “new ways to get more experts in the field that can actually provide behavioral health services.” Additional funds for those “experiencing behavioral health crises” were focused on vulnerable youth and homeless populations, Inslee indicated.
    • During the Washington State Health Care Authority (WA HCA) Division of Behavioral Health and Recovery (DBHR) Listening Session on March 22nd, DBHR Deputy Director Michael Langer stated legislators added approximately $250M to the behavioral health budget for FY 2023 on top of existing appropriations.
  • The governor also mentioned spending on transportation, infrastructure, clean energy, and climate programs, stating that “we know we have to respond to the climate crisis, [and] these budgets help us do this.”
  • Inslee then signed the budget bill while crediting Senator Christine Rolfes and Representative Timm Ormsby, leaders of legislative fiscal committees (audio - 1m, video).
  • Cannabis was mentioned in the governor’s veto message, but only to strike references to:
    • Appropriations to the Washington State Liquor and Cannabis Board (WSLCB) and Washington State Joint Legislative Audit and Review Committee (JLARC) related to unpassed medical cannabis tax exemptions in SB 5004.
    • Appropriations to WSLCB, the Washington State Patrol (WSP) and the Washington State Department of Revenue related to unpassed cannabinoid regulation authority in SB 5983.

• New appropriations and provisions impacting cannabis policy were spread across several regulating agencies, including hemp task forces, research, community reinvestment, and cannabis social equity.
  • WA HCA - Section 211 - Medical Assistance - p. 281
    • The authority would be given an increase in funds from the renamed dedicated cannabis account (DCA) in fiscal year (FY) 2022 from $24,511,000 to $26,063,000, and from $25,182,000 to $27,241,000 in FY 2023.
    • New spending in subsection (99)(a) had the “director of the liquor and cannabis board or the director's designee” listed as one of many stakeholder on a WA HCA report “on psilocybin services wellness and opportunities.” The agency would receive $200,000: $50,000 in FY 2022 and the remainder in FY 2023 to complete a final report by December 2023.
  • WSLCB - Section 141 - p. 185
    • The agency was provided more DCA dollars in FY 2022, from $11,575,000 to $11,846,000, and in FY 2023, increasing from $11,608,000 to $12.5 million.
    • New spending on cannabis comes from both the DCA and the state general fund in subsections:
      • (6) - $316,000 in FY 2023 “provided solely for implementing House Bill No. 1859” regarding cannabis testing labs.
      • (7) - $20,000 in FY 2023 “provided solely for implementing Second Substitute House Bill No. 1210” regarding cannabis nomenclature.
      • (9) - $500,000 in FY 2023 “provided solely for the board, in consultation with the office of equity and community organizations, to select a third-party contractor to prioritize applicants in the cannabis social equity program under RCW 69.50.335.”
        • WSLCB opened a social equity rulemaking project in October 2021 which included conceptual draft rule language about social equity contractors. The agency hosted a listen and learn forum on the project on March 23rd.
      • (13) - $123,000 in FY 2023 “provided solely for implementation of Engrossed Second Substitute Senate Bill No. 5796.”
        • At publication time, it was unclear what implementation WSLCB staff would need to undertake specific to SB 5796. The final agency fiscal note indicated no anticipated fiscal impact.
  • Washington State Department of Agriculture (WSDA) - Section 311 - p. 570
    • The department would be granted a small increase in their DCA appropriations, going from $621,000 to $628,000 in FY 2022, and from $627,000 to $635,000 in FY 2023 “for marijuana pesticide testing.”
    • New cannabis-focused spending was budgeted to WSDA from the general fund in subsections:
      • (19) - $200,000 in FY 2023 “provided solely for rulemaking for a voluntary cannabis certification program that is consistent with the department's existing organics program.” This effort was initially approved—but not mandated or funded—in 2017 as part of SB 5131.
      • (21) - $81,000 in FY 2022 and $139,000 in FY 2023 “provided solely for a hemp in food task force and a hemp commission task force.” Of the money, $200,000 would go towards a hemp in food task force, and the remaining $20,000 would be put towards the hemp commission task force. Both task forces would be required to submit recommendations to lawmakers by December 2022.
  • Washington State Department of Health (DOH) - Section 222 - p. 409
    • The department would be given more funds from the DCA, going from $10,538,000 to $10,584,000 in FY 2022, and from $10,562,000 to $11.8 million in FY 2023.
    • New cannabis appropriations for DOH came from DCA and the general fund in subsections:
      • (58) - $41,000 in FY 2022 and $777,000 in FY 2023 “provided solely for implementation of House Bill No. 1859.” 
      • (89) - $55,000 in FY 2023 “provided solely to implement Second Substitute House Bill No. 1210.”
      • (104) - $1,084,000 in FY 2023 “provided solely for implementation of Engrossed Second Substitute Senate Bill No. 5796.”
        • At publication time, it was unclear what implementation DOH staff would need to undertake specific to SB 5796.
    • Contrary to earlier versions of the budget, DOH was not specifically allocated more than $2M “to undergo a competitive procurement process for an updated medical marijuana authorization data system.”
  • Washington State Department of Commerce (WA Commerce) - Section 128 - p. 55
    • The department’s budget from the DCA grew for FY 2023 from $1,809,000 to $3.2 million.
    • Though not cannabis-specific, the department would be responsible for disbursement of a $200 million community reinvestment grant originally intended to be an annual appropriation under unsuccessful legislation HB 1827.
      • The budget allotted the money for FY 2023, including a million dollars “provided solely for the department to develop a community reinvestment plan to guide the distribution of grants from the community reinvestment account created in section 947 of this act.” The funding would need to be re-established in subsequent years, but under SB 5693 grants could go towards economic development; civil and criminal legal assistance; community-based violence intervention and prevention services; and reentry services. Disbursements would be granted by WA Commerce officials “in collaboration with the governor's office of Indian affairs and ‘by and for community organizations’ as defined by the department of commerce and the office of equity.” In making the reinvestment plan, the department was “encouraged to incorporate existing and ongoing work from relevant task forces and work groups including, but not limited to, the social equity in cannabis task force, the reentry council, and the homeownership disparities work group.”
      • The Washington State Legislative Task Force on Social Equity in Cannabis Community Reinvestment Work Group planned to have its second meeting on April 14th.
  • Washington State Department of Ecology (DOE) - Section 302 - p. 509
    • The department would be given additional money from the DCA, going from $270,000 to $284,000 in FY 2022, and from $276,000 to $290,000 for FY 2023.
  • Washington State Office of the Superintendent of Public Instruction (OSPI) - Section 501 - p. 587
    • The office would receive more DCA funding in FY 2023, increasing from $533,000 to $550,000.
    • Under statewide programs in subsection (4)(g)(i), officials would get a modest increase in DCA dollars for FY 2023, from $1,053,000 to $1,070,000 “provided solely for dropout prevention, intervention, and reengagement programs, including the jobs for America's graduates (JAG) program, dropout prevention programs that provide student mentoring, and the building bridges statewide program.” However, the additional allocation was “solely for the building bridges statewide program.”
  • University of Washington (UW) - Section 603 - p. 692
    • UW would be granted an expanded appropriation from the DCA, going from $263,000 to $325,000 for FY 2023.
  • Washington State University (WSU) - Section 604 - p. 711
    • WSU would be allocated additional revenue from the DCA, going from $138,000 to $175,000 for FY 2023.
  • Washington State Treasurer - Section 801 - State Revenue for Distribution - p. 777
    • A general fund appropriation being used for cannabis tax distributions was cut in half, going from $40 million to $20 million. At the same time, a new DCA appropriation created by SB 5796 put in place a larger distribution to local governments of $25,243,000.
    • Section 804 - Transfers to the basic health plan trust account pursuant to RCW 69.50.540 were increased by $10 million to $265,000,000 in FY 2022, and by $3 million to $268,000,000 for FY 2023. A transfer from the DCA to the general fund specified as “the lesser of the amount determined pursuant to RCW 69.50.540” was increased by $7 million to $202,000,000 in FY 2022. 
  • The Evergreen State College - Section 607 - p. 726
    • Subsection (4)(g) included $75,000 between FY 2022 and FY 2023 from the general fund for the Washington State Institute for Public Policy  (WSIPP) “to review available research literature to investigate and describe any relationship between early substance abuse of cannabis, opioids, or cocaine and mental health disorders in young adults; and any relationship between nutrition and mental health disorders in young adults.” This money covered the additional time granted to the group to complete its report, which was moved back from the end of June until December 2022.
  • Criminal Justice Training Commission - Section 218 - p. 384
    • Subsection (26) established a new appropriation from the general fund of $290,000 for FY 2023 “provided solely for academy training for limited authority Washington peace officers employed by the Washington state gambling commission, Washington state liquor and cannabis board, Washington state parks and recreation commission, department of natural resources, and the office of the insurance commissioner.”

• Several standing appropriations pertaining to cannabis were maintained by the budget, though some suggested amounts were modified under another bill, SB 5796, "Restructuring cannabis revenue appropriations," which was passed during the 2022 session.
  • WA HCASection 215 - Community Behavioral Health Plan maintained money already allocated related to statutory recommendations for cannabis appropriations, and the agency would still receive $12,878,000 in FY 2022 and FY 2023 for:
    • “(i) A memorandum of understanding with the department of children, youth, and families to provide substance abuse treatment programs;
    • (ii) A contract with the Washington state institute for public policy to conduct a cost-benefit evaluation of the implementations of [cannabis legalization];
    • (iii) Designing and administering the Washington state healthy youth survey and the Washington state young adult behavioral health survey;
    • (iv) Maintaining increased services to pregnant and parenting women provided through the parent child assistance program;
    • (v) Grants to the office of the superintendent of public instruction for life skills training to children and youth;
    • (vi) Maintaining increased prevention and treatment service provided by tribes and federally recognized American Indian organization to children and youth;
    • (vii) Maintaining increased residential treatment services for children and youth;
    • (viii) Training and technical assistance for the implementation of evidence-based, research based, and promising programs which prevent or reduce substance use disorder;
    • (ix) Expenditures into the home visiting services account; and
    • (x) Grants to community-based programs that provide prevention services or activities to youth.”
    • WA HCA staff had also been provided with a half million dollars from the general fund “to contract on a one-time basis with the University of Washington alcohol and drug abuse institute to develop policy solutions in response to the public health challenges of high tetrahydrocannabinol potency cannabis.”
      • Find out more from a UW research page on high potency cannabis.
  • WSLCB - Section 141 maintained the $38,000 from the DCA in FY 2022 to implement the cannabis social equity program.
  • WA Commerce - Section 128 continued the $163,000 from the DCA for FY 2022 and $159,000 in FY 2023 “provided solely for implementation of Engrossed Substitute House Bill No. 1443” regarding cannabis social equity.
  • WSP - Section 402 maintained appropriations from the DCA of $2,423,000 for both FY 2022 and FY 2023. The money was for WSP staff “to partner with multi-jurisdictional drug and gang task forces to detect, deter, and dismantle criminal organizations involved in criminal activity including diversion of cannabis from the legalized market and the illicit production and distribution of cannabis and cannabis-related products in Washington state.”
  • UW - Section 603 continued funding in subsection (42)(a) of $100,000 “provided solely for the center for cannabis research at the university to collaborate with the Washington State University collaboration on cannabis policy, research, and outreach to create frameworks for future studies.” This included reports focusing on “Measuring and assessing impairment due to cannabis use” and the “Correlation between age of use, dosage of use, and appearance of occurrence of cannabis induced psychosis,” which were due by December 2021.
    • Nephi Stella, the UW CCR Director and Principal Investigator of the Stella Lab, was the lead author of “Frameworks for Future Cannabis Research,” a legislative report authorized through a 2020 operating budget proviso and completed in December 2021. 
  • WA Treasurer - Section 804 kept the transfer from the DCA to the general fund for FY 2023 at the previously set amount of $200 million.
  • Other changes to appropriations due to SB 5796 included:
    • An increase to WSLCB “for administration of the state Uniform Controlled Substances Act.” 
    • DOH was budgeted “up to 10 percent, but not less than $9,750,000…for administration of a marijuana education and public health program and the Washington Poison Control Center,” but under SB 5796 would receive $11 million to administer “a commercial tobacco, vapor product, and marijuana education and public health program and the Washington Poison Control Center.” The department was given $8,000 less “for administration of the marijuana authorization database.”
    • WA Commerce had the annual amount “to fund the cannabis social equity technical assistance grant program” raised to $3 million in addition to the $163,000 in FY 2022 and $159,000 in FY 2023 to “establish the cannabis social equity roster of mentors.”
    • UW Alcohol and Drug Abuse Institute had been getting $20,000 for “education materials regarding health and safety risks posed by marijuana use,” and would receive a 25% increase to $25,000.
      • The law was not changed to reflect the revised name of the UW Addictions, Drug, and Alcohol Institute (UW ADAI).
    • UW and WSU researchers’ cannabis budget decreased to $300,000 and $175,000, respectively.
    • OSPI had been receiving “up to 0.3 percent, but not less than $511,000…to fund grants to building bridges programs,” but would now get $550,000.
    • DCA distributions to local governments were simplified by SB 5796. Of the remaining cannabis revenue after other appropriation, 1.5% goes “to local governments where retailers are physically located and each jurisdiction” and another 3.5% is allotted “to local governments on a per capita basis provided the jurisdiction does not prohibit marijuana siting—counties must receive 60 percent based on each county's total proportional population.”
      • Take a look at the most recently published spreadsheet on cannabis distributions to local governments.