WA Senate LC - Committee Meeting
(January 22, 2024)

Here are some observations from the Monday January 22nd Washington State Senate Labor and Commerce Committee (WA Senate LC) Committee Meeting.

My top 4 takeaways:

• A briefing on SB 6271, “Modifying the cannabis excise tax to consider THC concentration,” was provided by Session Analyst Madeline Ralstin (audio - 1m, Video - TVW).
  • At time of publication, the state levied a 37% excise tax on cannabis, in addition to local sales and use taxes. In 2019, the Washington State Liquor and Cannabis Board (WSLCB) organized a legislatively mandated  Potency Tax Work Group whose members looked into “varying the marijuana excise tax rate based on product potency.” A feasibility study from BOTEC Analysis was followed by a final report from the work group concluding the idea was “not feasible at this time in Washington State.” The document also indicated “group members from the public health community were in favor of a tax structure that would discourage consumption of high potency cannabis, but did not have confidence that this tax would guarantee those outcomes.”
  • Ralstin described the effects from the bill analysis:
    • Requires the Liquor and Cannabis Board (LCB) to collect data on cannabis product sales and submit a report to the Legislature by November 14, 2025.
    • Requires LCB to formulate a recommended approach and implementation plan for modifying the cannabis excise tax and submit a report to the Legislature by September 18, 2026.
  • The prepared fiscal note indicated an initial cost of $63,600 in fiscal year (FY) 2025, and $7,200 in the following fiscal bienniums for “400 vendor hours to modify the agency's Cannabis Central Reporting System (CCRS),” as well as an “ongoing annual subscription for additional cloud storage.”

• Chair Karen Keiser expressed her concern over the availability of cannabis concentrates and suggested her sponsorship of the measure could lead to tax changes that “disincentivize” their use (audio - 1m, Video - TVW).
  • “I think we do have an issue to deal with,” Keiser told her colleagues, “with the high THC [tetrahydrocannabinol] products that have become available in liquid form…and dabs and so forth.” She claimed the items were “not the old cannabis" produced as a crop, “they're more of a chemical device.”
  • Keiser felt the topic had “become somewhat fraught in terms of possible health effects,” but believed there was potential to “adjust the current approach to cannabis taxation” while discouraging concentrate use “with a higher tax, and to be revenue neutral by lowering the tax on what we would call normal products, not high THC products.”
  • Keiser expected SB 6271 was “destined for Ways and Means,” the Senate committee most experienced in fiscal issues, “but I thought it would behoove us to hear a little bit.”
  • Keiser spoke about the topic, among others, with Washington CannaBusiness Association (WACA) during their legislative symposium in December 2023.

• Members of cannabis trade associations and a public health representative testified favorably about how the bill would help inform legislators’ policymaking on cannabis taxes to better protect public health.
  • Vicki Christophersen, WACA Executive Director and Lobbyist (audio - 1m, Video - TVW)
    • “We've been talking for a while about the need to have a good look at our tax system,” said Christophersen, who thought reforms could be undertaken “for a variety of reasons. Those that you outlined, we support.” She agreed the kind of product sale data requested in the legislation was “exactly the kind of data we need to even be able to do the analysis to determine what the appropriate sort of ranges of taxation should be.” She felt using tax rates to regulate sales was “a far better approach t[han] prohibition, which does not work.”
  • Caitlein Ryan, Cannabis Alliance Executive Director  (audio - 1m, Video - TVW)
    • Ryan stated her organization was “in support of the concept of this bill,” but recommended some modifications. “There was a version of the study in 2019,” and Ryan requested “rather than repeating that…theoretical inquiry we recommend that an allocation be given to the Department of Commerce for an analysis based on using detailed data to model a variety of options.”
    • She added that she’d “be remiss if I did not remind the committee that, at 37%, we are by far the most highly taxed industry in the country” for legal cannabis. Ryan said the goal should be “deterring people from buying these types of products, rather than just these types of products within the regulated market.”
  • Megan Moore, Washington State Public Health Association (WSPHA) Executive Director (audio - 1m, Video - TVW)
    • Moore agreed with the need for the legislation “as a means to reduce access to these products for youth and young adults” that had reported “higher rates of using high potency THC products, like waxes, shatters, dabs, and vapes.” She suggested the public health issues had “actually been studied well, including in Washington state.” Moore argued this research showed “in an undeveloped brain, which is under 25, the frequent use of these products can trigger outcomes like addiction, cannabis hyperemesis syndrome, anxiety, depression, and long-term…mental health diseases.”
      • While many researchers have suggested development in regions of the brain associated with decision making continue developing until approximately the age of 25, a 2022 article in Slate noted “one especially large study showed that for several brain regions, structural growth curves had not plateaued even by the age of 30,” and other studies had found “progressive volumetric changes from ages 15–90 that never ‘level off.’”
    • Moore supported policies to reduce youth access, “especially if they are revenue generating for substance use prevention work.” She promised to “work with the committee and the industry on any option that would protect public health and safety.”
    • The Washington State Joint Legislative Audit and Review Committee (JLARC) released a final staff report on Appropriations and Expenditures of the Dedicated Cannabis Account on January 4th which found between FY 2015 and FY 2023:
      • $283,667,545, or about 9% of all cannabis revenue, went to “Prevention, education, & treatment” programs.
      • $8,375,112, or 0.3% of cannabis taxes, were allocated for research.
  • In addition to three people testifying in favor, four signed in to support the bill (Testifying, Not Testifying).

• Two cannabis industry stakeholders warned against passage, unconvinced adjusting tax rates was any more feasible today than when the state last looked at the approach as a means to improve health outcomes.
  • Ezra Eickmeyer, Producers Northwest Founder (audio - 1m, Video - TVW)
    • Eickmeyer regarded the bill as a second pass at what had been studied in 2019, “and LCB basically said ‘it's not feasible to do a graduated tax system.’ But more importantly, I honestly just don't see it working.” He agreed that youth cannabis use was “still a pretty big issue…we have not tackled as a state by any stretch of the imagination.”
    • Eickmeyer favored strategies for getting “teenagers, young people to quit experimenting with drugs and alcohol in their teenage years.” But he argued there was an “illicit market out there that can make any of the products we can make, and for cheaper at times,” and going to graduated tax rates “just drives up the price for some of these products” in one of those markets.
  • Lukas Hunter, Harmony Farms Director of Compliance and Government Affairs (audio - 1m, Video - TVW)
    • Hunter remarked that the “BOTEC study that was delivered in December 2019” determined it “wouldn't be economically feasible for the State to put…the new taxation structure into place, and the public health community did not have confidence it would actually guarantee the desired outcome.”
  • Along with three people signed up to testify against the legislation, eight individuals signed in opposed to the bill. Sarah Ross-Viles, Seattle and King County Public Health Youth Health and Marijuana Program Manager, also signed in to testify as ‘other,’ but wasn’t available when called by staff (Testifying, Not Testifying).

Here are some observations from the Monday January 22nd Washington State Senate Labor and Commerce Committee (WA Senate LC) Committee Meeting.

My top 4 takeaways:

• Senior Staff Coordinator Susan Jones gave the background on SB 6220, “Concerning high THC [tetrahydrocannabinol] cannabis products” (audio - 1m, Video - TVW).
  • The measure was introduced as a companion bill after HB 2320, which had a public hearing in the Washington State House Regulated Substances and Gaming Committee (WA House RSG) on January 18th. At time of publication, that measure was scheduled for executive session on Monday January 29th.
  • Jones referred to the bill analysis, and relayed that the legislation:
    • Provides legislative intent related to high-THC cannabis policy and funding.
    • Requires the Department of Health to develop optional training for retail cannabis staff about health and safety impacts of high THC cannabis products.
    • Increases the minimum legal age of sale of cannabis products with a THC concentration greater than 35 percent, to be age 25, with an exception for qualifying patients and designated providers.
    • Requires, subject to funding, the University of Washington Addictions, Drug & Alcohol Institute to develop and implement guidance and health interventions for health care providers and patients at risk for developing serious complications due to cannabis consumption and to provide reports to the Legislature.
  • After the committee meeting began, a revised fiscal note was posted with estimates from the University of Washington (UW) that costs under SB 6220 for six full time equivalent (FTE) staffers, as well as “professional service contracts,”“travel,” and “goods or other services,” were expected to run up to $2,955,000:
    • $655,792 through fiscal year (FY) 2025
    • $1,315,584 between FY 2025 and 2027
    • $982,688 between FY 2027 and 2029

• Senator Jesse Salomon described his intentions in sponsoring the bill, aiming to reduce the negative health consequences for minors and young adults through education and intervention strategies, along with restricting sales of cannabis concentrates (audio - 2m, Video - TVW).
  • Calling SB 6220 the "second crack at this concern that I've had," following another companion bill he sponsored in 2020, Salomon shared his concern over the “real specific issue of youth using high potency cannabis and having mental health ‘slash’ schizophrenia psychosis triggering.”
    • Salomon spoke about his work with his House colleague for the 32nd Legislative District, HB 2320 prime sponsor Representative Lauren Davis, at a UW ADAI symposium on “High-[tetrahydrocannabinol] THC Cannabis in Legal Regulated Markets,” in September 2022.
  • Salomon told committee members he could “remember back in the day, there was some video from the 50s, what was it—Reefer Madness—that I thought was absolutely ridiculous showing, like, somebody smoking pot and getting high and losing their mind.” He compared the effects of cannabis as portrayed in the film, “when the THC [tetrahydrocannabinol] concentrations were…a couple, few percent - to this day where you can buy a hundred percent THC concentration.” Salomon raised the issue of the mental illness depicted in the film, and argued “you do have that effect on the high end.”
    • In addition to being regarded as both a camp classic, and among the worst films of that era, the film—an exploitation melodrama purporting to be an amalgam of real events—was made as educational material aimed at parents, whose original titles included ‘Tell your Children.’
  • While his 2020 legislation to limit cannabinoid content “didn't go anywhere...out of that was sort of a bigger stakeholdering effort that you're seeing the results of here,” Salomon said. Referring to some of the effects of SB 6220, he added, “I’m not trying to make the statement that marijuana is bad for everybody. I'm just trying to protect kids. There's evidence that this is happening, and I think we need to be responsible and move this forward.”
  • Vice Chair Steve Conway inquired whether the bill had been developed in consultation with officials at the Washington State Liquor and Cannabis Board (WSLCB). “I have not specifically,” Salomon said, but insisted there’d been a “broader stakeholdering process that you're going to hear about” (audio - 1m, Video - TVW).
    • Conway appreciated Salomon’s effort, but noted that the legislature had recently re-defined cannabis products in a law passed in 2023, remarking that it had “been a critical issue here of evaluating products and concentration” for the committee. Chair Karen Keiser agreed lawmakers had been looking at many new product types. Salomon suggested that during Initiative 502 (I-502), campaign voters “thought we were legalizing a plant, and now there's been all these…lab-created products that I didn't even know were gonna come on the market.”
  • Keiser commented that she’d heard anecdotes, but not “any verifiable clinical evidence,” and related this to difficulties in conducting cannabis research. Salomon said he’d reviewed a “comprehensive academic study from Europe” on the topic, which Keiser asked him to forward to the committee (audio - 1m, Video - TVW).
    • Following the hearing on Wednesday January 24th, the Seattle Times Editorial Board published an opinion which lambasted Keiser for not being familiar enough with the research.
    • Keiser is one of the most engaged senators leading cannabis policymaking in Washington state and had publicly spoken about the need for more cannabis research in several events over the years:
      • In 2022, she sponsored a bill regulating hemp derived cannabinoids and chaired a work session that May around research on vaping cannabinoids where she thanked the presenter from Portland State University (PSU) for tracking a cannabinoid market she acknowledged was “developing…every day.”
      • In 2023, she discussed the need for more cannabis research in a hearing on a bill to establish a Washington State Cannabis Commission, and talked with industry members about the bill.
      • She encouraged WSLCB leaders to set up “an internal science advisory committee that includes UW and WSU cannabis researchers,” which was later formed as the WSLCB Cannabinoid Science Work Group.

• Public health interests testified to the expected benefits of developing new guidance materials for medical practitioners for treating or intervening in the use of high THC products, as well as raising the purchase age to 25.
  • Testimony included most of those who offered remarks in support of HB 2320.
  • Megan Moore, Washington State Public Health Association (WSPHA) Executive Director (audio - 1m, Video - TVW)
  • Denise Walker, UW Research Professor and Innovative Programs Research Group Director (audio - 1m,  Video - TVW)
    • Walker mentioned her work with the Washington State Health Care Authority Prevention Research Subcommittee (WA HCA PRSC) and the 2020 consensus statement they produced on health effects of cannabis concentrates. She then brought up “another recently published on Lancet Psychiatry revealed strong evidence that high potency THC increases risk for addiction to cannabis and for the development of psychosis, particularly for youth and young adults.” She asserted regions of the brain which had been shown to handle “planning and decision making, and making good decisions continues to develop into our mid-to-late twenties.”
  • Beatriz Carlini, UW ADAI Research Scientist, ADAI Cannabis Education and Research Program (CERP, audio - 1m,  Video - TVW)
    • Referring to “survey data from 2700 Washington State cannabis consumers,” she said that “one out of three people” reported reactions she considered to be harmful, such as “panic attacks, fainting, vomiting, hallucinations, psychosis, and flashbacks.” Close to a fifth sought some form of help, she noted. Carlini believed this had come about because Washington officials had “not actively curbed cannabis products containing 60 to 90% THC,” which “should not be consumed by people under 25 years of age.” She hoped the bill would lead to “health programs and clinical guidelines to prevent psychosis among consumers.”
      • While the survey didn’t differentiate health impacts based on age or product type, questions about adverse effects were expansive, covering consumers reporting nausea, dizziness, dissociation/depersonalization, or any other “unintended adverse or negative health effect(s).”
    • Keiser asked for clarification on the mission of UW ADAI (audio - <1m, Video - TVW).
  • Mary Lou Dickerson, Former Washington State Representative (audio - 2m,  Video - TVW)
    • An original I-502 supporter, Dickerson felt cannabis could be “very, very dangerous, especially to a population I care very much about, and that's adolescents and young adults.” She referred to the PRSC consensus statement as evidence of the “behavioral health, mental health dangers, and I'm asking you to support this common sense approach…to restricting sales.”
  • Linda Thompson, Washington Association for Substance Misuse and Violence Prevention (WASAVP) Board Member (audio - 1m,  Video - TVW)
  • Beth Ebel, UW Pediatrician and Washington Chapter of the American Academy of Pediatrics Board of Trustees President  (audio - 2m, Video - TVW)
    • Telling the legislators there “actually is strong evidence now" of health risks from concentrates, Ebel insisted, “we don't know these high potency products…what's in them half the time.” She said some of the studies in Washington had “shown high concentrations of heavy metals, pesticides being that are getting cooked down into this…and the reported amounts of these concentrated products are really not something that the industry has standardized.” She disagreed that the bill amounted to a “prohibition” on concentrates, which she considered “a totally new, untested product” which had “known health effects for the growing brain.”
    • Keiser asked about the appropriateness of the age restriction in SB 6220. Ebel responded that for those under 25, she wanted a “ban of these sales because that's what the development information suggests for the growing brain,” but she also had “concerns about the safety of these products writ large, and that needs to be addressed” (audio - 1m,  Video - TVW).
      • At time of publication, concentrates in licensed markets were required to undergo quality control testing which checked for levels of contaminants such as pesticides, while medically compliant cannabis products required testing for heavy metals.
      • By way of contrast, hemp cannabinoid products, which the legislature sought to limit through 2023 legislation, remained largely unregulated, were not required to be tested, and were accessible to minors in Washington state via online sales and mail order delivery. Some believe a prohibition on concentrate sales to 21-25 year olds will drive those consumers to hemp cannabinoid markets.
  • Seven people signed up to testify in favor, and 23 individuals signed in to support the measure (Testifying, Not Testifying).

• Several speakers from the cannabis sector and a consumer advocate didn’t see the product restriction aspect of the bill as helpful in reducing youth or young adult cannabis use.
  • Testimony included most of those who offered remarks opposed to the bill in the House.
  • Ezra Eickmeyer, Producers Northwest Founder (audio - 1m, Video - TVW)
  • Lukas Hunter,Harmony Farms Director of Compliance and Government Affairs (audio - 1m, Video - TVW)
    • Hunter hadn’t seen sufficient engagement with cannabis stakeholders before the legislation was introduced, and wanted officials to do “a much better job, instead of allocating funds towards” only UW ADAI studies. He noted, “the JAMA [Journal of the American Medical Association] network looked at 63 million participants [between 2003 and 2017, and] didn't find an association between cannabis consumption and uptick in” schizophrenia.
  • Bailey Hirschburg, Washington Chapter of  National Organization for the Reform of Marijuana Laws and consumer advocate on the WSLCB Public Education Work Group (audio - 1m, Video - TVW)
  • Vicki Christophersen, Washington CannaBusiness Association (WACA) Executive Director (audio - 1m,  Video - TVW)
  • Caitlein Ryan, The Cannabis Alliance Executive Director (audio - 1m, Video - TVW)
  • Micah Sherman, Raven Co-Owner and Washington Sun and Craft Growers Association (WSCA) Board Member (audio - 1m, Video - TVW)
    • “This bill relies on a non-standardized, self-selected, industry-performed testing program to create the threshold that it determines is safer or unsafe,” Sherman explained. He didn’t think this approach was “based in science…and it's completely inadequate to build the foundation that this bill seeks.”
      • The absence of laboratory standardization of THC testing was highlighted as a concern in the report from the WSLCB Cannabis Potency Tax Work Group in 2019. Following its publication, WSLCB took action to close a lab for falsifying THC results.
      • Since early 2023, Washington State Department of Agriculture (WSDA) staff have been leading on rulemaking and development of standards for THC measurement which were expected to be finalized later in 2024.
    • Besides not agreeing with the assessment of proponents, he regarded SB 6220 as too “underdeveloped in its conceptualization to actually try to achieve its claims.” He called the measure a “messaging type bill, and we would suggest that it die in the committee.”
  • Joshua Rutherford, Dutch Blooms Owner (audio - 1m, Video - TVW)
    • Feeling like his business was already “struggling, mostly due to regulations,” Rutherford called out results in California supposedly finding “testing methods for current cannabis was off by almost 10 points” and wanted a more reliable testing process.
    • Rutherford was skeptical there were the same risks of byproduct contamination in “solventless” concentrates which didn’t utilize “butane, alcohol, all sorts of things to extract.” He worried that “those heavy metals that are left behind, those are a big issue” and that studies on test results were “totally inaccurate” with regards to measuring the compound. Rutherford wanted changes so that solvent-free concentrate products were separated from those restricted under the bill.
  • Nine people signed up to testify against the bill, and 13 individuals signed in opposed (Testifying, Not Testifying).
  • The committee had scheduled an executive session on Tuesday January 30th to consider amendment and passage of the bill ahead of the policy committee cutoff. At publication time, there were no potential amendments.