The Washington State House Commerce and Gaming Committee (WA House COG) considers issues relating to the regulation of commerce in alcohol, tobacco and cannabis, as well as issues relating to the regulation and oversight of gaming, including tribal compacts.
WA House COG - Committee Meeting
(March 25, 2019)
- USA - Washington
- Washington State House Commerce and Gaming Committee (WA House COG)
- WA House COG - Committee Meeting
Monday March 25, 2019 1:30 PM
Observed
Observations
The House Commerce and Gaming Committee amended and passed SB 5318 regarding Washington State Liquor and Cannabis Board (WSLCB) enforcement powers.
- See details on the SB 5318's Senate policy committee public hearing and executive session, and the Senate fiscal committee public hearing and executive session. Engrossed Substitute SB 5318 (ESSB 5318) was passed by the full Senate on March 11th with a striker amendment. In the House, the Commerce and Gaming Committee hosted a policy committee public hearing prior to the executive session scheduled for Tuesday March 26th.
- Committee Counsel Peter Clodfelter briefed members on the bill’s amendments (audio – 5m, video). Amendment H-2434.3, offered by Representative Steve Kirby, was a striking amendment with the following effects on the bill:
- Amends one of the enumerated circumstances in which the Liquor and Cannabis Board (LCB) may issue a civil penalty to a marijuana licensee without first issuing a notice of correction, may cancel a license for a single violation, or may consider certain prior violations when making negative licensing decisions, so the LCB may do so when the LCB can prove by a preponderance of the evidence the violation is the diversion of revenue to criminal enterprises, gangs, cartels, or parties not qualified to hold a marijuana license based on criminal history requirements.
- Eliminates from the enumerated circumstances in which the LCB may issue a civil penalty without first issuing a notice of correction, may cancel a license for a single violation, or may consider certain prior violations when making negative licensing decisions, the act of using firearms in a facility licensed by the LCB that poses a direct and significant threat to public safety.
- Amends the new limitation that applies to escalating penalties for violations so an escalation of penalties applies only to multiple violations that are the same or similar in nature.
- Replaces the new clear, cogent, and convincing evidence standard with a preponderance of the evidence standard in the context of the LCB proving violations that are punishable with license cancellation, denial, suspension, revocation, or nonrenewal.
- Provides that the LCB may not consider any violation that occurred more than two years prior (rather than occurred before April 30, 2017), as grounds for denial, suspension, revocation, cancellation, or nonrenewal, unless one of the enumerated circumstances applies.
- Authorizes the LCB to consider a public safety administrative violation history record with the LCB in the context of reviewing a marijuana license application and for considering the denial, suspension, revocation, cancellation, or nonrenewal of a marijuana license (so the LCB is not limited to only considering arrests, convictions, and a criminal history record check).
- Eliminates, from the new limitations on the LCB’s use of settlement agreements, the provision that the LCB may only disapprove, modify, change, or add to the terms of a settlement agreement if the LCB finds an agreement to be clearly erroneous.
- Retains the requirement that the LCB must give the terms of a settlement agreement substantial weight.
- Eliminates the creation of the Legislative Work Group on Cannabis Enforcement and Training Processes and Procedures.
- Amendment 5318-S.E AMH COG CLOD 044, from Chair Derek Stanford, was an amendment to Kirby’s striking amendment that:
- Changes the use of the terms “responsible party” and “person” to say “licensee” in the context of notices of corrections and civil penalties issued by the Liquor and Cannabis Board (LCB).
- Codifies Section 3 of the bill, relating to the LCB’s issuance of civil penalties, in chapter 69.50 RCW instead of chapter 43.05 RCW.
- Changes the use of the term “hearing examiner” to “hearing officer” in the context of the settlement conferences that may be held between a hearing officer of LCB designee and the licensee that received a notice of an alleged violation.
- Committee Counsel Peter Clodfelter briefed members on the bill’s amendments (audio – 5m, video). Amendment H-2434.3, offered by Representative Steve Kirby, was a striking amendment with the following effects on the bill:
- Stanford said his amendment would “make a few technical changes in wording” without changing policy in the bill. It was passed unanimously by a voice vote (audio – 1m, video).
- Next, the committee discussed Kirby’s striking amendment, as amended by Stanford (audio – 4m, video).
- Kirby explained the amendment was “[the] result of a great deal of stakeholder work.” Kirby admitted “I went out there pretty far” on HB 1237, the House companion bill he sponsored, likening it to “squashing a fly with a sledgehammer.” However, he added, “it provided a really excellent opportunity for everybody to get together and come to agreement over the senate bill.” Pronouncing the bill “ready to go,” he highlighted one change: “I have it on good authority that we needed to take out the legislative work group if we wanted to have any bill at all.” While not elaborating on the source of that message, Kirby said “for the most part” stakeholders wanted the bill even without the work group.
- The work group had been cited by WSLCB Enforcement Chief Justin Nordhorn as a potential way to identify inconsistencies in enforcement during a recent agency work session.
- The removal of the work group from SB 5318 may indicate lawmakers are content with WSLCB progress towards hiring an independent consultant to serve a similar function. Cannabis Observer requested and obtained the WSLCB’s request for proposals (RFP) statement of work for “a neutral, third party consulting firm to examine the practices of the WSLCB’s Enforcement and Education Division.”
- Representative Brandon Vick called the bill a “first step” in “a subject matter that’s only growing” while conceding there were “still some corrections to make in the grander scheme” of cannabis policy beyond the bill.
- Kirby’s amendment was adopted unanimously by voice vote.
- Kirby explained the amendment was “[the] result of a great deal of stakeholder work.” Kirby admitted “I went out there pretty far” on HB 1237, the House companion bill he sponsored, likening it to “squashing a fly with a sledgehammer.” However, he added, “it provided a really excellent opportunity for everybody to get together and come to agreement over the senate bill.” Pronouncing the bill “ready to go,” he highlighted one change: “I have it on good authority that we needed to take out the legislative work group if we wanted to have any bill at all.” While not elaborating on the source of that message, Kirby said “for the most part” stakeholders wanted the bill even without the work group.
- The roll call vote for passage of the amended bill recorded all committee members in favor except Representative Bill Jenkin. Representative Jesse Young was not present for the vote.
- The amended bill was referred to the House Rules Committee with a “Do Pass” recommendation.
On Monday March 25th, The House Commerce and Gaming Committee hosted a public hearing for SB 5276, “Concerning hemp production."
- SB 5276 was granted a public hearing in its Senate policy committee on January 29th and a substitute bill was passed during executive session on February 7th. The bill was granted a public hearing in its Senate fiscal committee on February 25th and was passed during a subsequent executive session. Engrossed Second Substitute SB 5276 (E2SSB 5276) was passed by the full Senate on March 12th with one amendment.
- The House Commerce and Gaming Committee hosted a public hearing for SB 5276.
- Staff Counsel Peter Clodfelter summarized the bill’s effects (audio – 2m, video); from the House bill analysis:
- Establishes a hemp agricultural commodity program, under the Washington State Department of Agriculture’s (WSDA) jurisdiction, to replace the Industrial Hemp Research Program, which is repealed January 2020.
- Requires the WSDA to develop and submit the state’s plan for regulating hemp production to the United States Department of Agriculture, with certain minimum components, under a process included in the 2018 Farm Bill.
- Authorizes Washington State University to develop and make accessible an Internet-based application to provide regional communications concerning recommended planting times for hemp crops in Washington.
- Amends the Controlled Substances Act to expressly exclude hemp from scheduled substances.
- Kelly McLain, Policy Advisor to the Director of the WSDA, testified “other” saying that the “fiscal ask for this program is not included in the governor’s budget.” McLain said WSDA costs for the program were “first year impacts” as the department expected the program to be “fully self-sustaining after year one.” McLain said WSDA had worked with stakeholders and “with the proposed amendments [the agricultural commodity program] would allow Washington producers the opportunity to participate in this new and emerging market” (audio – 1m, video).
- Josh Ashby, an attorney with Lane Powell, told the committee he represented “many clients with an interest in growing hemp” and lauded the bill for “bringing Washington up to speed” with hemp policies in other states. He favorably cited an amendment on hemp as a food product as it brought the subject “down to the state level for administration” while the federal government developed more robust policies (audio – 2m, video).
- Staff Counsel Peter Clodfelter summarized the bill’s effects (audio – 2m, video); from the House bill analysis: