WA Governor - Bill Action
(March 24, 2022)

Here are some observations from the Thursday March 24th Washington State Office of the Governor (WA Governor) Bill Action.

My top 3 takeaways:

• HB 1859, “Concerning quality standards for laboratories conducting cannabis analysis,” was signed into law by Governor Jay Inslee (audio - <1m, video).
  • Before signing the enrolled legislation, he explained that it transferred authority for cannabis laboratory accreditation standards to the Washington State Department of Agriculture (WSDA) “instead of the Liquor and Cannabis Board." The two agencies had “requested this bill,” which mandated the formation of an Interagency Coordination Team (ICT), Inslee remarked. He stated that this "shift will help the state meet potency and food safety standards for cannabis products."
  • As he signed the measure into law, Inslee thanked Representative Shelley Kloba, the bill sponsor, and Senator Steve Conway, who sponsored the Washington State Senate (WA Senate) companion bill.

• The request legislation had no visible opposition and was passed almost unanimously by lawmakers, unique among cannabis-focused bills during the 2022 session.
  • The idea for HB 1859 came out of the Cannabis Science Task Force (CSTF), where a draft of the request bill was discussed in October 2021. CSTF staff briefed lawmakers about the effort that November and task force members included the concept among recommendations in their legislative reports.
    • The law enabled staff from WSLCB, WSDA, and the Washington State Department of Health (DOH) to cooperate via the ICT, which would be responsible for defining lab standards to be encoded in rule by WSDA policy staff while also determining criteria to be implemented in a Washington State Department of Ecology (DOE) lab accreditation program.
    • WSLCB staff talked about the draft request bill in June, September, October, and November of 2021. During session, the bill was addressed during legislative updates on January 18th, February 15th, February 22nd, March 1st, and March 8th.
  • The first hearing on the proposal was on January 18th in the Washington State House Commerce and Gaming Committee (WA House COG) whose members recommended passage on January 28th. No one signed up to speak against the measure in any of its public hearings, and no public testimony was offered during the final hearing by the Washington State Senate Ways and Means Committee (WA Senate WM) on February 24th.
  • The law was amended before being passed by Senators on March 4th.
    • References to ‘marijuana’ in the language were changed to ‘cannabis’ to comport with the passage of HB 1210.
    • Funding for ICT activities was removed as a standing appropriation from the Dedicated Marijuana Account, and instead the group’s work would be funded through budget requests by the participating agencies.
    • These changes were given final concurrence and passage by the House on March 8th. Amongst three votes by legislators, the only people to vote against enactment were:
      • Representative Vicki Kraft
      • Senator Jim Honeyford
      • Senator Jim McCune
  • Compared to other cannabis-related bills—including high priorities of WSLCB leadership—HB 1859 received far less criticism and legislative scrutiny during the session. 
    • HB 1668, “Expanding regulatory authority over cannabinoids that may be impairing and providing for enhanced product safety and consumer information disclosure about marijuana products,” the other request bill from WSLCB, was far more contentious as several iterations of the bill were considered and rejected by legislators over the arguments of agency officials.
    • Several recommendations from the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) also failed to be passed by the legislature, although a $200 million reinvestment fund for communities disproportionately impacted by the war on drugs was added to the 2022 supplemental operating budget.
    • Legislation for instances of armed cannabis retail robberies that would have added a sentencing enhancement and reporting requirement was unsuccessful despite a series of robberies. Those crimes continued in the weeks following the end of the session, escalating to the point where three people lost their lives.

• With Inslee’s signature, the enrolled bill became session law via the Washington Secretary of State and would take effect 90 days after the conclusion of the 2022 session on June 9th.
  • WSDA officials were required to begin incorporating cannabis lab standards into Title 16 of the Washington Administrative Code (WAC) through rulemaking processes set out in Part III of the Administrative Procedures Act (APA) as the standards were developed by the ICT.
    • As a larger agency than WSLCB with a wider scope of responsibilities, WSDA had significantly more active rulemaking projects at publication time. While WSLCB rulemaking typically takes place during board meetings, WSDA staff set public hearings for their projects as needed and their hearings only include relevant program staff. Public engagement in WSDA rule development meets APA minimum standards, but WSDA officials haven’t adopted dedicated outreach events like WSLCB Listen and Learn Forums nor Deliberative Dialogues.
    • At publication time, the department had cannabis-related rulemaking efforts underway for the hemp program and hemp extract certification.
    • Find out more from WSDA frequently asked questions on rulemaking.
  • WSDA, WSLCB, and DOH leaders would be required to assign existing staff with relevant scientific expertise or hire new staff to act as representatives or administrative support staff for ICT. Staffing needs were outlined in the supplemental budget requests for the participating agencies
    • The WSDA request anticipated 5 full-time equivalent (FTE) staff.
    • The WSLCB request anticipated 2.5 FTEs, two chemists and half of a Washington Management Service (WMS) staffer’s time.
    • The DOH request anticipated 2.9 FTEs during the first biennium, and 5.4 in the next. Specifically, the department would hire a chemist, an epidemiologist, a microbiologist, a Health Services Consultant, and a WMS staffer.
  • On March 23rd, Senator Karen Keiser raised the possibility of having the ICT act as “a launching point" for state agencies to weigh in on other potential cannabis issues, specifically referencing a cannabis commodity commission. She wondered about the value of an ICT “seal of approval” to indicate an idea had been vetted by multiple state cannabis regulators.

Here are some observations from the Thursday March 24th Washington State Office of the Governor (WA Governor) Bill Action.

My top 3 takeaways:

• Governor Jay Inslee added his signature to ​​SB 5796, "Restructuring cannabis revenue appropriations," commenting on benefits the changes would bring over existing law (audio - <1m, video).
  • He promised the legislation passed by lawmakers provided “consumers greater transparency about how the state distributes cannabis revenues.” Additionally, “the state will distribute more funding to counties and cities as the revenue grows,” said Inslee.
  • Thanking the bill sponsor, Senator Rebecca Saldaña, Inslee affixed his signature to SB 5796.

• The legislation followed a bumpy course to the Governor’s desk and was briefly changed into a legislative study before the Washington State House of Representatives (WA House) voted to include more limited revisions to existing law.
  • The original bill proposed a variety of changes to a statute suggesting non-binding appropriations from the dedicated marijuana account (DMA). The standing appropriations were initially based on proposed spending from cannabis revenue approved by voters in Initiative 502, covering areas like health care and prevention programs; research; enforcement; and disbursements to local governments. Though the exact language and amounts were non-binding—and had been modified nearly every year by lawmakers since enactment—much of the original subject matter remained.
    • The statute had been cited as justification for spending from the DMA for specific agencies and purposes in the biennium operating budget and supplemental budgets.
  • SB 5796 received a policy hearing in the Washington State Senate Labor, Commerce, and Tribal Affairs Committee (WA Senate LCTA) on January 19th, and members recommended a proposed substitute on January 26th.
    • See the first bill analysis and fiscal note.
  • Ahead of a fiscal hearing in the Washington State Senate Ways and Means Committee (WA Senate WM) on February 5th, a comparison chart for Cannabis Revenue Appropriations was produced, as well as two revised fiscal notes. That committee recommended another proposed substitute that restructured some suggested distributions on February 7th.
  • The WA Senate WM proposed substitute was debated and amended before being passed as an engrossed second substitute by senators 41-7 on February 14th.
  • In the WA House, the Washington State House Appropriations Committee (WA House APP) was the only committee to host a public hearing on SB 5796 on February 22nd. All testimony was supportive, although a significant number signed in as opposed. On February 28th, members considered several changes, but adopted a striking amendment to strip out changes to proposed appropriations in favor of a Joint Legislative Audit and Review Committee (JLARC) review “of the appropriation and expenditure of cannabis revenues and report to the appropriate legislative committees by July 1, 2023.”
    • Read a revised comparison of cannabis revenue appropriations, and the written comments submitted for the WA House APP hearing.
  • On March 4th, representatives restored many of the bill’s revisions to the suggested spending. The members made a terminology change reflecting HB 1210 before adopting a striking amendment debated at length and passing the measure 78-18.
    • In addition to more limited appropriation reforms, the revised language incorporated a JLARC “examination on the appropriation and expenditure of these funds to evaluate: How these funds have been appropriated and expended; whether the appropriations and expenditures are consistent with the provisions of RCW 69.50.540; and whether information related to the appropriations and expenditures is readily available to the general public. The report shall include options for increasing the transparency and accountability related to the appropriation and expenditure of cannabis-related revenues.”
    • HB 1210 also renamed the DMA the “Dedicated Cannabis Account.”
  • Days later, on March 7th, senators voted in concurrence with the reorganization and changes in SB 5796 by a vote of 37 to 12. According to the final bill report, the following programs and amounts were impacted:
    • WSLCB had received $1.25 million “for administration of the state Uniform Controlled Substances Act (UCSA)” under existing law, but would now be allotted $12.5 million.
    • The Washington State Department of Health 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 had been allotted $808,000 annually “for administration of the marijuana authorization database” as well, with the law lowering that marginally to $800,000.
    • The Washington State Department of Commerce received $1.65 million annually “to fund the cannabis social equity technical assistance grant program,” but that amount was raised to $3 million. The department was also getting $163,000 in fiscal year (FY) 2022 and $159,000 in FY 2023 to “establish the cannabis social equity roster of mentors,” and this amount was increased to $200,000.
    • The University of Washington (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 Washington State University (WSU) researchers were budgeted a minimum amount of $1,021,000 and $681,000, respectively, for cannabis research. Under the revised language, research dollars were decreased to $300,000 and $175,000.
    • The Washington Office of the Superintendent of Public Instruction was 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 instead.
    • The Washington State Department of Ecology was allotted $276,000 in FY 2023 “for accreditation of marijuana product testing laboratories,” but would instead be given $290,000 for the year.
    • The Washington State Department of Agriculture was budgeted $627,000 in FY 2023 “for marijuana pesticide testing.” Under SB 5796, the department gets $635,000 instead.
    • Appropriated amounts to the Washington State Patrol Drug Enforcement Task Force and the Washington State Institute for Public Policy to make “cost-benefit evaluations and produce reports regarding the legalization of marijuana” were unchanged. 
    • Distributions to the state Basic Health Plan Trust Account, administered through the Washington State Health Care Authority, had been based on cannabis revenue remaining after the previously identified appropriations, and would increase from 50% to 52%.
    • Changes in DMA distributions to local governments was a bit more complex.
      • Under existing law, “if marijuana excise tax collections from the previous FY exceed $25,000,000, then the Legislature must appropriate an amount equal to 30 percent, but not more than $15,000,000 in FYs 18-21 or $20,000,000 in succeeding FYs, of all marijuana excise taxes” for distribution to local governments. This was further qualified with a requirement that 30% go to areas “where licensed marijuana retailers are physically located—each jurisdiction must receive a proportional share based on total revenues generated and taxes collected in such jurisdiction” and 70% go to areas “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.”
      • This arrangement was simplified by SB 5796. Of the cannabis revenue remaining, 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.”
    • Rather than monies remaining after other appropriations going into the state general fund, a set 32% would be deposited there annually.

• Inslee’s signature ratified the bill as session law for the Washington Secretary of State to formalize in statute, and changes would take effect 90 days after the conclusion of the 2022 session on June 9th.
  • The supplemental operating budget, SB 5693, which formally allocated DMA money for the entities recommended in RCW 69.50.540, was signed by Inslee on March 31st.
    • Find out more about the budget:
      • Conference Report 
      • Summary
      • Statewide Summary Comparing As Passed Senate, As Passed House, and Conference Proposal
      • Agency Detail Comparing As Passed Senate, As Passed House, and Conference Proposal
      • Budget Outlook
  • JLARC officials were required to submit their review to the legislature by December 2023, and were expected to add materials to their planned reports webpage.