WA Governor - Bill Action
(May 4, 2023)

Here are some observations from the Thursday May 4th Washington State Office of the Governor (WA Governor) Bill Action.

My top 3 takeaways:

• SB 5069, "Allowing interstate cannabis agreements,” positioned Washington as the third state to allow planning for the agreements in the event they were allowed by federal officials.
  • Previously, legislatures in Oregon and California adopted bills that would allow for the execution of interstate cannabis trading compacts should such commerce be authorized by changes to federal law, or by the U.S. Department of Justice.
    • While separate policies, cannabis compacts between the Washington State government and sovereign tribal governments have been used since 2015 to allow for mutual trade and harmonized regulation of cannabis commerce; and could be considered a precursor to agreements between state governments.
  • First heard in the Washington State Senate Labor and Commerce Committee (WA Senate LC) on January 10th, the bill was recommended for passage without changes on January 17th. The Washington State Senate Rules Committee (WA Senate RULE) put the measure on the chamber’s calendar on January 25th, which led to the full senate voting to pass the bill as drafted on March 1st.
  • In the Washington State House of Representatives (WA House), SB 5069 was given a policy hearing by Washington State House Regulated Substances and Gaming Committee (WA House RSG) members that began on March 20th and concluded on March 21st. The committee passed the bill without changes on March 23rd, and it was approved by the chamber on April 6th.
    • Though unchanged up to this point, representatives adopted an amendment described as “Correct[ing] a scrivener's error so that statutes are correctly identified when referencing rules of the Department of Agriculture and the Department of Health.” Because of this revision, Senators had to vote again to concur with the amendment, which they did on April 14th.
    • The modest cost projected for SB 5069 meant it didn’t receive hearings by fiscal committees in the legislature.
  • The final bill report published on March 28th summarized the proposal’s effects:
    • Subject to a contingent effective date, the Governor is authorized to enter into an agreement with another state or states for the purposes of: (1) cross-jurisdictional coordination and enforcement of cannabis-related businesses authorized to conduct business in Washington, the other state, or both; and (2) cross-jurisdictional delivery of cannabis between Washington and the other state. 
    • An agreement must ensure that enforceable public health and safety standards are met, and include a system to regulate and track the interstate delivery of cannabis. Any cannabis delivered into Washington, prior to sale to a consumer, must be tested in accordance with rules adopted by the Washington State Department of Health and the Washington State Liquor and Cannabis Board (LCB). The cannabis must also be packaged and labeled in accordance with Washington law and the LCB's rules. An agreement must ensure that applicable taxes on the sale, delivery, and receipt of cannabis are collected.
    • In accordance with an agreement entered by the Governor, a cannabis producer, processor, researcher, or retailer licensed in Washington by the LCB may deliver cannabis to a person located in and authorized to receive cannabis by the other state, and may also receive cannabis from a person located in and authorized to export cannabis by the other state. 
    • If either of the two conditions arise causing the bill to take effect, then the LCB must provide written notice of the effective date of the bill to affected parties, the Chief Clerk of the House of Representatives, the Secretary of the Senate, the Office of the Code Reviser, and others deemed appropriate by the LCB. The LCB must also provide written notice of statutory changes necessary to authorize the sale, delivery, and receipt of cannabis in accordance with an interstate cannabis agreement to the Governor and the appropriate committees of the Legislature. Last, the LCB must adopt rules as necessary to authorize the sale, delivery, and receipt of cannabis in accordance with an interstate cannabis agreement.

• Governor Jay Inslee signed the measure alongside supporters and spoke to the impact the bill would have on preparing the state for national cannabis reforms (audio - 2m, video).
  • Presented with the bill as passed by the legislature, Inslee said it would allow the governor to “enter into interstate cannabis agreements if the federal government legalizes” the plant or on issuance of a DOJ “opinion or memorandum that allows or tolerates cannabis to go across state lines.” Should this happen, he indicated the bill would help Washington’s “well regulated cannabis industry remain competitive” while maintaining product standards. Thanking bill sponsor Senator Ann Rivers, who wasn’t in attendance, Inslee joked about needing “a Pony Express to go east to get the message to Washington, D.C." Joining him were:
    • Bill co-sponsor Senator Karen Keiser
    • The Cannabis Alliance Executive Director Burl Bryson, Board President Caitlein Ryan, and Lobbyist Alan Ralston.
    • Washington CannaBusiness Association (WACA) Deputy Director Brooke Davies
      • Joseph DuPuis, WACA Trustee and Doc and Yeti Urban Farms Owner, entered immediately after the signing.

• Having been made session law, the measure wasn’t anticipated to have an immediate effect, though federal reforms which could allow interstate trade had been introduced in the U.S. Congress.
  • A legislative overview explains that after Inslee’s signature “bills go to the Secretary of State who assigns a session law chapter number.” Once a session law has been incorporated into statute, it takes full effect 90 days after final adjournment of the session in which it is enacted, meaning the bill would take effect on July 23rd. However, as rulemaking by WSLCB “necessary to authorize the sale, delivery, and receipt of cannabis” was mandated for the compacts, that process may take additional time to finish.
    • According to April 12th comments by Director of Policy and External Affairs Justin Nordhorn, the agreements were gaining attention from the Cannabis Regulators Association (CANNRA). He’d noted there was some interest from CANNRA members in using tax stamps, a policy Washington applied to imported cigarettes, as a mechanism to normalize cannabis trade between states.
    • WSLCB staff were clear on May 2nd that their rulemaking schedule was filling up, with opened projects put on hold; it was uncertain how high rulemaking for not-yet-authorized interstate agreements would be prioritized. 
  • At time of publication, federal leaders weren’t close to passing any cannabis legislation that would trigger the law’s effects. However, bipartisan legislation was introduced in April known as the Preparing Regulators Effectively for a Post-Prohibition Adult Use Regulated Environment (PREPARE) Act to establish “a fair, honest and publicly transparent process for the federal government to establish effective regulations to be enacted upon the termination of its 86-year prohibition of cannabis.” 
    • Another bill, the ​​“Small and Homestead Independent Producers (SHIP) Act,” was championed by the National Craft Cannabis Coalition and introduced in September 2022 to allow some producers and processors to “ship and sell marijuana or a marijuana product to an individual” in another state if possession was federally legalized “using the Postal Service or any private or commercial interstate carrier.” At time of publication, the SHIP Act hadn’t been re-introduced in the 118th Congress.
    • Members of Congress had also re-introduced the SAFE Banking Act in both chambers, although as drafted it wouldn’t allow for interstate trade agreements.

Here are some observations from the Thursday May 4th Washington State Office of the Governor (WA Governor) Bill Action.

My top 3 takeaways:

• HB 1563, "Concerning arrest protections for the medical use of cannabis" rather than a court defense of the behavior, had been previously established for some patients before a bill protecting any adult authorized to use cannabis by their doctor arrived at the Governor’s desk.
  • Voters adopted medical cannabis Initiative 692 in 1998 which established an affirmative defense recognized by Washington State Courts. However, possession of cannabis or cultivation of plants as medicine by patients with a valid doctor’s authorization wasn’t legal behavior and patients were subject to arrest until passage of SB 5052 in 2015. That bill made a series of changes to the medical cannabis program, such as providing protection from arrest for patient and caregiver activities, provided they’d registered in a patient authorization database maintained by the Washington State Department of Health (DOH).
    • In February 2021, legislators heard an earlier draft of the bill, HB 1105, which was gradually progressed, making it as far as the Washington State Senate Law and Justice Committee (WA Senate LAW) by February 2022.
    • Section 222(51) of the final version of the 2023 operating budget allotted $3,561,000 to DOH officials for completing “upgrades to the medical cannabis authorization database to improve reporting functions and accessibility” over fiscal years 2024 and 2025.
    • Besides protection from arrest and prosecution, registered patients could also possess greater amounts of plants and cannabis with their doctor’s approval. Registered patients also were exempted from sales and use taxes on cannabis at endorsed retailers, though they were required to pay a 37% excise tax.
      • Learn more from an October 2021 DOH update on the program, tax preferences, and patient trends.
  • The Washington State House Regulated Substances and Gaming Committee (WA House RSG) was the first to hold a public hearing on HB 1563 on January 31st, and members recommended passage on February 2nd. The measure was pulled to the chamber floor on March 2nd, and approved without amending by the full house on March 3rd. No fiscal note was requested for the bill.
  • Once in the Washington State Senate (WA Senate), HB 1563 was heard by the Washington State Senate Labor and Commerce Committee (WA Senate LC) on March 20th, and recommended by the body on March 27th. The Washington State Senate Rules Committee (WA Senate RULE) put the measure on the chamber’s calendar on April 10th, and the chamber passed the measure without any amendments on April 12th.
  • The last bill report published on March 20th identified the proposal’s effects:
    • A qualifying patient or designated provider who has a valid authorization, but is not entered into the database and does not have a recognition card may not be arrested, prosecuted, or subject to other criminal sanctions or civil consequences for certain violations of state law regarding the use and possession of cannabis. To receive these protections, the qualifying patient or designated provider must:
      • possess no more than the authorized amount of cannabis products and plants; 
      • present the authorization, upon request, to any investigating law enforcement officer; and
      • have a copy of the authorization and relevant contact information posted prominently next to any cannabis products and plants.
    • A person who is both a qualifying patient and a designated provider for another qualifying patient may possess no more than 15 cannabis plants located in any one housing unit that is not an authorized medical cannabis cooperative. 
    • The affirmative defense afforded to qualifying patients and designated providers who have a valid authorization, but are not entered into the database and do not have a recognition card, is eliminated.

• Governor Jay Inslee offered brief remarks on the measure alongside sponsoring Representative Shelley Kloba, patients, and supporters from the Cannabis Alliance (audio - 1m, video).
  • Kloba introduced Inslee to two patient advocates, John Kingsbury and Steven Fields, crediting them for bringing arrest protections to her attention, adding that Kingsbury had been “very important in the development of this bill.”
    • Chair of the Cannabis Alliance patient committee, Kingsbury had been involved in medical cannabis issues for several years such as arrest protection, as well as adult home growing, during events by the legislature, the Washington State Liquor and Cannabis Board (WSLCB), and the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), including:
      • Participation in a 2018 WSLCB home delivery study before submitting a petition on implementing more rules for medically endorsed retailers was denied by WSLCB.
      • Addressing the board in 2019, the same year he had a different petition to DOH for medical cannabis rulemaking accepted.
      • Writing in support of 2021 legislation to exempt patients from the cannabis excise tax.
      • Testifying to the Washington State Citizen Commission for Performance Measurement of Tax Preferences during their review of medical cannabis preferences in September 2021 and providing a briefing on Cannabis Alliance medical priorities to lawmakers that October.
      • Presenting on potential racial disparities in arrests for small-scale cultivation of cannabis to a WA SECTF work group in August 2022.
      • Petitioning WSLCB to engage in rulemaking on January 31st to set up a process to remove medical cannabis endorsements from retailers unable or unwilling to comply with established rules for the endorsements.
        • A 2020 petition on the same topic had been denied by board members.
      • Advocating for cannabis home grows repeatedly in the legislature, most recently on HB 1614 on February 2nd.
  • Insleed indicated that HB 1563 “protects medical cannabis patients and their providers” and “ensures that individuals who have a valid medical cannabis authorization and have chosen not to be entered into the Department of Health patient database can't be arrested, prosecuted, or subject to other legal consequences related to using or possessing cannabis.” He thanked Kloba and Senator Patty Kuderer for their leadership on the bill. Joining them were:
    • Cannabis Alliance Executive Director Burl Bryson, Board President Caitlein Ryan, and Lobbyist Alan Ralston.
    • Kloba’s Legislative Aide Brian Haifley

• With the signed bill joining session law, no changes were required of regulating agencies, but medical cannabis rulemaking was underway at the Washington State Department of Health.
  • A legislative overview explains that after Inslee’s signature “bills go to the Secretary of State who assigns a session law chapter number.” Once session law has been incorporated into statute, HB 1563 takes effect 90 days after final adjournment of the session in which it is enacted, which would be on July 23rd.
  • Beyond statutory revisions undertaken by the Washington State Office of the Code Reviser (WA CRO), the legislation didn’t require rulemaking or further action by WSLCB or DOH staff, although public facing information on medical cannabis may be updated to reflect the law.
  • At time of publication, a DOH rules in progress page for medical cannabis identified WSR 22-23-001, a CR-101 covering medically compliant product rules in WAC 246-70 to rename 'marijuana' to 'cannabis,' as well as to: “examine the definition of compliant product, review compliant product labeling, and align quality assurance standards with” WSLCB. This would include “holding workshops and interested party meetings,” and anyone with questions was advised to email program staff at DOH.
    • On March 2nd, DOH announced the conclusion of a separate expedited rulemaking project that made comparable changes in other sections of WAC 246-70.
    • Department staff finalized rules with suggested changes to medical cannabis consultant training in May 2022.
  • The issue of how many endorsed retailers complied with rules was first raised publicly by agency leaders in November 2022. Though not adopting Kingsbury’s petition, board members committed to looking into medical regulations further on March 28th. Staff subsequently provided a “Medical Cannabis Industry Review” outlining their engagement and potential research input on the subject on April 25th.