WA House - Session - Afternoon
(March 4, 2022) - SB 5796 - Second and Third Reading

Filibuster - Shining Light in the Basement
[ Event Details ]

Two changes to a striking amendment were debated—one for quite some time—before representatives passed a bill modifying intended cannabis tax revenue appropriations.

Here are some observations from the Friday March 4th Washington State House of Representatives (WA House) afternoon session.

My top 4 takeaways:

  • SB 5796, "Restructuring cannabis revenue appropriations," was pulled to the WA House calendar on March 2nd after the ambitions encoded in the bill were downgraded to a study.
    • The effort to reformat and revise suggested appropriations from state cannabis revenue was passed by the senate on February 14th and was heard by the Washington State House Appropriations Committee (WA House APP) on February 22nd.
    • During the executive session on the bill on February 28th, an amendment was adopted to remove changes to the advised appropriations in favor of instructing “the Joint Legislative Audit and Review Committee to conduct a review of the appropriation and expenditure of cannabis revenues and report to the appropriate legislative committees by July 1, 2023.”
    • On the House floor, Deputy Speaker Pro Tempore Dan Bronoske asked the presiding clerk for a second reading of the bill before he announced “with the consent of the House, the Appropriations Committee amendment will not be adopted.” He then stated that Amendment H-2959.1, a drafted change by Representative Pat Sullivan was “out of order” and also wouldn’t be considered (audio - 1m, video).
    • Next, Bronoske instructed the clerk to read Amendment H-2967.1, a striking amendment by Sullivan that:
      • “(1) Removes a proposed reference to loans in the context of funding for a cannabis social equity grant program administered by the Department of Commerce;
      • (2) Directs $200,000 annually instead of a proposed $250,000 annually, until June 30, 2032, to the Health Care Authority to contract with the Washington State Institute for Public Policy to conduct cost-benefit evaluations and produce reports;
      • (3) Directs $2,423,000 for fiscal year 2023, instead of a proposed $2,793,000 for fiscal year 2023, to the Washington State Patrol for a drug enforcement task force;
      • (4) Directs $290,000 for fiscal year 2023, instead of a proposed $464,000 for fiscal year 2023, to the Department of Ecology for implementation of accreditation of cannabis product testing laboratories;
      • (5) Directs 52 percent instead of 50 percent of secondary appropriations annually to the State Basic Health Plan Trust Account;
      • (6) Directs 11 percent instead of 10 percent of secondary appropriations annually to the Health Care Authority for purposes including designing and administering the Healthy Youth Survey, developing substance use disorder prevention programs among middle and high school-age students, and contracting with community health centers to provide primary health and dental care services, migrant health services, and maternity health care services;
      • (7) Directs 32 percent instead of 35 percent of secondary appropriations annually to the State General Fund; and
      • (8) Requires the Joint Legislative Audit and Review Committee to conduct a review of the appropriation and expenditure of cannabis revenues and report to the appropriate legislative committees by December 1, 2023.”
  • Two amendments to the striking amendment were voted upon: one changing ‘marijuana’ references to ‘cannabis’ to comport with another passed bill, and an amendment to send more cannabis revenue to local law enforcement which many Republicans seized the opportunity to speak favorably of.
    • Amendment H-2974.1 by Representative Pat Sullivan would replace the term "marijuana" with "cannabis" throughout the bill, bringing it into alignment with HB 1210, passed by lawmakers on March 1st.
      • Sullivan moved for the revision to be incorporated into the amendment (audio - <1m, video) and commented that the “straightforward amendment” changed references from ‘marijuana’ to ‘cannabis,’ as the striker had “missed it in a number of areas” (audio - <1m, video).
      • Assistant Floor Leader Drew MacEwen quickly concurred with Sullivan on the amendment (audio - <1m, video).
      • A roll call vote resulted in “71 yeas, 3 nays, zero excused” according to the clerk, and Bronoske confirmed the change was adopted (audio - <1m, video).
    • Amendment CLOD 197 by Representative Joe Schmick proposed increasing cannabis revenue allotments to local governments, earmarked for local law enforcement.
      • “Increases the percentage of Dedicated Cannabis Account revenues that the Legislature must appropriate to counties, cities and towns where licensed cannabis retailers are physically located from 1.5 percent of revenues remaining after specified appropriations to 3 percent of revenues remaining after specified appropriations. Increases the percentage of Dedicated Cannabis Account revenues that the Legislature must appropriate to all counties based on population from 3.5 percent of revenues remaining after specified appropriations to 7 percent of revenues remaining after specified appropriations. Requires that half the appropriations to counties, cities, and towns noted above must be used to increase local law enforcement resources. Decreases the percentage that the Legislature must appropriate for deposit to the State General Fund from revenues remaining after specified appropriations from 32 percent to 27 percent.”
    • Schmick moved for his amendment to become part of Sullivan’s striker (audio - <1m, video), a change he described as doubling cannabis revenue to local governments, where “a good portion of it will go to law enforcement” (audio - 2m, video).
      • Schmick said “those of us that have been around for a while recognize that early on this was the original intent” of voters supporting the initiative legalizing cannabis, sending money to jurisdictions “that had retail stores and to help with law enforcement, and that number was supposed to increase over time.”
      • In Adams County in his district, he claimed that law enforcement had “a continual problem with illegal grows mixing in with legal grows.” Although they worked with WSLCB Enforcement to determine which were illegal, there was “a cost to that” when they “have to haul this all away to the landfill." He added that illegal cannabis operations had been “left up to the local sheriff” and “money is needed.” Schmick asserted this would benefit legal cannabis producers by getting “the bad guys outta the system and protect[ing] the ones that are doing everything right."
      • Schmick later added to his comments, confirming that local government distributions would be raised from $20 million to $25 million, but “when we first passed this and did the enabling legislation, the idea was ten percent,” or approximately “$50 million” based on recent cannabis tax revenue collected (audio - 1m, video).
    • Sullivan explained he was against Schmick’s amendment as SB 5796 already increased revenue to local governments without “telling them that they have to spend this money on law enforcement." He suggested that actions taken by the legislature, including this bill, showed they were “rising to the challenge” of providing more funding for local governments. Sullivan felt local authorities could be encouraged “to use the funds that they are getting” for more policing, but that decision should be left to their discretion (audio - 1m, video).
    • Representative Kelly Chambers liked the amendment, saying there had been discussions over “the existing licenses that are there that have not been distributed” or licensees who hadn’t been “able to find a place with which to open and locate their cannabis business.” She felt the additional local money would be an “incentive” to municipal officials to allow more businesses to operate by “sweetening the pot, so to speak" (audio - 1m, video).
      • Chambers continued her remarks later, commenting that during the coronavirus pandemic “when we had car dealerships closed, restaurants closed, cannabis shops were allowed to stay open” as an essential service, subsequently experiencing "massive revenue growth." This meant the “funds are there,” she stated (audio - 2m, video).
      • Chambers claimed there were “about 500 retail and producer/processor licenses,” and a bill—inactive by that point—had intended ”to double that, add another 500 licenses.” Chambers didn’t think it was “fair” for any new licenses to be issued, in this case for social equity applicants, “when those businesses have no place to open and operate.” She repeated her belief that the amendment would incentivize area governments to “increase the cap” or end moratoriums against the businesses.
        • Chambers’ estimate of the total number of active licenses was incorrect. There have been more than 500 retail licenses issued by WSLCB and more than 1,200 producer and/or processor licenses distributed. The retail number was pointed out in a hearing she’d attended weeks earlier.
        • And while HB 2022 did ask legislators to create 300 new retail licenses and 200 new producer/processor licenses in total, those allotments would have been evenly divided and issued over the course of the remainder of the decade through 2029.
        • However, Chambers was absolutely correct that many cities continued prohibiting cannabis retail, including the City of Puyallup in the legislative district which she represents.
      • Speaking as an appointee to the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), Chambers argued that people “were kept out of the market” due to “nonviolent drug convictions” and wanted to be able to participate "in this very lucrative industry." Chambers called giving more money to police, despite an ample history of disproportionate enforcement of cannabis and drug offenses by them, a “pathway for” cannabis sector equity (audio - 2m, video).
    • Representative Jim Walsh said that he was frequently asked “what happened to the marijuana money," usually not “in the friendliest terms.” As well, “local government entities” were regularly curious about “what happened to promised funds that were supposed to float down to them.” Walsh believed this was because state officials “raised expectations…that this new industry was going to generate all this new revenue that would be shared” between the state and local governments. He felt this expectation had resulted in “frustration” that the money hadn’t been “what they were promised to be.” He felt the amendment “fixes that a little bit” and “answers the question” of where money from cannabis sales would end up (audio - 2m, video).
    • Representative Cyndy Jacobsen had experience in local government, where they could be “strapped for cash.” Some activities could be subsidized with government grants, but giving them more money was generally “a great idea.” As she’d noticed cannabis businesses were "for whatever reason going great" during the pandemic, meaning “we can afford to do this” (audio - 1m, video).
    • Representative Carolyn Eslick had the impression that money was “promised to cities and the counties to help with law enforcement” after I-502 passed. She further asserted “we knew what was going to happen when marijuana was legalized” because along with cannabis business came “more crime." Eslick insisted that “we never saw that money” and wanted the amendment to increase funding for local government as a way to “restore the trust” (audio - 1m, video).
      • While statistics have indicated Washington has robbery and violent crime rates lower than the national average, the state was one of many experiencing an increase in crime that began in 2020. Cannabis Observer has not been able to identify evidence showing national crime trends correlate to cannabis legalization - and we suspect the opposite may be true.
    • Representative Paul Harris talked about having seen Jay Inslee discuss police reform that day whereupon the governor “addressed this exact issue” and called for more law enforcement funding. He termed the money in the amendment a “small effort” and highlighted other bills with appropriations that instructed how money should be spent. Harris observed that “a lot of times we haven’t been very flexible” when allocating funds, but he encouraged rigidity on disbursing these (audio - 1m, video).
    • Representative Keith Goehner alleged there were “legal grows that are a problem” just as much as “illegal grows.” He remarked that licensees hadn’t been “in compliance with the county code” yet still had been granted licenses by WSLCB, and state officials took a position that it was a local duty “to enforce your own zoning.” Goehner found this approach created “conflict” with local officials as it was a “costly and time consuming endeavor to try to bring people into compliance.” A Chelan County commissioner when I-502 took effect, he said that body lacked a “clear understanding of what the implications would be,” but it was clearly a money maker for Washington. Goehner suggested that assurances had been given that local governments would receive cannabis revenue, which “hasn’t materialized” (audio - 2m, video).
      • In 2021, Goehner sponsored HB 1414, “Aligning marijuana licensing decisions by the liquor and cannabis board with local zoning ordinances.” According to the bill analysis, it would prohibit “the Liquor and Cannabis Board (LCB) from issuing a new or renewed marijuana license for any premises located in an area for which the LCB has received a written objection from a local jurisdiction stating the marijuana license violates local zoning ordinances.” The bill received a public hearing in February 2021 and was not moved further.
    • Representative Larry Hoff said he’d opposed passing I-502, but most of his concerns had “since been alleviated” and local governments had received cannabis tax dollars. However, he had heard “the original intent…was that we were going to approximate[sic] ten percent of the revenues to counties for law enforcement and counseling, and whatever other good would come from this particular direction.” Hoff suggested that, on other topics, they’d recently debated the need to respect “the will of the people…ad nauseum" and suggested endorsing the amendment (audio - 2m, video).
    • Representative Mary Dye returned to Schmick’s “description of what the problem is” in Adams County within her district. She said the “very lightly populated" region included “backroads and dead ends,” and promoted the area as an attractive locale “to hide an illegal grow." While local law enforcement had some success busting unlicensed grows in "sting operations,” Dye said they’d seen one “very sophisticated” grow beneath a trailer hiding plants with “counterfeit barcoding on them so that they were being moved, commercially, into the legal market.” She lamented this “ill-gotten gain” that was “corrupting” the legal cannabis sector. Dye described local authorities using “SWAT teams” as they "faced arms resistance" from “very well-funded, very sophisticated operations, and it takes a tremendous amount of resources” to do policing of that nature. Dye observed that most cannabis tax dollars went towards WA HCA, education, and substance use prevention, but “very, very little of this growing resource of funds goes to support county law enforcement” (audio - 3m, video).
      • Local law enforcement agencies are able to apply for both state and federal grants to subsidize their work.
      • Additionally, the statute being modified included annual funding for a Washington State Patrol (WSP) drug enforcement task force.
        • The original bill aimed to increase funding in fiscal year 2023 from $2,423,000 to $2,793,000.
        • Whereas Sullivans’s striking amendment would return the suggested appropriation to the level previously defined in statute.
    • Representative Mike Volz relayed that the district he represented bordered Idaho and “that creates this…cross-border traffic that increases some of the challenges to law enforcement.” He recalled when Idaho’s drinking age was 19 and Eastern Washington University students like himself would drive into that state in a “pretty big convoy" to imbibe on weekends. Cannabis legalization led to a similar situation, said Volz, but as social consumption of the plant wasn’t permitted, additional effort and resources were needed by police to ensure “bad actors aren’t doing it.” He went on to claim Washington had gained a reputation for being “friendly for crime" as “scoring points for property crimes are much more lenient than they are in Idaho,” so locals would benefit from extra law enforcement funding (audio - 2m, video).
    • Representative Ed Orcutt believed the money might go towards “protecting the licensees themselves" as they were cash businesses with inventory “quite desirable by some.” Licensed cannabis businesses “find themselves to be easy targets" of robbery and theft, requiring "a greater and greater police response." The need for more law enforcement was clear to him since “with 502 there were some promises made” he felt needed to be kept, and additional funding could even result in “eliminating the black market” (audio - 2m, video).
      • SB 5927, legislation to create a sentencing enhancement for those convicted of coordinated cannabis retail robbery, was not passed by legislators.
    • Representative Jeremie Dufault of the Yakima area, which he pointed out had more acreage than the states of Delaware or Rhode Island, commented that this was "a lot of territory to cover" for the county sheriff, along with “jurisdictional challenges” between municipal and tribal governments. He’d heard from local police that they needed more money, and had the impression that funding for law enforcement was promised under I-502 as a “trade off” for the “uptick in enforcement required” (audio - 1m, video).
    • Representative Tom Dent also wanted the bill modified, explaining how he’d done several ride-alongs with law enforcement in his district, so he knew “where every marijuana grow” was in the region. He had heard from sheriff’s deputies about people “wanting to sneak and steal some marijuana for their own use.” To be proactive against such burglaries, he said area law enforcement wanted more money (audio - 2m, video).
    • Minority Caucus Vice Chair Brad Klippert, a deputy in the Benton County Sheriff's Office, made clear that he “can't stand marijuana, I hate it" as he blamed the plant for “destruction in so many lives.” However, “the one good thing” he’d seen from legalization had been monitoring “the [tetrahydrocannabinol] levels in the legalized marijuana. In the illegal grows that’s not the case." Klippert then shared a story about a foreign exchange student that unknowingly consumed a cookie with cannabis in it and “spent four hours in the emergency room that night from a marijuana overdose.” Another story offered by Klippert was that a local official had screamed “no” at him for wanting to leave budget decisions up to local officials as that official didn’t want funds “subject to negotiation” and instead preferred to get state money in “silos” mandating what it had to be spent on (audio - 3m, video).
    • MacEwen wrapped up Republican testimony on the amendment, remarking that their debate wasn’t “about whether we should legalize it or not,” but instead whether the state would uphold “the other things [voters] asked” when legalizing, which he felt was inclusive of funding law enforcement to have "a well regulated industry" (audio - 3m, video).
      • He pointed to the recent spate of “a lot of armed robberies" of retailers because “bad guys know, there’s a lot of cash in there” and believed they’d get away with the crime since police were “stretched out too thin.”
        • An allocation in SB 5693 making supplemental changes to the state operating budget had provided $250,000 for a “task force to look at cannabis retail outlet security issues” which would enable state and local law enforcement communication and require multiple reports to the legislature. However, the conference committee report signed on March 9th removed this funding.
      • MacEwen argued the difference between a licensed and unlicensed cannabis grow was negligible to many people, and that “a lot of nefarious actors” had been “operating illegally under the guise of looking like they’re legal.”
      • He asked for more money to go towards local law enforcement to safeguard the public and cannabis licensees, as police in his district were “spread thin” and in need of additional resources - resources which the state had due to a budget surplus. MacEwen believed there was time to enact the change and was convinced voters passing I-502 “said to us” to use the revenue for law enforcement .
    • Bronoske had staff initiate a vote on Schmick’s amendment to Sullivan’s striking amendment which resulted in “37 yeas, 53 nays.” Schmick’s amendment failed regardless of the testimony of 15 of 41 Republicans in the House totaling over 32 minutes of debate (audio - 1m, video).
      • Republicans had been accused during the session of trying to slow the Majority’s agenda, with one lawmaker saying another bill failed because “every Republican wanted to talk on every amendment. This drew out the clock on other priorities so it was pulled.” Potential for a similar tactic may have contributed to the downfall of HB 1668, the original WSLCB agency request cannabinoid regulation bill, which had over a dozen floor amendments lined up by MacEwen alone.
    • Having resolved the proposed changes to the amendment, members offered remarks on whether it should be incorporated into the bill before voting on it.
    • The roll call vote resulted in “54 yeas, 30 nays” replacing SB 5796 with Sullivan’s striking amendment (audio - 1m, video).
  • After the acceptance of the terminology change, the amended striking amendment was incorporated into an engrossed version of the bill which was passed by the chamber after final remarks
    • Bronoske moved the bill for its third reading and final vote (audio - <1m, video).
    • Sullivan encouraged his colleagues to vote yes on the bill, saying it was an answer to those wondering “what happened to the marijuana money.” He said it would move more revenue to “low income health care, a slight increase for prevention programs” as well as the Healthy Youth Survey, while also increasing allotments to local governments to use “as they see fit” including for law enforcement. Sullivan argued an aspect of the striker which hadn’t been mentioned but “might get at what the previous argument was all about,” was the review by JLARC, as they would study the appropriations to make recommendations “on how we should proceed in the future.” Summarizing that the legislation increased cannabis revenue transparency for the public, he asked for a yes vote (audio - 2m, video).
    • MacEwen agreed with many of Sullivan’s points, saying that the measure would send more money to local governments, though not to “the level that we would like to see on this side.” He brought up how the bill had been “struck” in the WA House APP down to the JLARC study, which he felt “would have been a good way to go” because a “massive change here right here at the end is tough for a lot of people to digest.” He expected some in his caucus would oppose the bill (audio - 1m, video).
    • In the final roll call vote, SB 5796 was passed by a vote of “78 yeas, 18 nays, two excused,” after which Bronoske stated the measure had passed “as amended by the house” (audio - 2m, video).
    • Voting against the legislation were Republicans:

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