WA House COG - Committee Meeting
(November 18, 2021) - WA SECTF Update

Cannabis social equity task force staff described adopted recommendations and those still in progress before responding to questions about data and goals of the group.

Here are some observations from the Thursday November 18th Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• Lawmakers on a key policy committee for cannabis heard about the status and progress of the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) from their colleague and task force chair, Representative Melanie Morgan, and WA SECTF Manager Anzhane Slaughter.
  • WA House COG members first heard the legislation changing the task force’s scope and membership on February 5th before voting to amend it on February 12th. The bill was ultimately signed into law on May 3rd. The committee heard WA SECTF mentions during their meetings on March 25th and 26th, and on October 21st. 
  • Morgan wanted to keep the committee informed of “the awesome work that the task force has been tasked to do” and expected “the committee will be well pleased with” the recommendations “we are now bringing forward.” She thanked Slaughter for “really pulling it off” and coordinating staff to work “with our task force at large and our sub-groups.” Before introducing Slaughter, Morgan included a “word of caution” that “these are recommendations” that would need input and support to “turn these recommendations into actual legislative language” (audio - 1m, video, presentation).
  • Slaughter described staffing WA SECTF on behalf of the Governor’s Interagency Council on Health Disparities along with a “policy analyst, and a part-time administrative assistant.” The legislatively created task force had what she called “a perfect balance of legislators and industry experts, there currently are 17 members on the task force” including Morgan and the WA House COG Assistant Ranking Minority Member, Kelly Chambers (audio - 5m, video). 
    • There were also “three vacant seats...from the Office of the Attorney General, the seat from the Department of Commerce, and our seat from the Association of Washington Cities” (AWC), Slaughter testified. She understood legislative leaders were working “to fill those seats as soon as possible.”
      • Yasmin Trudeau represented the attorney general’s office until she was appointed to the Washington State Senate on November 2nd to represent the 27th Legislative District following the retirement of Senator Jeannie Darneille.
      • Christopher Poulos represented the Washington State Department of Commerce, but in October Slaughter communicated that he had “accepted a new leadership role with the Department of Corrections. With his new role, he will be stepping away from the Task Force and another representative from Commerce will fill his seat.”
        • Slaughter indicated that Poulos would remain co-lead for the Disproportionately Impacted Communities Work Group.
      • Cherie McLeod represented AWC, but Slaughter stated she was “no longer representing the Association of Washington Cities, [and] another representative from AWC will fill in.” Like Poulos, she stayed on as a Disproportionately Impacted Communities Work Group co-lead until that group completed their recommendations, as Morgan was “looking to dissolve the workgroups and move the work back to the Task Force level.”
    • Slaughter reviewed the enacting and modifying laws for the task force. She then relayed how the social equity program mandated that from “December 1st, 2020, until July 1st, 2029, cannabis retailer licenses that have been subject to forfeiture, revocation, or cancellation by the board, or cannabis retail licenses that were not previously issued by the board but could have been issued without exceeding the statewide limit” could be made available to applicants who met any of the following criteria:
      • “They have lived in a disproportionately impacted area”
      • “They have a drug conviction”
      • “Their family has a drug conviction”
    • The existing law also set up the technical assistance (TA) and mentorship grant program, Slaughter commented, and required the task force provide feedback to the Washington State Liquor and Cannabis Board (WSLCB) on “how to implement the current program that’s outlined.”
    • Additionally, she explained that WA SECTF would be advising on several topics:
      • “Whether any additional cannabis producer/processor, or retailer licenses, should be issued”
      • The social equity implications of allowing limited adult cultivation of cannabis
        • At publication time, HB 1019 ("Allowing residential marijuana agriculture") remained active legislation that could be taken up during the 2022 legislative session.
      • Moving “primary regulation of cannabis production from [WSLCB] to the Department of Agriculture” 
      • Possible impacts on “employment rights of workers”
      • Removal of “non-violent, cannabis-related felonies and misdemeanors” that could impact application approval
      • “Workforce training opportunities for underserved communities” to join the cannabis sector
      • The “equity impact of creating new cannabis license types”
      • “How to implement this new social equity technical assistance and grant program”
      • Recommendations would be forwarded to “the respective bodies in batches as soon as they’re passed” by the task force, she said, with a final report from WA SECTF “due December 9th, 2022.”
  • Reviewing public meetings, Slaughter noted there had been eight full task force meetings since the first in October 2020, and they had established work groups for specific focal areas (audio - 4m, video):
    • The Disproportionately Impacted Communities Work Group “focused on eligibility and prioritization of the current equity programs” for those “harmed by the war on drugs.” Considering public input, the work group developed “definitions of family” and a “scoring rubric.”
    • The Licensing Work Group engaged on “task force responsibilities relative to licensing,” such as “do we need more retail or producer/processor licenses?” The consensus was that the allocated retail licenses would be insufficient for creating market equity, “instead, the work group and community agree that true equity would mean that social equity business owners should own 50% of all cannabis licenses issued.” This led to the work group asking the task force for “additional retail and producer/processor licenses” with fewer barriers to entry. 
    • The TA and Mentorship Work Group focused on the grant program “as well as any legislative recommendations” involving the program. Difficulties accessing business capital were considered “the biggest need and barrier for those that are harmed by the war on drugs.” The allocated $1.1 million for TA and Mentorship grants in the 2021-23 fiscal biennium was “insufficient compared to the half a billion dollars in tax revenue that came to this state in 2021.” Reviewing cannabis appropriations, the group had proposed “a new cannabis tax structure” for lawmakers to consider.
      • Find out more about how cannabis tax revenue is disbursed through the biennium operating budget signed on May 18th.
  • Going over the WA SECTF work plan, Slaughter stated that producing recommendations for WSLCB staff to implement the existing program was their top priority, followed by guidance to Commerce officials on the grant program, and finally “offer[ing] recommendations to the legislature” (audio - 1m, video). 

• Slaughter shared recommendations to the legislature that had been adopted by WA SECTF members around eligibility; disproportionately impacted communities; technical assistance and mentorship; and licensing (audio - 7m, video).
  • Slaughter relayed that the Disproportionately Impacted Communities Work Group had secured a task force recommendation after “looking into the definition of family” and established an algorithm for disproportionately impacted areas (DIAs).
    • The work group participants decided to be “as inclusive as possible,” she stated, and count those who were “non-biological and de-facto relatives” by using a definition of “family member” already in law. Slaughter said the language, approved in 2020 as part of HB 2614, “would be most fitting for” the cannabis social equity program.
    • Slaughter said the task force had recommended that DIAs be “defined through a formula that is rooted in statute,” with variables such as “the percent of unemployment in these areas, median household income as proportioned to the county, [and] number of drug convictions.” She believed a “nuance that the work group brought to the task force was a coefficient to represent disparities in cannabis convictions.” Under this formula, Slaughter told the legislators that an “index” of DIAs was created showing areas “most harmed versus those that are least harmed.”
  • Slaughter reported the task force had adopted a TA and Mentorship Work Group recommendation “to begin implementing the current mentorship program that’s already outlined” in addition to a recommendation “to provide financial assistance as an additional use...for these cannabis licensees who fit the social equity definition.”
    • Slaughter remarked that on November 16th the task force had voted to recommend that “50% of all cannabis revenue that comes to the state, should go back into communities.”
      • WA SECTF members were asking that 10% of cannabis tax revenue go into the grant program budget rather than the state general fund.
      • Another 5% of cannabis taxes could “go towards low-interest loans for social equity licensees.”
      • The other 35% would go to reinvestment for “programming in...areas that have been also impacted” disproportionately by drug prohibition enforcement.
  • Regarding the Licensing Work Group, Slaughter said the task force had approved several recommendations after hearing how “inequity eight years after legislation has left a lot of room to catch up for individuals who were most harmed by the war on drugs.”
    • “All new licenses should be reserved for social equity” applicants through 2029, she commented, including “new license types that haven’t been passed through the legislature.” This sunset date permitted “equity applicants the time to catch up so that we can meet equity in the industry,” Slaughter noted.
    • All social equity licenses “should be flexible,” she explained, and allowed exceptions to barriers posed by “buffering [distance] issues.” Slaughter mentioned that the task force felt there was “room to reduce the buffer zones from a thousand feet to 500 feet” for equity applicants, except for elementary schools, secondary schools, and playgrounds.
    • The work group also advised allowing mobility for licenses out of areas with bans or moratoriums with approval of the jurisdiction the licensee was moving to, Slaughter stated. This flexibility for cannabis equity businesses, she told lawmakers, meant greater odds of their success in the marketplace.
  • Remarking that the already approved recommendations were “a lot,” Slaughter indicated WA SECTF would meet again December 14th and “the Licensing Work Group will be able to make...a few more proposals” to the task force. She said this included potential “city incentives” to end bans or moratoriums, as well as asking for “at least 200 new producer/processor licenses be created and allocated to social equity license holders between now and 2029” in addition to “a minimum of 300 additional social equity retail licenses be created between 2022 and 2029.” Slaughter mentioned the work group might also amend their recommendation “around flexibility” to further remove or reduce buffer zones in order to help reach the “goal of 50% of all total licenses being owned by social equity applicants.” 
    • The December 14th WA SECTF meeting was subsequently cancelled on November 24th.

• Questions were raised around previous licensing discrimination, data collection, and the equity goal task force members set for the state cannabis industry.
  • Representative Eric Robertson, noting he was a newer member of the committee, was curious about the “initial round of applicants” and how many had fit “the DIA classification” and been approved for a cannabis license. He hoped to get a sense of “the full scope of the issue” and “the justification for holding all these current licenses and any future licenses, up to 50% of all licenses, for DIA candidates” (audio - 2m, video) 
    • Slaughter didn’t have that information readily available, but offered the “current stats” that “over 80% of...cannabis licenses owned in Washington state are by” people who hadn’t been “disproportionately impacted by the war on drugs.” She promised to get back to him with more data and “better context”
    • Morgan spoke up to say “why we created this task force to begin with was that there was a disparity” in enforcement and incarceration from the war on drugs that “disproportionately impacted Black and Brown people, locking them up for long sentences that were undue sentences.” However, now “that we’ve legalized cannabis,” she argued, impacted individuals were “still being penalized” and were not “able to participate” equitably in cannabis license ownership. Even absent “the actual data that you are looking for,” Morgan remarked that the work group covering DIAs found “communities that have been redlined and that have been purposefully pushed out of the industry, and that’s why we slowed it down in this committee so that we could make sure that we were having equity come along in all parts of the industry” (audio - 1m, video). 
  • Chair Shelley Kloba confirmed that “race or some of these other aspects of how you would define” DIAs hadn’t been collected from license applicants before, leaving it “hard to know what those numbers are.” Morgan noted it was a problem not exclusive to the cannabis industry, and other sectors lacked information “in order to create a more equitable system and processes” for the “Black and Brown people who have been excluded from many, many industries in the United States.” Kloba concurred that information was necessary as, “you can’t change what you don’t know, and you can’t know it unless you measure it” (audio - 2m, video).
  • Robertson inquired how, in the absence of “baseline data,” the task force set “the goal of 51%.” Slaughter said the work group looked “at other states...there’s social equity programs happening all over the country right now.” She called New York’s program “currently the gold standard” as authorities there had “set out that 50% of all their licenses would be owned by social equity applicants.” Slaughter argued it was reasonable Washington state should follow this example (audio - 1m, video).
    • WSLCB staff collected licensee demographic information in January 2020 which is available in the cannabis retail licensee Racial Identity Evaluation Workbook and the Retail Title Certificate Holders Racial Identity Evaluation Workbook.

Information Set