WA SECTF - Public Meeting
(September 14, 2021) - Legislative Proposals - Licensing

Three recommendations for the 2022 legislative session were put forward by the licensing work group and adopted by the task force following discussion and amendment.

Here are some observations from the Tuesday September 14th Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) Public Meeting.

My top 4 takeaways:

• Licensing Work Group members presented their first legislative proposal to reserve all new licenses and license types for social equity applicants through 2029.
  • Work group co-lead Michelle Merriweather, appointed to represent “the African American community,” shared the work group’s proposals, mentioning they would continue “to meet to make other recommendations” (audio - 3m, video):
    • “Any new licenses...issued be reserved for social equity through 2029, and this includes any new license [type] that gets passed through the legislature.”
    • “All social equity licenses are mobile within their respective counties...there are a number of city bans and moratoriums, and allowing the mobility of these licenses will be beneficial.”
    • “Reduce buffer zones from 1,000 feet to 500 feet, reserved for social equity licenses. RCW 69.50.331 allows cities to reduce the buffer zones from 1,000 feet, but not less than 100 feet from recreational facilities, public transit centers, correctional facilities, libraries, and game arcades. And this excludes elementary schools, secondary schools, and playgrounds that must remain at 1,000 feet.”
  • Micah Sherman, Raven Co-Owner and a work group member, explained how all their recommendations were legislative proposals (audio - 2m, video).
    • He noted that the allotment of additional retail licenses was “something we intend to bring up,” but work group members were moving towards “determination about numbers on that first.” The work group intended to have a recommendation before the 2022 legislative session, he stated, and were moving ahead on other recommendations “that are more established.”
    • WA SECTF Chair and Representative Melanie Morgan cautioned him that “we’re running out of time” and the drafting of “preliminary legislation” was underway in the Washington State Legislature (WA Legislature). She wanted to vote on a measure before the meeting concluded so she could arrange to “get this to the [Washington State House] Commerce and Gaming Committee” (WA House COG) because there would be “prefiling dates in early December, so...we don’t have a lot of time.”
    • Sherman then asked that all three recommendations from the work group be debated “as one group.”
      • Sherman’s appointment to WA SECTF to represent licensed processors was announced on August 17th.
  • Task force member and Representative Kelly Chambers, appointed to represent the Washington State House Republican Caucus, asked whether the 2029 sunset for licenses to be dedicated to social equity existed in statute. WA SECTF Manager Anzhane Slaughter replied that the deadline was in law (audio - 1m, video).
    • RCW 69.50.335(1) states, “Beginning December 1, 2020, and until July 1, 2029, cannabis retailer licenses that have been subject to forfeiture, revocation, or cancellation by the board, or cannabis retailer licenses that were not previously issued by the board but could have been issued without exceeding the limit on the statewide number of cannabis retailer licenses established before January 1, 2020, by the board, may be issued or reissued to an applicant who meets the cannabis retailer license requirements”
  • When task force member and Senator Curtis King, appointed to represent the Washington State Senate Republican Caucus, raised the 2029 end date as a potential problem, Sherman reiterated that the date was in law and the work group was “just modeling this recommendation off” existing statute (audio - <1m, video). 

• The second recommendation to authorize social equity license mobility within counties resulted in at times contentious discussion regarding the location of existing social equity retail allotments, as many were tied to jurisdictions with bans or moratoriums.
  • King had reservations about license mobility within counties. As there were “businesses already in these counties,” he wondered what would stop an equity licensee from “going right next door to ‘em?” (audio - 1m, video) 
  • Paul Brice, Happy Trees Owner and advisory member of WA SECTF, suggested that he was open to more cannabis revenue “back to the counties or the cities” and allowing cannabis delivery as “a roundabout way to...let a city/county know we can take away your funding and you can be a detriment to...your community by not getting this funding.” Delivery ensured that consumers would be served regardless of the jurisdiction’s stance on cannabis retail, Brice asserted, and was the best argument “to get any county or city to start bending” (audio - 1m, video). 
  • Morgan asked about social equity applicants who qualify by having lived in a disproportionately impacted area (DIA) that has a ban or moratorium in place, did that mean they would automatically receive “a mobile license?” Sherman’s “understanding of the DIA was that was about...where the applicant lives, not necessarily where their business is going to exist” (audio - 2m, video). 
  • King pointed out that Yakima County had a ban on cannabis businesses but “numerous cities” in the county allowed them. The idea of cannabis retail allotted for unincorporated areas moving into those cities bothered him, and he asked for “more restrictions.” Sherman noted that allowing stores in unincorporated parts of counties to move to cities that permitted retail could mean “that population in the county...could be served by a city store” and not require counties to change their ordinances (audio - 1m, video).
  • Jim Makoso, Flowe Technology CEO and a Technical Assistance and Mentorship Work Group member who was appointed to represent licensed processors on the task force, was also curious about license mobility. He seemed interested in an exception for existing processors having to move operations based on local bans and moratoria. “Every time I have to move my license, whether it’s in county or out of county, I gotta go through the whole licensing process again, prove that I got money, prove that I’m following all the rules,” he told the task force (audio - 15m, video). 
    • Sherman said of the 39 licenses available for social equity applicants, “some of them are in bans and moratorium areas” and this would allow them to relocate “within the county where there is no ban” making “more of those 39 licenses available to be issued.”
    • Morgan suggested an edit to the legislative proposal so that it didn’t reference “all” licenses but only the already available retail licenses in ban or moratorium areas. However, Merriweather wanted that word to remain in the event “future licenses come back to us” for social equity: “we want to make sure that those are eligible to be mobile as well if they’re in banned and moratorium areas.”
    • Members discussed the mobility of current license types and what should be allowed for future retail licenses set aside for social equity applicants. King didn’t like the concept but Morgan contended bans didn’t “allow for this pathway for equity” nor moving those stores to help “individuals who could be using them.”
  • Task force member and Senator Rebecca Saldaña, appointed to represent the Washington State Senate Democratic Caucus, said this proposal addressed a frustration she’d had with the existing retail licenses set aside for social equity, and supported “any word language you wanna do.” She supported mobility for existing licenses in ban or moratorium areas “and if other licenses come back in, only for social equity do they have that flexibility.” Saldaña wanted fewer licensing barriers to “make it as fair as possible” for equity applicants to enter the industry against established competitors as well as “on-ramps for a lot of these other potential” license types devoted to social equity. She suggested revising language to indicate “all licenses available for social equity...retail...are mobile based on local jurisdictions within the respective county.”
  • Brice advised limiting mobility to “a one time move only,” saying he’d been told by WSLCB Administrative Regulations Analyst Frank O’Dell that location changes “tie up more of LCB staff...and they’re losing files and fingerprints and everything else.”
  • Morgan noted “when the state got out of the alcohol business they stopped controlling where those stores would be” and wondered about bringing “everything into parity with other industries.”
  • Task force member Pablo Gonzalez, appointed to represent cannabis retailers, added that retailers could move within “their respective municipality.” He cautioned that shuffling of retail locations between cities could lead those jurisdictions to cap the number of allowed retail stores.
  • Chambers inquired about census data and possible changes in retail allotments due to population growth. Slaughter said that was possible but “it doesn’t address the ban and moratorium issue, which this proposal is addressing” (audio - 6m, video).
    • Brice argued that some counties’ allotments hadn’t increased, some cities had reached their retail cap, and it was difficult for stores to move once they’d settled into an area. Chambers asked if Brice knew of cities in Pierce County that were amenable to having more cannabis retail within their boundaries. He pointed to the City of Tacoma, where the City Council passed a resolution asking the state for more retail locations in July 2020, as he believed there’s “an appetite there.” Saldaña indicated that Kent had a moratorium and that stores allotted for that city could move to Seattle where there was “maybe an appetite for a couple” more retailers.
    • Makoso brought up an April 2020 appeals court opinion in a case brought against Yakima County that upheld that jurisdiction’s authority to prohibit cannabis businesses in unincorporated areas. Sherman clarified the proposal wouldn’t seek to challenge local choice to have bans, but instead allow businesses to respond to that choice by taking their business elsewhere. “This does not force any city or county to accept any of this,” Sherman added, but instead gave social equity licensees “the maximum amount of flexibility.”
    • At the July 27th task force meeting, WSLCB Director of Licensing Becky Smith said agency staff considered population changes in an initial review “of the number of retail stores” including stores “that are in moratoriums and bans as well” and recommended “51 more retail stores.” 

• The work group’s final recommendation was to reduce buffer zone distances for social equity applicants, which drew several questions about potential impacts on local control.
  • Earlier in the discussion, King said he was fearful about “changing these buffer zones” since it could be “within a hundred feet of game arcades,” believing that kids were the most likely demographic to use them. Excluding schools and playgrounds from buffer zone changes wasn’t sufficient for King, who wanted to “keep it at a thousand [feet], leave it at that” (audio - 1m, video). And Brice observed that “no kids go into” cannabis retailers...you gotta be 21 and older” and it wasn’t different than walking by “any other liquor store” (audio - 1m, video).
  • Task force member and TA and Mentorship Work Group co-lead Tamara Berkley, appointed to represent licensed retailers, suggested that reduced buffer distances may be something social equity licensees “could apply for, versus it just being across-the-board lowered” (audio - 3m, video).
    • Gonzalez highlighted the fact that local jurisdictions already had some control over lowering buffer distances in RCW 69.50.331(8).
    • Sherman said numerous municipalities had “removed their buffer down to three or five hundred feet, or they are allowed to bring it down” and could continue to do so even if the state’s minimum distance for equity licensees was cut in half.
    • Task force member Cherie MacLeod, appointed to represent the Association of Washington Cities (AWC), noted that Seattle had lowered their buffer distance to 500 feet---and 250 feet in the downtown area---as that was “literally the only way any stores could site in...viable areas.”
  • Task force member Christopher Poulos, appointed to represent the Washington State Department of Commerce (WA Commerce), asked if equivalent buffer zone restrictions existed for alcohol businesses, noting the “stigma around cannabis” could be impacting potential equity efforts. Morgan mentioned that it could be worth reminding people “a lot of this cannabis money is coming back for the educational piece on cannabis” and that there could be an awareness campaign “educating our youth on cannabis and safety” (audio - 1m, video).
    • While there are not buffer distances on alcohol retailers, some are affected by Alcohol Impact Areas (AIA) described by WSLCB as giving local authorities “a process to mitigate problems with chronic public inebriation or illegal activities linked to the sale or consumption of alcohol within a geographic area of their city, town or county, but not the entire jurisdiction.” AIAs are designated with geographical boundaries as defined in WAC 314-12-15. Alcohol restrictions for these areas include: 
      • “Restricting the off-premises sale of certain alcohol products (banned products list)
      • Restricting the business hours of operation for off-premises consumption liquor sales
      • Restrictions on container sizes available for sale”
      • Check out agency information on existing AIAs.
    • A 2017 bill proposed banning cannabis retail in AIAs but wasn’t advanced.
  • Morgan emphasized local override of buffer distances, wondering “do we really need legislation?” Slaughter replied that “not all cities” were lowering buffer distances, mentioning Mercer Island where “they don’t currently have a ban or moratorium, it’s the buffering that has...created more barriers to entry.” Sherman commented that “the mobility of the licenses, if a city didn’t want stores sited in their city they would still be able to not allow for that use type to exist...it doesn’t force any municipality to accept something that they don’t want” (audio - 2m, video).

• A motion and vote recommending all three amended legislative proposals from the Licensing Work Group was passed decisively, likely initiating the drafting of one or more bills for lawmakers to consider in 2022 (audio - 2m, video).
  • Merriweather moved to accept the revised proposals which were approved by all members except for King and Chambers, with Gonzalez abstaining. Morgan said the task force had accepted “these proposals to send forward to the legislature.”
    • Morgan’s mention of WA House COG, a cannabis policy committee on which both she and Chambers serve, suggests that one of the representatives on the task force may be a bill sponsor.
    • In 2020, Saldaña sponsored SB 5388 and Morgan sponsored its companion legislation, HB 1443, which successfully modified the task force and social equity program.

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