WA Senate LBRC - Committee Meeting - Morning
(February 25, 2020)

Here are some observations from the Tuesday February 25th Washington State Senate Labor and Commerce Committee (WA Senate LBRC) morning committee meeting.

My top 3 takeaways:

• The first cannabis-related bill authored in the House and heard by the Senate this session was the Washington State Liquor and Cannabis Board (WSLCB) agency request legislation HB 2826 - “Clarifying the authority of the liquor and cannabis board to regulate marijuana vapor products.”
  • Passed by the House on February 18th, the bill was last heard before the House Appropriations Committee (APP) on February 8th.
  • Staff Report
    • Richard Rodger, Washington State Senate Labor and Commerce Committee (LBRC) Senior Counsel (audio - 2m, video).
    • Bill Text
      • Z-0876.1
    • Fiscal Note
      • Preliminary (Feb 3, 2020 12:02:49pm)
    • House Bill Analysis (Jan 31, 2020)
    • WA House COG Public Hearing (Feb 3, 2020)
    • WA House COG Executive Session (Feb 6, 2020)
    • House Bill Report (Feb 6, 2020)
    • WA House APP Public Hearing (Feb 8, 2020)
    • WA House APP Executive Session (Feb 8, 2020)
    • House Bill Report (Feb 8, 2020)
    • House Roll Call Vote (Feb 18, 2020)
    • House Background Summary (Feb 18, 2020)
    • WA Senate LBRC Public Hearing (Feb 25, 2020)
    • WA Senate LBRC Executive Session (Feb 25, 2020)
  • Sponsoring Representative Strom Peterson offered his pitch for the bill saying that it was a “simple solution” to the recent crisis of vaping-associated lung injuries (VALI) in Washington which emerged in October 2019. Peterson credited WSLCB, the Department of Health (DOH), the Governor’s Office, and stakeholders for crafting legislation that hadn’t been revised so far in the legislative process. “Fortunately for Washington the cannabis industry was really already doing these best practices and now we’re just codifying it and giving the Liquor and Cannabis Board a little more authority” in the event of a future vapor product health scare to “go in more proactively.” He observed that when cannabis licensees had disclosed vape ingredients to WSLCB following an emergency rule adopted last October “they found none of the vitamin E acetate, none of the questionable products that were linked to that, that horrible lung disease that was happening around the country.” Regarding flavors, Peterson stressed “the flavor additives are naturally occurring in the cannabis plant and that’s all that they can use are those natural terpenes,” thereby avoiding “bubblegum” and other flavors deemed especially appealing to people under 21 years of age (audio - 3m, video).
    • DOH updated their surveillance of VALI cases within the state on February 24th, documenting 27 probable cases including two deaths, one each in Spokane and Thurston Counties.
  • Pro (2)
    • Sara Cooley Broschart, WSLCB Public Health Education Liaison (audio - 2m, video)
      • Broschart testified that the agency appreciated “the very strong support this bill received in the House and hopes for the same reception in this committee and senate overall.” She said that VALI had revealed “significant health risks from vapor products including marijuana containing vapor products.” While already empowered to regulate cannabis vapor products, Broschart explained that WSLCB sought “specific clarification that the Board has the regulatory authority related to marijuana vapor products that may be needed as new data emerge and to prevent possible future health incidents.” Keiser interrupted Broschart to ask that she provide her written remarks to committee staff.
    • Philip Dawdy, Washington Cannabis Association Contract Lobbyist (audio - 1m, video)
      • “Yes to everything here,” Dawdy began, noting “with some humor” that HB 2826 had been supported in the House by lawmakers “who vote no on all cannabis-related issues but they voted yes on this because they get it.” He said failure to address flavored vapor products would be taken as a “wide open door for the illicit market that we don’t want to deal with.”
        • Dawdy originally testified “Other” on behalf of the Washington Cannabis Association during HB 2826’s public hearing in the House indicating “some of my producer/processor clients have got some concerns about synthetic-derived terpene sources being excluded from this bill.” The motivation for the Association’s shift in position is unclear as the language of the bill had not been changed.
  • Con (0)
• At the end of the morning committee meeting during executive session, lawmakers briskly advanced HB 2826 without modification.
  • Vice Chair Steve Conway moved that the bill receive a “do pass recommendation” from the Committee and “be sent to the [Senate] Ways and Means Committee.” Keiser noted the bill had been heard earlier “without any opposition” before calling for a vote. HB 2826 was moved to the Senate fiscal committee by a unanimous voice vote (audio - 1m, video).
• Next up was a public hearing on a striking amendment which would overwrite the engrossed second substitute version of HB 2870 - “Allowing additional marijuana retail licenses for social equity purposes” which had been retitled as “Allowing the issuance and reissuance of marijuana retail licenses under the social equity program.”
  • Passed by the House on February 16th, the bill was last heard before the House Appropriations Committee (APP) on February 10th. 
  • Staff Report
    • Richard Rodger, Washington State Senate Labor and Commerce Committee (LBRC) Senior Counsel (audio - 3m, video).
      • Following an explanation of the bill, Rodger highlighted a new striking amendment from Chair Karen Keiser that included “technical changes” requested by the WSLCB. Rodger described the amendment as making three overall changes to the bill:
        • Adding the Washington State Office of the Attorney General (OAG) as a task force member agency.
        • Requiring WSLCB to consult with the Office of Financial Management (OFM) before raising the cap on retail stores.
        • Requiring WSLCB to be in charge of staffing for the task force. 
    • Bill Text
      • H-0874.1
      • H-4633.2
      • H-4840.1
      • E2SHB 2870 (Engrossed Second Substitute)
        • Revised Title: “Allowing the issuance and reissuance of marijuana retail licenses under the social equity program.”
    • Proposed Substitutes
      • H-4633.2 (with memorandum)
      • H-4840.1 (unavailable as proposed substitute)
    •  Amendments
      • 2870-S AMH APP RAYM 075 (Pettigrew)
      • 2870-S2 AMH PETT H4963.1 (Pettigrew)
      • 2870-S2.E AMS LBRC S6871.1 (Keiser)
      • 2870-S2.E AMS LBRC RODG 360 (King)
      • 2870-S2.E AMS LBRC RODG 361 (King, ADOPTED)
    • Fiscal Notes
      • HB 2870 Preliminary (Feb 3, 2020 11:37:22am)
      • SHB 2870 Preliminary (Feb 10, 2020 1:06:23pm)
      • HB 2870 Final (Feb 19, 2020 9:43:57am)
      • SHB 2870 Final (Feb 19, 2020 9:49:44am)
      • E2SHB 2870 Final (Feb 21, 2020 4:43:45pm)
    • House Bill Analysis (Jan 31, 2020)
    • WA House COG Public Hearing (Feb 3, 2020)
    • WA House COG Executive Session (Feb 6, 2020)
    • House Bill Report (Feb 6, 2020)
    • WA House APP Public Hearing (Feb 10, 2020)
    • WA House APP Executive Session (Feb 11, 2020)
    • House Bill Report (Feb 11, 2020)
    • WA House Roll Call Vote (Feb 16, 2020)
    • House Background Summary (Feb 16, 2020)
    • Senate Bill Report (Feb 21, 2020)
    • Senate Bill Report (Feb 24, 2020)
    • WA Senate LBRC Public Hearing (Feb 25, 2020)
    • WA Senate LBRC Executive Session (Feb 25, 2020)
  • Other (3)
    • Paula Sardinas, Washington State Commission on African American Affairs (CAAA) Commissioner (audio - 2m, video)
      • Sardinas said, “We were very supportive of the concept” of the bill at first, but “unfortunately the language has evolved and it’s drifting away from social equity.” She supported the bill’s plan to “move some of the license[s] that exist today, under the program, without any form of pre-emption to local governments to make their own decisions about how they deal with the disparate impact in their communities.” Sardinas said the amended version of the bill “does not offer the relief” needed to groups it purported to help. Were Keiser’s striking amendment to be substituted for E2SHB 2870, “we would be vehemently opposed to this legislation.” Sardinas assured the committee that the “20 plus stakeholder” groups she represented were all opposed to the amended language.
        • Four days earlier on Saturday February 22nd, Sardinas talked about her influence on the bill during a City of Seattle forum.
    • Joy Hollingsworth, Hollingsworth Cannabis and Hemp Company Co-Owner (audio - 1m, video)
      • Hollingsworth said she was from the “first licensed black owned-and-operated farm in the state of Washington, also in the country as well.” Her reasoning for neutrality on HB 2870 was that “there’s a lot of language in that bill that needs to be fixed but our family trusts the process and we want to continue working with the LCB,” Pettigrew, and others “before it continues to move.”
    • According to Ranking Member Curtis King one person signed in as neutral on the bill while not testifying (audio - <1m, video).
  • Pro (9)
    • Ollie Garrett, WSLCB Board Member (audio - 3m, video)
      • Garrett gave her support of the “underlying bill” but admitted that she was unfamiliar with the newest striking amendment authored by the agency she represented. Keiser asked staff to restate the amendment’s effect to “clarify what exactly is objectionable in the striking amendment that’s different” from HB 2870. Garrett testified that she’d heard from many members of Washington’s African American community “the frustration of being left out of and having no inclusion plan” when cannabis was legalized in 2012. The legislation had become “a top priority” for Garrett prior to becoming “a top priority for our board and our agency.” She promised to review the striking amendment because the bill had already been “changed substantially” following stakeholder and agency engagement.
        • Garrett shared extensive thoughts on HB 2870 and its rationale alongside Sardinas at Seattle’s social equity forum.
    • King said eight people signed in to support the bill while not testifying.
  • Arriving after Sardinas’ and Garrett’s testimony, Representative Eric Pettigrew did his best to clear up confusion about his bill by sharing his intentions in drafting it “to try to move us forward [towards] a little bit more equitable access” to cannabis licensing. Pettigrew said WSLCB had seen problems with “the process, the access, and the limitation to the number of licenses and that's something that needs to be worked out.” He called shifting opinions about the bill “confusing” as well as “frustrating” because “one day people are for it, then they’re against it.” Still, Pettigrew was hopeful that progress would be made “either through this bill or over the interim or whatever” so that the state could “right somewhat of a wrong” (audio - 2m, video).
    • Senator Rebecca Saldaña asked Pettigrew about the proposed staffing of the task force (audio - 3m, video).
    • Keiser and committee members took a moment to recognize Pettigrew’s long service to the State and leadership of the majority House Democratic Caucus during his final term in office.
  • Con (8)
    • Sami Saad (audio - 3m, video)
    • Aaron Barfield, Black Excellence in Cannabis (BEC, audio - 1m, video)
      • Barfield began by saying, “It's sad, I thought maybe we should change [our organization’s] name to Black Excellence on Cannabis as that’s all we’re allowed to be in Washington state.” He reported meeting with policymakers to find an “inclusive solution for the cannabis industry” for several years and had been neutral on HB 2870 “in the past.” However, “we’ve come to the point where we do not believe that this bill is going to develop into something that works for us and we are now opposing it.”
        • BEC sent an email to senators expressing their opposition on Monday February 24th.
    • Peter Manning, BEC (audio - 1m, video)
    • Jay Farishobah, former Bella Solé member (audio - 1m, video)
      • Senator Maureen Walsh had a question on the current status of Farishobah’s store (audio - 2m, video).
    • John Novak, Viper PAC and 420leaks (audio - 1m, video)
      • While grateful the bill had been proposed, Novak was skeptical as medical cannabis patients had found “next to zero social equity” in the 502 market and “I don’t see any reason why the black community should trust the system either.” His concerns involved section 2 of the bill which had “a lot of ‘mays,’” while the next section has “talk about funding and there’s ‘must.’ All the money must go through but they may not even write the rules for it.” The situation reminded Novak of early revenue apportionment under I-502, $90 million of which he claimed “never went to the earmarks that it was supposed to go to.” He argued it was better for the legislature to address the “toxic culture that exists within the Liquor Control Board now.”
    • Tyler Conway BEC (audio - 1m, video)
    • King said two people signed in to oppose the bill while not testifying.

Finally, a bonus takeaway: