Here are some observations from the Monday December 11th Washington CannaBusiness Association (WACA) 2023 Symposium.
My top 4 takeaways:
- Senator Karen Keiser and Representative Sharon Wylie introduced themselves to Washington CannaBusiness Association (WACA) Symposium attendees and talked about policy efforts on medical cannabis, retail theft, social equity, and other topics.
- WACA hosts conferences in the spring and winter so that attendees can share and discuss business, as well as hear from lawmakers and regulators on topics likely to come up in the Washington State Legislature (WA Legislature) or at the Washington State Liquor and Cannabis Board (WSLCB).
- Cannabis Observer has attended several of the conferences to observe officials discuss cannabis policymaking in their official capacity. At the request of event organizers, recordings of individual sessions are created for journalistic purposes but not published.
- WACA Executive Director and Lobbyist Vicki Christophersen greeted attendees and welcomed Representative Sharon Wylie and Senator Karen Keiser, “two of the most influential women in cannabis in the legislature.” She acknowledged that two other panelists, Senator Derek Stanford and Representative Jim Walsh, had been invited but were unable to make it. Christophersen asked the women to “introduce yourselves, a little bit about your own personal/professional history, and then your position in the legislature, generally, and specifically as it relates to cannabis.”
- Wylie co-chaired the Washington State House Regulated Substances and Gaming Committee (WA House RSG) and said she’d been appointed to the legislature to “represent the Vancouver, Washington area” in 2011. She acknowledged “I was on the committee to implement” Initiative 502 (I-502) “when it was approved by voters the following year…and now I’m back.” She noted that she’d previously served in the Oregon Legislature, and lobbied on behalf of local governments.
- On WA House RSG, Wylie co-chaired policy hearings on commodities like alcohol, tobacco, and cannabis, but she viewed cannabis as distinct because it also had “medical value” while the other substances were “not healthy.”
- Keiser chaired the Washington State Senate Labor and Commerce Committee (WA Senate LC), the policy committee for cannabis in that chamber, and was elected by voters in “SeaTac—the airport area—Kent, Des Moines, Burien and parts of all kinds of unincorporated areas.” She was also the Senate President Pro Tempore, noting “I don't like to call myself senior, but I don't mind having seniority - you can use it.”
- WA Senate LC (“I sometimes call it the ‘vice committee’”) covered the cannabis sector, which Keiser deemed a “vital small business community and you are struggling with several unique obstacles, many of them created by our federal government, and I have to tell you it's really frustrating to get the federal government to do anything these days.”
- She tried to “advocate for finding State avenues, State collaborations” and not wait on action by the US Congress. “I would like to collaborate with Oregon and California; and maybe Colorado on these state solutions,” Keiser told the group, “because I think state collaboration and standardizations would go a long way to helping.” She was amenable to the potential for “perhaps an interstate task force of some kind to provide recommendations and suggestions to legislators on standardization of various business operations.”
- Considering the cannabis sector to be highly regulated on the state level, Keiser felt officials had “done a really good job" creating a marketplace where cannabis was "available in safe confines." She’d been trying to address a “rather outrageous element of retail theft that's going on” which involved the “stealing of cars and then driving them through the front doors of the street retail businesses, including cannabis shops.” Keiser promised to introduce a capital budget appropriation for the Washington State Department of Commerce (WA Commerce) to award grants to “street level retailers to install bollards” in front of their premises, “planters, or pylons, or whatever but as a deterrent to this crash and grab tactic.” She indicated this had been a concern of retail associations, and she anticipated only “nominal opposition” to the idea in the 2024 session.
- Social equity had been “painful days, and hours, and months of negotiations,” but Kreiser reported being “pretty pleased with how that's been resolved and we'll hopefully continue to move forward.”
- On medical cannabis, Keiser said it was "still a concern" that medically compliant product wasn’t always available at retailers. She was open to ideas on “how we could provide a safe and steady supply of medical cannabis for those patients who need it.”
- She noted Stanford had put forward SB 5376 (“Allowing the sale of cannabis waste”) in 2023, finding it to be “a nice little bill. If we could get your help to get that bill all the way through that would be terrific.”
- Keiser concluded by touting another 2023 law which excluded cannabis from most pre-employment drug screenings, with exemptions for law enforcement and some public safety positions, calling the change "another step towards normalization.”
- A prefiled bill for the 2024 session, HB 2047, would expand exemptions “when hiring for certain positions involving services to persons with substance use disorder."
- WACA Executive Director and Lobbyist Vicki Christophersen posed several questions to lawmakers concerning what they’d learned from the legalization experiment so far, cannabis as a bipartisan subject, issues they were expecting to see in the legislative session, taxation, and other matters.
- “Both of you were in the legislature during the implementation of Initiative 502…in the last 10 years what has surprised you the most as we deliberate on implementation of what the voters passed?”
- Wylie remembered, “we spent a huge amount of time dealing with the fact that the…feds might step in, they might hurt people” and “interfere with the market.” It had taken a lot of time, “but behind that was a belief that they were going to get over that.” I-502 had been based on liquor regulations “which was…an evolution from prohibition, which was simultaneously being dismantled” based on another initiative, she stated.
- With an assumption that federal opposition to state-regulated cannabis markets wouldn’t last forever, looking back Wylie felt it was "a little naive” to have the system designed via initiative language rather than through the legislative process. She had sought out a role on WA House RSG to help update laws, feeling cannabis policy “was overdue for an overhaul.” Wylie noted how some other states had tried new approaches while "we haven't changed all that much.”
- Wylie further felt that except for those on cannabis policy committees, few lawmakers were watching the industry very closely. She warned that “a new version of prohibition thinking” was taking shape involving “the fentanyl crisis [that] has affected families and individuals very, very drastically and painfully.” She warned “anything that somebody out there is saying might be a gateway [drug] is of concern to a lot of people, and that's a very bipartisan concern” which made it “harder to move into the next phases of legitimate business.”
- Wylie hoped to see legislation removing the excise tax on medically compliant products passed, and remarked how she was “surprised at how many people I knew never gave it up after college…but people don't realize that, and…there's a lot of fear partly because of the horror of what's happening with fentanyl…they're not the same, but it is of a concern and it does flavor” how legislators regarded cannabis issues. Nonetheless, she lauded industry members for how they’d legitimized the cannabis sector.
- “I was surprised at how well the industry stepped up to open up and abide by the regulated marketplace that was created by the initiative,” observed Keiser. Businesses had integrated into communities and Chambers of Commerce, she noted. However, she remained skeptical of initiative-sourced political changes, calling them “always flawed,” and difficult to convince colleagues to “see what should be adjusted, to perfect the realities of your marketplace today, and realities of the regulations.”
- Wylie felt it had been a positive sign how legislators reacted to legacy pesticide soil contamination found at several licensed producers in the spring of 2023 as the legislative session drew to a close. “It was at a moment when anybody that wanted anything in the budget was told to go away,” she explained, “but there was money by the end…in the Capital Budget and the Operating Budget to get the Ag[riculture] Department to weigh in and provide help in that area, and…that was a big lift. It was bipartisan. It was Senate and House. And so I think that shows how strong the industry really is.”
- Keiser agreed legal cannabis was "a non-partisan issue" that no longer had standard “party line splits that sometimes arise.” She credited this in part to licensed producers connecting to some of the agriculturally-driven communities around Washington.
- “Why do you think cannabis is a nonpartisan issue?”
- Wylie argued that a lot of bills were bipartisan, often fixing issues that had arisen due to previous legislation. She mentioned how “farming and production connects with other agricultural” regions and “urban counties connect with another segment, but…there's been very bipartisan interest from the very first committee meeting that I attended.”
- Keiser said they tried to demonstrate how the WA Legislature was a “collaborative” body, “unlike Congress.” She felt that traditionally conservative interests were common in small business groups, while more liberal ones came from "a civil rights approach to the issue of decriminalization,” resulting in votes that were “an interesting mix” of both major parties.
- “Why do you think Congress, and then maybe in particular the Senate, previously under Republican control now under…Democrat control, can't seem to get off the dime to make some of these things happen?”
- “It’s freakin’ broken,” Keiser remarked. Unnerved by partisan gridlock, she warned, “I think we're all in a very dire situation. All I can say is your state legislatures can work very hard, and be very effective to help our residents and citizens be safe and be taken care of, as best as we can.”
- Wylie felt that “the federal government sometimes relies on states to solve…those problems,” yet “when the problems that are facing the nation—whether it's war or something else—are so terribly dire, addressing something smaller becomes even harder.” She argued that if Congress “can't deal with the big things, they don't have any will to take care of something that's sort of mid-range, even though it affects a lot of people.”
- “What do you think with respect to cannabis will be the issue that dominates our legislative session coming up?”
- Wylie had helped lead the Washington State House Transportation Committee and commented that project costs had increased, “we're talking millions and billions of dollars increased in costs 25 to 40% because of supply chain [disruptions] and constant labor shortages.” While some tax changes had taken effect to help offset these costs, she anticipated that “there's going to be some very, very hard choices, and some of those projects are related to safety, some of them are related to climate change.”
- Keiser felt the short session was a poor time to “start anything brand new.” Instead she advised “thinking about some level of interstate compacts with this industry. I think if you could work across state boundaries, California, Oregon, Colorado, and some others. I think we could really get our regulations harmonized and standardized, and taxations harmonized and standardized.” She hoped licensees could consider “becoming more vibrant, and more profitable, and a growth industry.” Keiser hadn’t seen “any new pieces of legislation that we haven't seen in some form” previously.
- Christophersen agreed WACA leaders weren’t pursuing any new issues, “but we have some bills that we'd like to get” passed.
- “I'm going to be pushing my bill for out-of-state investors,” Wylie said, indicating she’d seen less pushback on the matter which drew some applause from WACA members who had advocated for the change at prior conferences. “We were involved in…some other issues that it didn't, didn't quite make it,” she commented. The ownership restriction had been intended to “protect the new industry here from big pharma and big tobacco buying up all the licenses and putting all of our own people out of business…that didn't happen, and it hasn't happened in any other state.” For this reason, Wylie planned “to push more with that and do the best I can.”
- “If we do see [federal] rescheduling and we see then the feds discuss an excise tax as we see for liquor, Washington enjoys the distinction having the highest cannabis tax in the country, if not the world…I think everybody in this room would agree that we’re at the point where if there is a federal excise tax, the tax rate in Washington will stifle this business here in a way that makes it uncompetitive...So how do we tackle this issue?”
- Keiser reiterated that an interstate approach to “harmonize the excise taxes” could help. “I think in the beginning we wanted to have a high tax to…discourage people from too much use of cannabis,” she said, utilizing taxation as a “deterrent.” She felt lawmakers had also “gotten really greedy because we get millions of dollars from the industry.” Keiser believed it would be politically acceptable to lower the excise tax if done in alignment with a change in federal law, or as part of an interstate commerce agreement.
- Christophersen brought up “prohibition-minded” members in the legislature, wanting to know how legislators might approach taxation. Wylie replied that she’d talked with WSLCB Board Chair David Postman and Director Will Lukela,“and I got a lot of support from my leadership on taking a more systems approach” to cannabis product taxes. She suggested different types of cannabis items should be “parallel to all of the new alcohol beverages that are coming on the market, and…the beer tax is different than wine tax is different from liquor tax.” Wylie hoped for a “big picture look at all of those taxes and figuring out how do they make sense? Some should stay and some should go down.” She thought that licensed producers “have it as bad as farmers in other industries and other products. Farming is probably the most difficult part of this business in terms of inputs, in terms of market forces, and a lot of other things and I think that we need to take a real good look at what each segment deals with, and what…that should mean in terms of tax policy.”
- WACA Deputy Director Brooke Davies asked “on behalf of our members…access to capital and removing the residency requirement has been WACA’s number one priority for the last six or seven years…and Senator Kaiser, [WA Senate LC] has passed it many times. So other than the upcoming session being a short 60-day session, what are some other challenges that you all see with that bill…why can't we get this done?”
- “I am perplexed” by opposition to the change, Keiser answered, as “that bill has been around long enough [for] people be comfortable with the idea for one thing. Secondly, I don't see the pushback on it on an institutional basis that you do on other changes.” She remarked how lawmakers “should do it, get it done.”
- Wylie felt a new concern in 2023 had been that social equity retailers would just be getting into the industry as established businesses, and “initially there was concern that those new licenses would be, might be a disadvantage if the more established businesses suddenly were able to bring in capital from out of state.” However, this had been “resolved before the end of the session; and so I think that there's going to be more unanimity and agreement and effort in that direction; because everybody is struggling with this issue.”
- “The legislature has a lot of things on its plate, in particular going into a short session. What do you think the top four issues that are going to dominate the legislature's time in 2024 are?”
- Keiser named the Climate Commitment Act as something lawmakers would “grapple with,” along with funding for retailers to install bollards outside their stores which she’d mentioned earlier.
- Wylie identified “housing and homelessness, mental health and addiction services—which are being decentralized and made community-based—which they should have been done 50 years ago, transportation, public safety, and some of the educational issues” as the areas most likely to dominate the attention of legislators.
- “What percentage of communications [were your offices receiving] related to cannabis from your constituents?”
- Keiser guessed it was very small, stating it was a “good thing because there are no complaints” from those “upset from our communities about the cannabis industry. That's a good thing.” Wylie agreed she heard more about public safety and federal issues than those related to legal cannabis.
- Participants were also interested in medical cannabis taxes, how interstate compacts could benefit them, and public health claims around cannabis.
- Fairwinds Owner Wendy Hull wanted to know about HB 1453, a bill to exempt registered medical cannabis patients from a 37% excise tax on medically compliant cannabis products, and what they could do to get the measure passed in 2024.
- “I haven't run into significant pushback,” established Wylie. However, “I know that the behind closed doors assumption: because it was decriminalized before the initiative, people that were in that space felt that they were already legal.” She’d also seen many legislators assume “there weren't that many medical patients and…that a lot of those medical cards were really recreational cards.” As a result, Wylie saw “no sense of how many people could be hurt by a very healthy recreational market,” along with the “fear…within that patient community of, of being registered of…being labeled.” She recognized many patients weren’t being helped by the current system, and considered easing the tax rate on patients in the database as “a very tiny amount of money." Wylie added “this story needs to be told, and I think that people that are doing well in the retail market could speak up and say that these people are important too…and that…we need to treat it like medicine. I think that would help.”
- Keiser said concerns remained in WA Legislature that “what's called the gray market…the unregulated market, the home grow version of the market…will not have the same level of oversight and standards that we have for the rest of the industry.” Her idea was a “phased approach would maybe be a little less dramatic for people but those two areas [were] probably the two stumbling blocks that I've seen in that area of medical cannabis.”
- Michael Dykstra, Mt. Baker Homegrown and Terpene Transit Owner, questioned the benefits of interstate compacts for licensees as he felt “working a deal out with Oregon or California doesn't do anyone any good. California doesn't want our product; we don't want California's product. I think what we need to be doing is looking at other states that don't have anything” suggesting “Washington could work a deal out with Idaho.”
- When Keiser questioned if cannabis was legal in Idaho, there was general agreement it wasn’t. Dykstra still felt other legal cannabis states already produced sufficient quantities of cannabis, meaning only agreements with state markets that wanted Washington cannabis would help existing licensees.
- Wylie understood that Oregon had “positioned itself…for a national market, or an international market.” She called for engagement with East Coast states, and then “work your…federal legislators hard because…that interstate commerce piece if we had that piece” as well as “the ability to write off…your costs tax-wise…it would make a world of difference.”
- Caitlein Ryan, Cannabis Alliance Executive Director, inquired about the role of lawmakers in interstate compacting. She indicated that trade group leaders had already reached out to the Washington State Office of the Attorney General and staff at the Governor’s office on the subject.
- “I think that it really is the business associations in the different states that represent the…cannabis businesses that should have a symposium on…what regulations would be most valuable to harmonize,” argued Keiser. She considered it less a sales issue for businesses, and more of a regulatory one, wanting trade groups to find consensus before bringing issues to the WA Legislature.
- Wylie called legislators a “policy body” that delivered laws to the executive branch, one kind of policy might direct a governor to negotiate on behalf of the State, in this case “the governor is the one who signs an interstate compact.”
- Micah Sherman, Raven Co-Owner and Washington Sun and Craft Growers Association (WSCA) Board Member, appreciated the focus on interstate commerce, but declared his was a small cannabis farm not trying to export to other jurisdictions. “I'm much more interested in our market,” he said, “crafting choices here in Washington State.” He felt there’d been a “tendency within the Democratic caucus to think of cannabis…as a potential public health villian that we need to control and contain.” Considering medical cannabis and the legal market’s “proven track record of keeping youth access to a minimum, how are we going to change the conversation around that narrative of needing to keep taxes high and access low in order to keep people safe from our products,” asked Sherman.
- Keiser said officials had just spent a couple years dealing with “what were called cannabinoids and the products that were showing up” at gas stations and stores “accessible to children, and did create some problems.” Passage of SB 5367 in 2023 was intended to remedy that, she said, but felt “any kind of drug, whether it's alcohol or psilocybin or fentanyl…there's going to be a segment of our population that will work to make it an illicit and dangerous situation, and we need to have oversight and we need to be aware of that development.” Keiser called cannabis industry stakeholders the “best advocates” for the benefits of regulation, “you know what's going on in the market before we do and you can step up and take it on if it's happening and shut it down and that's probably the best way for the industry to raise its profile with people who have concerns.”
- Wylie was convinced people “talking about what they enjoy" and "making it normal” would go a long way to show that cannabis consumption was common and not dangerous.
- Christophersen closed out the questions by welcoming Wylie to her leadership post on WA House RSG as “somebody who has cannabis as a centerpiece of your work and willingness to work with the industry, and we're really happy that you're there.”
- At the conclusion of the legislative panel, Christophersen gave Keiser a “Legislator of the Year” award along with the gratitude of WACA members.
- Christophersen mentioned that in the spring WACA board members had chosen to give Keiser and WA Senate LC Ranking Minority Member Senator Curtis King the award, but hadn’t had a chance to present it to Keiser before now. “So I'm going to take a minute…to tell you why our board chose these two as legislator of the year.”
- “Over the last several years,” Christophersen said King and Keiser had “worked collaboratively on every single cannabis bill,” aiding WACA members in lobbying for bills “in a professional, respectful way. And even with bills that are hard, their leadership has been really appreciated.” Christophersen commented that “legacy viewpoints” of cannabis persisted, but “having leadership at the Senate level that's willing to take forward these issues…has been incredibly appreciated by our members.”
- Keiser accepted the award and thanked the group, saying, “it means a lot…it is not easy work” to pass legislation, and “to be recognized every once in a while really encourages you.”
- Christophersen concluded the confab by thanking both lawmakers for their attendance and legislative leadership.
- The 60-day 2024 legislative session had been scheduled to begin Monday January 8th, and conclude on March 7th.
