WA House COG - Committee Meeting
(February 19, 2019)

Here are some observations from the Tuesday February 19th Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• The committee hosted a public hearing for HB 1974, “Establishing the Washington cannabis commission.”
  • Committee Staff Kyle Raymond briefed the committee (audio – 5m, video); from the Bill Analysis:
    • Establishes the Washington Cannabis Commission, an agricultural cannabis commodity commission comprised of cannabis producers and a Department of Agriculture (Department) representative, with assistance from an advisory council.
    • Establishes guidelines for the Department to administer a cannabis producer-initiated referendum, including requiring the Department Director (Director) to establish and maintain a certified referendum mailing list of cannabis producers.
    • Authorizes the Commission to assess and collect an annual levy from cannabis producers for cannabis and cannabis products produced.
    • Requires the Commission complete and submit to the Director an annual research, education, and training plan.
  • Committee Chair Derek Stanford inquired if the proposed commission would engage in “marketing activities” or redefine cannabis as agriculture under state law. Raymond replied that the bill did neither.
  • Representative Sharon Shewmake, the prime of eleven bill sponsors, described the bill’s pressing need. She indicated the lack of federal support and barriers to cannabis research at universities made the creation of a cannabis commodity commission timely and desirable. Shewmake mentioned the 21 agricultural commodity commissions currently recognized by the Department of Agriculture (WSDA)—including beer and wine commissions—as successful models to address industry and market concerns. She clarified the cannabis commission’s authority would be more limited than other commodities, particularly as regards advertising, but that it could lobby the state for favorable policies and provide subject matter expertise, common charges of commodity commissions (audio – 6m, video).
    • Vice Chair Kristine Reeves asked if federal funding could supplement producer self-taxation in the eventuality that cannabis is legalized nationally. Shewmake answered that commissions were typically self-funded, but she was amenable to alternative approaches.
  • Shawn DeNae Wagenseller, founder of Washington Bud Company, said she’d seen “great need and desire for [the commission’s] formation” over several years. Wagenseller referenced how common such institutions were in other sectors,  and suggested its absence led cannabis producers to rely on “individual assumptions, folklore, [and] urban legend” for business guidance rather than vetted research. Wagenseller highlighted “the alarming high number of pesticides that have been found in products on the store shelves” to emphasize a cannabis commission could “take on pesticide research to ensure Washington cannabis is the safest to consume.” She encouraged the committee to pass the bill to “lead the entire nation…because right now there is no cannabis commission in the entire world” (audio – 3m, video).
  • Caitlein Ryan, a founding member of the Central Washington Growers Association (CWGA) and adjunct board member of The Cannabis Alliance, shared how some cannabis licensees had previously grown other agricultural commodities and understood the benefits a commodity commission would bring. Ryan claimed commissions were part of “typical industry growth” in other sectors and told the committee the bill could lead to “stability in the market” and arrest the decline in cannabis prices (audio – 1m, video).
  • Alan Schreiber, the Executive Director of Washington’s blueberry and asparagus commissions, said that while he wasn’t testifying on behalf of those groups, he supported the bill because of its potential to help producers, employees, and the public. Schreiber told the committee that Washington “produces hundreds of crops worth 10 billion dollars” which received state and federal support. He highlighted “USDA-funded pesticide applicator training and worker protection and safety training” as a benefit available to every Washington farmer – except for cannabis growers. Schreiber described the research commissions typically support (“improving yields, reducing costs of production, improving pest management, and environmental protection”) before marshaling his substantial background in pest management to orient legislators toward the commission as a means to address concerns raised about pesticide residues in Washington cannabis products. Concluding that Washington had given cannabis growers “the right to produce a crop but the same growers do not have the same rights to control pests that destroy their crops, to receive training on how to properly apply pesticides, to receive training on how to protect their workers,” Schreiber encouraged passage of the bill (audio – 3m, video).
    • Representative Brandon Vick, citing the lack of a fiscal note, asked how much each grower might have to pay towards a commission’s operation. Wagenseller indicated the subject had received substantial attention, and shared “the most popular assessment…comes out to about two dollars for every thousand dollars of value.” Schreiber added that would be one of the lowest assessments for any commodity commission in the state, and Wagenseller indicated that was by design as many producers were “barely hanging on” (audio – 2m, video).
  • Hannah Street, Policy Assistant to the Director of the WSDA, testified “other” on behalf of the agency. She described some of the existing commissions and emphasized the bill would require a vote by producers before the commission would be formally created. She agreed cannabis producers were hindered in research compared to other agricultural commodities (audio – 2m, video).
  • Seth Dawson, long-time lobbyist for the Washington Association for Substance Abuse and Violence Prevention (WASAVP), tempered his organization’s objections after comments from Stanford and Shewmake made clear the bill wouldn’t further cannabis advertising. Saying that cannabis was different than other commodities because “it remains a drug and one that’s harmful to children,” he argued that allowing advocacy by the commission for favorable legislation and rulemaking would lead to “further normalization of the use of cannabis, increased access, and the promotion of the product.” Dawson suggested WASAVP could be appeased by the addition of “some language that the commission will also seek favorable legislation and regulations limiting youth access and limiting youth exposure to cannabis advertising” (audio – 2m, video).
    • Vice Chair Reeves asked Dawson if he had similar misgivings about the hops or potato commissions as those agricultural products could be processed into alcoholic beverages. Dawson claimed cannabis plants were different because they did not require processing to be “harmful in and of itself.” Reeves relayed her understanding that cannabis flowers must be cured following harvest to achieve potency. Dawson agreed to “defer to people more expert on that subject.”
    • Representative Shelly Kloba was curious if Dawson had opposed the efforts of the state’s beer and wine commissions to market or promote tourism. He responded that his organization would have similar concerns, but called those commissions a “done deal.” He added, “Our overarching concern is we have issues with the way the alcohol industry has proceeded in this state—not that it’s their fault—but I mean the policy decisions made from our point of view is not a good path for us to take with respect to marijuana” (audio – 3m, video).
  • Jim MacRae, founder of Straight Line Analytics, called the opportunity to pass HB 1974 a “historic occasion” to further normalization of cannabis and enable research. MacRae acknowledged the Liquor and Cannabis Board’s creation of a research license only to question the issuance of a single license in two years of availability. He was supportive of HB 1974’s potential to further research and offered “constructive criticism” clarifying lab licensure vs. accreditation, encouraging the commission to use traceability data, and questioning information excluded from the public record (audio – 3m, video).
  • Jedidiah Haney, Executive Director of The Laboratory Guild, spoke of the “passion and necessity” of the commission project to further research and education for the industry. Haney said his brother was a Tier 2 licensee struggling to follow best practices and predicted the bill could help the “professionalism” of the industry (audio – 1m, video).
  • Jeff Merryman, an outdoor grower in Thurston County, said he had witnessed licensees lose significantly in the industry. Merryman explained he grew cannabis exclusively for research and a commission would help. He followed up on the question about raw cannabis potency to confirm for members that uncured plants have much lower potency than processed products (audio – 2m, video).
• Members took executive action to relay HB 1401, HB 1963, and HB 2052 out of committee with “Do Pass” recommendations.
  • The committee adopted a proposed substitute bill for HB 1401, “Concerning hemp production.”
    • Staff Counsel Peter Clodfelter briefed the committee on proposed amendments to HB 1401 and the proposed substitute bill (audio – 4m, video).
    • Chair Stanford offered the substitute; the proposed substitute bill memorandum outlined changes to the original bill:
      • Updates legislative intent, definitions, and terms.
      • Authorizes the WSDA to establish testing protocols identified in regulations established by the U.S. Department of Agriculture (USDA), including testing procedures for THC levels of hemp.
      • Deletes the provision that provided that CBD and CBD products derived from hemp are considered a food product.
      • Requires the state’s hemp regulatory plan to identify qualifications for license applicants, to include adults and corporate persons and to exclude persons with felony convictions as required for plan approval under the Agriculture Improvement Act of 2018.
      • Authorizes the WSDA to adopt rules establishing fees for THC testing, inspections, and additional services required by the USDA.
      • Removes certain hemp seed cultivars deemed approved for planting, removes the directive for the WSDA to consider certain international seed cultivars when approving seed cultivars through rules, and retains other provisions regarding authorized seeds and seed sourcing.
      • Provides that Washington State University, and not the WSDA, must develop and make accessible an internet-based application designed to assist hemp producers by providing regional communications concerning recommended planting times for hemp crops.
      • Establishes there is no distance requirement or buffer zone between a licensed hemp producer or hemp processing facility and any licensed marijuana producer or marijuana processor.
      • Requires expedited rulemaking to adopt the state hemp program upon the approval of the state’s plan by the USDA.
      • Eliminates the task force on the availability of crop insurance for hemp producers.
    • Stanford’s proposed substitute was passed unanimously with support from Ranking Member Drew MacEwen (audio – 7m, video).
    • Representative Steve Kirby filed an expansive amendment to the original bill, but it did not receive a vote before the proposed substitute was presented for adoption. Kirby had planned to offer a similarly expansive amendment to the proposed substitute bill, but withdrew it because “there may be a few things in there that maybe are not agreeable to enough people to cause that to happen, that’s a nice way to put it.”
  • The committee was unanimous in passage of HB 1963, “Concerning financial arrangements regarding licensed marijuana businesses” (audio – 2m, video).
    • The committee hosted a public hearing for HB 1963 the previous day, February 18th.
    • The prime sponsor for the bill was Ranking Member MacEwen.
  • The committee was unanimous in passage of HB 2052, “Clarifying marijuana product testing by revising provisions concerning marijuana testing laboratory accreditation and establishing a cannabis science task force” (audio – 1m, video).
    • The committee hosted a public hearing for HB 1963 the previous day, February 18th.
    • The prime sponsor for the bill was Chair Stanford.
• Executive action on HB 1466 and HB 1237 was postponed (audio – 1m, video).
  • The committee deferred executive action on HB 1466, “Banning marijuana billboards.”
    • Representative Melanie Morgan filed an amendment to HB 1466 which would cancel the billboard ban, but expand the advertising buffer around schools from 1000 to 2000 feet, and create a 2000 foot buffer between cannabis business billboards.
    • Representative Bill Jenkin asked if the amendment would eliminate a specific billboard in his district. Staff responded that they couldn’t be sure (audio – 3m, video).
  • The committee deferred executive action on HB 1237, “Reforming the compliance and enforcement provisions for marijuana licensees.”
    • Representative Kirby filed an amendment which proposed two changes (audio – 1m, video):
      • Prohibits the Liquor and Cannabis Board (LCB) from considering any violation by a marijuana licensee that occurred before April 30, 2017, as grounds for negative licensing decisions except for the certain circumstances provided in the original bill, rather than generally prohibiting the consideration of violations occurring before June 30, 2018, as grounds for negative licensing decisions.
      • Establishes that for purposes of enforcing marijuana laws and rules, officers and employees of the LCB are designated as inspectors who have authority to issue notices of violations, but have no authority to otherwise enforce penal laws or act as a law enforcement officer as is authorized with respect to enforcement of liquor laws.
  • Comments from members suggested the language of both amendments needed additional refinement before a committee vote.