WA House APP - Committee Meeting
(February 7, 2022)

Here are some observations from the Monday February 7th Washington State House Appropriations Committee (WA House APP) Committee Meeting.

My top 3 takeaways:

• Staff reviewed five proposed amendments to HB 1668, “Expanding regulatory authority over cannabinoids that may be impairing and providing for enhanced product safety and consumer information disclosure about marijuana products.”
  • Washington State House Commerce and Gaming Committee (WA House COG) Counsel Peter Clodfelter, who previously provided a briefing on the bill at the public hearing, went over proposed amendments - all but one of which came from Assistant Ranking Minority Member Drew MacEwen, who was also the ranking member of WA House COG (audio - 5m, video).
    • Amendment H-2581.1 by MacEwen
      • “(1) Adds a definition of the term ‘impairing cannabinoid’ to the Uniform Controlled Substances Act. Defines the term as a substance that meets all the following structural and functional criteria:
        • (a) The substance exhibits the structural backbone of tetrahydrocannabinols and tetrahydrocannabinol-like molecules that include the interconnected three-ring system of either a six-carbon aromatic ring, a pyran ring, or a cyclohexene ring (specific known compounds that fit this structural backbone criterion are identified in the definition);
        • (b) The substance possesses significant CB1 agonist activity as demonstrated by binding affinity (Ki) to the CB1 receptors at less than 200 nM; and
        • (c) The substance results in positive effects for all four components of the tetrad test in rodents or reliably causes functional impairment in humans as assayed by a method possessing scientific consensus.
      • (2) Uses the new term ‘impairing cannabinoid’ to replace the phrase ‘cannabinoid that may be impairing’ and similar references in the bill.”
      • The definitions in the amendment were similar to those in SB 5767, drafted by Washington CannaBusiness Association (WACA) leaders in conjunction with “scientists and industry professionals.”  The definitions later appeared in SB 5951 before being stripped out of the bill during its policy committee executive session on February 3rd.
    • Amendment H-2584.1 by MacEwen
      • Would add definitions from H-2581.1 and also “(3) Requires the Washington State University Center for Cannabis Policy, Research, and Outreach [WSU CCPRO] to convene a five-member scientific panel to review available scientific research, data, and regulations of other jurisdictions related to cannabinoids and the regulation of cannabinoids including, but not limited to: (a) Definitions of impairing cannabinoids; (b) definitions of synthetic cannabinoids, synthetically derived cannabinoids, and artificial cannabinoids; and (c) health and safety considerations related to the conversion process and consumption of cannabinoids. Requires a report to the Legislature by December 1, 2022, with annual updates thereafter.”
      • Washington State University (WSU) researcher David Gang, the WSU CCPRO Director, presented on research topics undertaken by the group at the WACA Fall Policy Conference in 2021. It’s Cannabis Observer’s understanding that he was one of five experts who contributed to drafting the definitions in SB 5767, along with Brad Douglass, The Werc Shop Vice President of Intellectual Property & Regulatory Affairs, and Jessica Tonani, CEO of VerdaBio. The three were among experts WSLCB officials invited to join two deliberative dialogue sessions on cannabis plant chemistry in June and July 2021.
    • Amendment H-2602.1 by Representative Eileen Cody
      • “Adds a definition of the term ‘impairing’ to the Uniform Controlled Substances Act. Specifies that the term ‘impairing’ in relation to a cannabinoid means a psychotropic constituent of the plant cannabis which may diminish a person's cognitive, mental, or physical function or ability. Authorizes the Liquor and Cannabis Board (LCB) to further revise the definition by rule for the limited purposes of the provisions of the bill addressing cannabinoids that may be impairing, the LCB's rulemaking regarding cannabinoids, and with respect to non-impairing cannabinoid additives used in cannabis products.”
    • Amendment H-2586.1 by MacEwen
      • “Requires the Liquor and Cannabis Board to consult with members of the Legislature who are appointed by the Speaker of the House of Representatives and the President of the Senate when developing and adopting rules authorized or required under the substitute bill, including related to the sale of products containing certain cannabinoids and synthetically derived cannabinoids. Specifies that the appointed members of the Legislature must be invited to attend each public hearing held on proposed rules authorized or required under the substitute bill.”
    • Amendment H-2579.1 by MacEwen
      • An amendment which “(1) Strikes all provisions of the substitute bill. Adds provisions establishing an alternative approach to regulating cannabinoids with the following components:
        • (a) Defines ‘Impairing cannabinoid’ as a substance that meets specific structural and functional criteria;
        • (b) Adds 12 definitions to the Uniform Controlled Substances Act including definitions for ‘Artificial cannabinoid,’ ‘Cannabinoid,’ ‘Delta-7-tetrahydrocannabinol,’ ‘Delta-8-tetrahydrocannabinol,’ ‘Delta-9-tetrahydrocannabinol,’ ‘Delta-10-tetrahydrocannabinol,’ ‘Naturally occurring cannabinoid,’ and other terms;
        • (c) Prohibits artificial cannabinoids from being used, processed, or sold by any person;
        • (d) Changes provisions about cannabidiol additives in regulated cannabis products and authorizes cannabis processors to use and process hemp and hemp derivatives to use or derive cannabinoids to add to any cannabis product. Requires cannabis products containing hemp or hemp derivatives to be accompanied by a disclosure statement identifying the product as hemp derived;
        • (e) Authorizes Liquor and Cannabis Board (LCB) rulemaking on cannabinoid additives related to testing, product safety standards, and labeling for hemp and hemp derivatives used by processors in making cannabis products. Requires rules to ensure the safety and purity of hemp, hemp derivatives, and impairing cannabinoids used by cannabis processors and incorporated into cannabis products sold by retailers; and
        • (f) Extends existing criminal and civil liability protections for licensed cannabis processors and their employees to also provide protection for activities related to hemp and hemp derivatives as allowed under the bill.
      • (2) Adds requirements on laboratory testing of cannabis and cannabis products, including establishing required fields of testing and establishing standards for determining failure of quality control tests. Requires rules by the LCB related to statistical sampling procedures as well as a remediation process for licensees when products fail quality control tests.”
      • Clodfelter summarized that this amendment would “allow for a greater ability for hemp derivatives, and cannabinoids sourced from hemp, to be added to cannabis products…in the regulated system.”
  • WA House APP Committee Counsel Linda Merelle told the committee that amendments H-2584.1 and H-2579.1 would result in “potential fiscal impacts,” increasing the cost of the bill (audio - 1m, video).
  • Chair Timm Ormsby sought clarification on the meaning of “constituent products” used in H-2602.1, Cody’s definition of ‘impairing.’ Clodfelter said the term referred to a "component of the plant, a substance within the plant" (audio - 1m, video).

• Committee members debated all the amendments, incorporating a definition for impairing cannabinoids and required consultation with lawmakers into the bill.
  • Vice Chair Nicole Macri moved for HB 1668 to be passed out of the committee, opening up an opportunity to amend the bill (audio - <1m, video).
  • MacEwen moved for H-2581.1 to be added to the bill (audio - 1m, video).
    • He described a desire to define impairing, and believed his change took “a scientific approach" (audio - 1m, video).
      • MacEwen repeated a claim made in the public hearing by Vicki Christophersen, WACA Executive Director and Lobbyist, that WSLCB said “it’s going to take ‘em at least 18 months to define what impairing is…we need to move a lot faster than that.”
        • This impression was adapted from WSLCB Director of Policy and External Affairs Justin Nordhorn’s remarks during a different hearing on January 20th. When asked about the timeline for rulemaking to consider allowing products with synthesized cannabinoids to be legally sold, he speculated it was “probably more towards the 18 month line,” though some issues would “likely be done earlier.”
      • MacEwen claimed the definitions were “drafted by their own scientific experts, they being the LCB” and further felt it was “the legislature’s role, frankly, to be involved in the statutory framework, not the agencies.” MacEwen evinced concern that lawmakers had “punted” issues of “definitions, rules, and processes” to state agencies.
    • Ormsby encouraged a “no vote,” in part, because there were “confusing chemical formulas within the amendment” but perhaps more so because HB 1668 could achieve “the right balance of the definition in an upcoming amendment” by Representative Cody (audio - 1m, video).
    • The amendment was defeated in a voice vote (audio - 1m, video).
  • MacEwen moved for H-2584.1 to be added to the bill (audio - <1m, video).
    • He commented, “this takes a scientific approach" by establishing an expert panel, “a more responsible approach.” MacEwen suggested that the "scientific panel" established in the amendment would be better at informing the legislature than “stakeholder input” (audio - 1m, video).
    • Ormsby saw the change as having “the same regulatory loopholes as the previous amendment” that could cause “gaps in realizing the underlying intention of the bill.” He pointed out that WSLCB staff had “consulted with many scientists and interested parties, and they did not reach consensus, but I believe this is a worthy pursuit.” Orrmsby suggested that the report requested in the amendment be made a “budget proviso” instead (audio - 1m, video).
    • The amendment didn’t pass the committee’s voice vote (audio - 1m, video).
  • Cody moved that H-2602.1 be incorporated into the bill (audio - <1m, video).
    • She explained that her proposal would “try to make things a little bit simpler" by defining impairing broadly. Her language would “cover the term ‘impairment’ and allow the LCB to continue to do rulemaking” (audio - 1m, video).
    • MacEwen agreed with the benefits of the amendment (audio - <1m, video).
    • The amendment was approved unanimously (audio - <1m, video).
  • MacEwen moved for H-2586.1 to be incorporated into the bill (audio - <1m, video).
    • He argued that a “legislative oversight process" was an important feature to add to the legislation so as to not be “abdicating our role…when it comes to new markets.” MacEwen didn’t want WSLCB officials setting a “framework” on the topic in rule without legislative review (audio - <1m, video).
    • Cody was dubious that the change was “needed,” as legislators were always welcome “at whatever public rulemaking there is.” But she didn’t perceive any harm, saying with a chuckle, “as long as you promise that I don’t have to serve on this group, I would encourage a yes vote” (audio - <1m, video).
    • The amendment was passed unanimously (audio - <1m, video).
  • MacEwen moved for H-2579.1 to replace all language in the bill (audio - <1m, video).
    • He said his amendment would allow for "broader stakeholder conversation on the underlying bill" and a “necessary statutory framework.” MacEwen felt this approach would be key in developing effective definitions and policy, calling it “much more comprehensive than the original bill” (audio - 1m, video).
    • Ormsby was opposed to the amendment as it included reference to an “uncertain definition of impairing” and “more importantly, it leaves unregulated many of the synthetically-derived cannabinoids.” He argued that the “regulatory loopholes that this creates undermines the underlying bill” (audio - 1m, video).
    • The amendment was defeated by a voice vote (audio - 1m, video).

• Final comments were offered on the revised legislation before the committee approved it, including several Republican members who voted with the majority.
  • Macri moved that the amended bill comprise a proposed substitute and be recommended for passage by the committee (audio - <1m, video).
  • Ormsby suggested HB 1668 was about giving WSLCB “the tools that it needs to effectively regulate this industry” in the face of “technology advancing, and with synthetics being able to be manufactured in a lab." Wanting the agency to continue regulating “new products and new innovations in this space,” he felt the changes to the bill around definitions would assist WSLCB leaders in their regulatory work (audio - 1m, video).
  • MacEwen agreed on the need for “regulatory oversight” of cannabis products with synthetically-derived cannabinoids, but found the “bill fails in a number of areas" and didn’t go “through a good vetting by all sides” in WA House COG, which he considered “very frustrating.” He accused WSLCB of “a slow reaction in many areas” to “adapt to the way…cannabis has evolved” since legalization, pointedly remarking that he didn’t “have a lot of faith” in them to set definitions and standards as staff “failed to do that for the last ten years.” Instead, MacEwen wanted the legislature to have “a more robust role in this and rely on a number of scientific experts.” He remained hopeful that further alterations could be made when the bill came up for a second reading on the chamber floor, but still advised a no vote on the proposed substitute (audio - 2m, video).
    • Regarding opportunities afforded legislators and their staff to vet HB 1668, the first draft of the bill was made available to selected stakeholders on September 1st, 2021 before the third draft of the bill was pre-filed in the legislature on December 20th. After a public hearing in WA House COG on January 13th, a planned executive session on January 21st was postponed until January 25th.
  • A roll call vote resulted in all 19 Democrats on the committee recommending HB 1668, along with three of 14 Republicans (audio - 3m, video):
    • Assistant Ranking Member Chris Corry
    • Representative Paul Harris
    • Representative Joe Schmick
  • Upon confirming passage, Ormsby said the bill had achieved a “do-pass recommendation” and would be referred to the Washington State House Rules Committee (WA House RUL). At publication time, the chamber had until February 15th to pass the bill.
    • The other bills on cannabinoid regulation, SB 5767 and the senate companion for HB 1668, were not recommended before a policy committee cutoff on February 3rd. HB 1668 had become the most viable option for lawmakers to alter the regulation of cannabinoids for the remainder of the session.

Here are some observations from the Monday February 7th Washington State House Appropriations Committee (WA House APP) Committee Meeting.

My top 4 takeaways:

• Staff briefed on amendments to HB 2022, "Concerning social equity in the cannabis industry," which incorporated several recommendations from the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF).
  • The bill was first heard on January 28th by the Washington State House Commerce and Gaming Committee (WA House COG). The policy committee approved a proposed substitute version and rejected one amendment to the bill on February 3rd. The changes to the bill were described as:
    • “Eliminates the requirement that the Liquor and Cannabis Board (LCB) must ‘issue’ each of the new cannabis licenses in each calendar year beginning in 2022 through 2029, while retaining the requirement that the LCB must ‘make available’ the licenses each calendar year beginning in 2022 through 2029.
    • Eliminates a reference to the word ‘mobile’ while retaining the authorization for cannabis licenses issued under the social equity program to be for premises located within any city, county, or town in the state that permits the cannabis business activity at the proposed location. 
    • Restores current law by eliminating all proposed changes to distance requirements in cannabis licensing. 
    • Modifies proposed changes to the prioritization process for cannabis licenses under the social equity program so that the LCB, in consultation with the Office of Equity and community organizations, must select a third-party contractor to prioritize applicants based on a scoring rubric developed by the LCB with input from the Social Equity in Cannabis Task Force and approved by the Office of Equity. 
    • Modifies proposed changes to the definition of ‘social equity applicant’ so that: (1) For applicants qualifying based on living in a disproportionately impacted area, the time period applicants must reside in the area is at least six months out of the last 60 years instead of at least five years out of the last 60 years; and (2) for applicants qualifying based on being disproportionately harmed by the war on drugs as evidenced by rates of arrest for cannabis possession offenses, the express requirement that an applicant be a racial minority is eliminated.
    • Modifies proposed changes to the cannabis social equity grant, low-interest loan, and technical assistance program administered by the Department of Commerce as follows: 
      • Combines the proposed annual $15 million for grants and $7.5 for low-interest loans to $22.5 million annually for grants and low-interest loans; 
      • Limits grants and loans to licensees under the social equity program, so applicants are not eligible for grants and loans but remain eligible for technical assistance; 
      • Specifies the Department of Commerce ‘may’ instead of ‘must’ award grants and loans to licensees under the social equity program; 
      • Adds eligible activities for grants, limits grants to $100,000 per eligible applicant, and specifies eligible applicants may apply for one grant annually and three total grant awards; 
      • Specifies eligible business-related expenses for which loans are available; and 
      • Authorizes the Department of Commerce to work with participating lenders to make loans and to reserve a portion of funds allocated or received in order to support loan loss reserves and reduce underwriting risk.”
    • The WA SECTF also advised the creation of a community reinvestment fund which was picked up in a separate bill, HB 1827, passed by the house on February 12th.
  • On February 5th, WA House APP hosted a public hearing on the revised legislation. Testimony was largely favorable, with nine speakers supporting the proposal and one, Craft Cannabis Council (CCC) Executive Director Adán Espino, speaking against. However, 80 signed in opposed, compared to only 54 signing in to signal support. Vicki Christophersen, WACA Executive Director and Lobbyist was the only person signed in as ‘other.’
  • On February 7th, WA House COG Counsel Peter Clodfelter described HB 2022 as a bill requiring WSLCB to “make available 38 new cannabis retail licenses and 25 new cannabis producer and processor licenses available each year between 2022 and 2029 as part of the social equity program,” limited issuance of other licenses, and “direct future appropriations towards grants and low-interest loans, and technical assistance.” Clodfelter then explained six amendments to the bill that had been put forward (audio - 6m, video).
    • Amendment H-2609.1 by Assistant Ranking Minority Member Drew MacEwen
      • “Removes the requirement that the Liquor and Cannabis Board (LCB) must make available 25 new cannabis producer and/or processor licenses each calendar year between 2022 and 2029 as part of a cannabis social equity program. Eliminates a proposed restriction that, through 2029, the LCB may only issue cannabis producer and/or processor licenses to social equity applicants.”
    • Amendment H-2610.3 by MacEwen
      • Would require WSLCB officials “to expedite issuance of cannabis retail licenses that have been forfeited, revoked, cancelled, or were not previously issued by the LCB but could have been issued and are currently available for issuance or reissuance to social equity applicants under 2020 and 2021 laws.”
      • The first version MacEwen offered, H-2610.1, was revised before the executive session; it would mandate staff “​​to expedite issuance of the cannabis licenses that are made available each calendar year between 2022 and 2029 under a cannabis social equity program.”
      • Representative Tana Senn sought clarity on what constituted "expedited." Clodfelter replied that it had been undefined but "presumably that would just have to be faster than the standard process" (audio - 1m, video).
    • Amendment H-2612.1 by MacEwen
      • Would require the board “reconsider and increase the maximum number of cannabis retail outlets to allow for a greater number of retail outlets based on population changes identified in the 2020 census. Limits issuance of these new retail licenses to social equity applicants.”
      • Clodfelter reminded the committee of a cap on retail allotments in rule “at 556.”
    • Amendment CLOD 152 by Representative Laurie Dolan
      • “Modifies a proposed change to the definition of ‘social equity applicant’ so that for applicants qualifying based on residing in a disproportionately impacted area, the time period that applicants must reside in the area is at least five years out of the last 60 years instead of at least six months out of the last 60 years.”
      • This would return to how the “original bill was structured,” noted Clodfelter.
    • Amendment H-2620.1 by Representative Michelle Caldier
      • “Adds a direction for a $150,000 appropriation from the Dedicated Marijuana Account for Fiscal Year 2023 to the Liquor and Cannabis Board (LCB) to conduct a study, in consultation with the Department of Commerce, to determine if the statewide limit on retail cannabis outlets is sufficient to meet the consumption rate and population of the state as well as the Legislature's social equity goals. Requires the LCB to submit its recommendation for approval by the Legislature if the LCB determines that an increase in the number of retail outlets in existence on January 1, 2020, is necessary.”
    • Amendment H-2611.2 by MacEwen
      • “Specifies that marijuana producer, processor, or retailer licenses under which no sales of marijuana or marijuana products have been made for more than one year must be forfeited.”
  • WA House APP Committee Counsel Linda Merelle informed lawmakers that amendment H-2620.1 would increase the legislation’s fiscal note due to allocating funds for the requested study, whereas removing the requirement to issue additional licenses under amendment H-2610.1 “may have the impact of a savings” by reducing “grants and loans” issued (audio - <1m, video).

• Following a motion to recommend the bill, two amendments were withdrawn and the others rejected after brief remarks from committee members.
  • MacEwen moved to incorporate amendment H-2609.1 into HB 2022 (audio - <1m, video). 
    • He argued the state cannabis sector was “saturated,” claiming licenses were for sale on Craigslist for “substantially below what their costs were just a few years ago.” MacEwen wanted to remove the provision of new producer/processor licenses since “there’s a number of licenses that they can reissue already, so why would we put a mandate out there to put even more into a market that’s overly saturated?” (audio - 1m, video) 
    • Representative Larry Springer countered that HB 2022 attempted to remedy “the inequibilities [sic] that have…emerged in the cannabis field, particularly disadvantaging communities of color.” He found that “only 1% of the ownership of producer/processors…are people of color” and asked for a no vote on the amendment (audio - 1m, video).
      • A voluntary survey of producer/processors by WSLCB in February 2020 showed 1% of those license types were held by African Americans.
    • MacEwen claimed that his change “wouldn’t hinder the issuance of licenses in the social equity portion of this bill at all” as there was “a stack of [retail] licenses that are not being used that we could issue out.” Regarding producer/processor licensure, he favored “using the ones that aren’t being utilized right now,” referencing another of his amendments that had yet to be discussed (audio - 1m, video).
    • The amendment failed to pass a voice vote (audio - 1m, video).
  • MacEwen formally withdrew amendment H-2610.1 from consideration (audio - <1m, video), and moved that H-2610.3 be added to the bill (audio - <1m, video). 
    • Referencing HB 2870, the 2020 legislation establishing the social equity program, MacEwen said WSLCB leaders needed to issue retail licenses to equity applicants as soon as possible. “Let’s take those licenses that are already there and available, and let’s issue those out,” argued MacEwen (audio - 1m, video).
    • Springer noted “expedited" was not defined, and said “that’s the kind of thing that needs to be worked through in more detail” (audio - 1m, video). 
    • The majority of members were against addition of the amendment (audio - <1m, video).
  • MacEwen next moved for amendment H-2612.1 to become part of the bill (audio - <1m, video)
    • He described how the retail cap for jurisdictions was “based off of population demographics” and, as a national census had been completed in 2020, the amendment would instruct WSLCB staff to “recalibrate based on our…new census data” (audio - 1m, video). 
      • The agency possessed “the legal authority to engage in rulemaking to increase the overall license cap pursuant to RCW 69.50.3[4]5(2)” for all license applicants according to an “Assessment of LCB rulemaking authority for cannabis retail licenses” revealed in May 2021. However, WSLCB representatives wanted to defer to WA SECTF recommendations as the document described how “any policy change of this nature may hinder the goals of the social equity taskforce, and create further disproportionate industry representation in relation to social equity.” 
    • Springer called the concept an “interesting idea that….probably bears some further discussion" as the bill moved ahead, but “the underlying bill has some numbers that it has already put forward. Somewhere in between there is probably the sweet spot.” He nonetheless asked for the amendment not to be approved at the moment, even as it could be a consideration “going forward when the bill gets out of committee” (audio - 1m, video). 
    • The proposal was defeated in a voice vote (audio - <1m, video). 
  • Dolan withdrew CLOD 152 (audio - <1m, video). 
  • Caldier moved to have amendment H-2620.1 incorporated into the legislation (audio - <1m, video).
    • She said adding an analysis from WSLCB, the Department of Commerce, and Office of Equity staff was needed since HB 2022 needed “a lot of work” to see if the cannabis market could “handle an increase in” the amount of retail stores. Calidier claimed the delay for a market analysis could avoid having new equity licensees get to the market “and have them not be able to adequately sustain themselves” (audio - 1m, video).
    • Springer wasn’t opposed to analysis, but felt it was “probably not necessary to have this in the bill, this could be done by proviso.” He added that he didn’t want to “load up” the bill with spending on things “that may have to be re-discussed when we try to refine the bill later” (audio - 1m, video).
    • Most of the committee concurred, defeating the amendment (audio - <1m, video). 
  • MacEwen moved for his last amendment, H-2611.2, to become part of the legislation (audio - <1m, video).
    • He said that mandating inactive cannabis producer/processor licenses be reissued to equity applicants would avoid “saturation in this market right now,” insisting the value of licenses was in decline and license holders were “struggling to survive.” MacEwen wanted “licenses that aren’t being actively used” to be made available to equity applicants as a way to achieve equity goals without increasing total licensure (audio - 1m, video). 
    • Representative Eileen Cody expressed interest in the idea, but opposed the amendment, thinking one year of inactivity “might be too short” to ascertain business viability. She encouraged MacEwen to continue working with Representative Emily Wicks, the bill’s prime sponsor (audio - 1m, video).  
    • The change didn’t muster enough support in a voice vote to advance (audio - <1m, video).

• Four committee members shared their perspectives on the bill before a close vote resulted in HB 2022 advancing despite two dissenting votes in the majority caucus.
  • Dolan favored passage of the bill, saying she’d worked with “small cannabis producers in Thurston County” and that the “initial vision” for legal cannabis was to “let it grow from the ground up" into an inclusive and diverse market. “It was not meant to be an industry where large companies would take it over,” she insisted, but focus “on small producers.” Dolan wanted to see HB 2022 move ahead because she sensed “a lot of common ground” on the issue but, she admitted, “based on the discussion just now” there was more work “that needs to be done” (audio - 1m, video).
  • MacEwen offered several complaints about the bill, which he said had been “rushed through on committee” in WA House COG where he was Ranking Member (audio - 2m, video).
    • MacEwen said he’d often heard testimony speaking to the “saturation of the market…and we’re now going to issue more licenses.” He didn’t want to expand a market where existing businesses were “still trying to get [their] footing,” a view he alleged was unrelated “to the social equity component of it.”
    • MacEwen considered it to be “a real legal issue” that the state would grant tax money “to for-profit entities.” He complained about advancing the bill during a short legislative session when “it has a lot of issues”---again stressing that his remarks had “nothing to do with the social equity component”---as he believed consumer demand was being met by existing businesses. He compared grants to equity businesses as tax dollars “going into the abyss.”
    • MacEwen changed tack, complaining that his amendments were agreed to, in principle, by opposing speakers before being voted down on the grounds they were rushed into the bill. Saying the “far from ready” bill should be opposed, he asserted he was “happy to have more of these discussions” but was unsatisfied with the bill process. He suggested pulling the bill rather than try “to fix it all on the [House] floor, we know how that goes”.
    • MacEwen opposed the original bill creating WA SECTF and the social equity program, as well as HB 1443, a 2021 bill expanding the group’s scope.
  • Assistant Ranking Minority Member Chris Corry recognized “a lot of merit to the social equity piece” but was against moving HB 2022 further, not due to concerns over market saturation, but rather “what are we saying our state's priority is right now?" He felt MacEwen’s changes would have helped get licenses out “to the community,” but didn’t understand why cannabis licensure should expand. He claimed to be concerned about telling his constituents that lawmakers chose “to grow retail weed, and we decided to spend some of your money to make sure we did that.” Corry shared how he was bothered “as a parent” by having to explain the scent and sight of cannabis to his children “out in public,” which reflected his discomfort about the “direction for us.” He questioned whether HB 2022 was about “growing and building stronger communities, or is this going to put more drugs into communities?” (audio - 2m, video)
  • Assistant Ranking Minority Member Kelly Chambers, a task force appointee for the house minority caucus, made several claims about the bill while lodging her protests.
    • She did not support the bill as WA SECTF recommendations were not “a well worked concept.”
      • Chambers voted against WA SECTF recommendations on licensing and was absent from many meetings, including the November 2021 meeting where other recommendations were voted on.
    • Chambers claimed the proposal threatened a “massive expansion of cannabis in our state,” an “80% increase in retail licenses, and a 30% increase in those producer processor licenses.”
      • Reviewing WSLCB data published on February 8th, there were 482 active cannabis retail stores in Washington state at that time. Given the existing 38 returned licenses plus 38 new licenses each year between 2022 and 2029, 342 retail licenses would enter the market—a 71% increase—over the next eight years.
    • Chambers rhetorically wondered “if we replaced the word ‘cannabis’ with ‘alcohol’” or “vape shops” whether the members would still vote to add more licenses.
      • Legislators need not vote to increase alcohol or vapor retail licensure because there are no caps, you can apply today.
      • Even an 80% increase in cannabis retail outlets would leave cannabis access points a fraction of the number of locations selling alcohol or vapor products. WSLCB staff reported there were 26,600 alcohol licenses and 3,900 vapor retail locations during a public hearing on HB 2022.
    • Although the bill “seems to seek to right some wrongs, that some people were left out of the opportunity to get a license,” Chambers claimed that WSLCB staff “has licenses and can issue them tomorrow” something that hadn’t “been done in the last two years.” This left her miffed as to why more licenses would be allowed, and skeptical legislators could even “vote it off the floor of the house this year.”
      • Chamber’s view that licenses were ready to be issued since the task force first met in October 2020 was misleading as WSLCB staff were required by law to obtain WA SECTF input on disproportionately impacted areas and applicant prioritization.
      • When WA SECTF members finalized a scoring rubric for prioritization in November 2021, WSLCB Licensing staff amended the language and sought approval from the Office of Equity, as discussed by task force members on January 24th (Chambers was again absent). The accompanying letter to the WA SECTF Chair, Representative Melanie Morgan, from Licensing Director Becky Smith indicated that references to applicant race were removed because the “federal Equal Protection Clause prohibits the LCB from using explicit racial preferences in licensing. We have taken steps to identify an alternative option that includes race neutral factors we hope will achieve the social equity goals expressed in the legislation.”
  • A voice vote of the committee revealed bipartisan opposition to the bill as written. While the majority of members approved its advancement, Democrats Senn and Vice Chair Steve Bergquist joined Republicans in dissenting on the bill, leading to a narrow 17-16 passage (audio - 3m, video).
    • Once confirmed as passed, HB 2022 was referred to the Washington State House Rules Committee (WA House RUL) and had until February 15th to be placed on the chamber floor calendar for debate.

• A news story on the bill’s prospects published on Monday February 14th predicted difficulty moving it further before the house of origin cutoff the following day.
  • The article cited Wicks, the primary sponsor of HB 2022, as having heard from caucus leadership “that they don’t see a way for HB 2022 to advance out of the House.”