WA Legislature - Update
(February 9, 2024)

At the close of a quiet day for cannabis-related legislation on Thursday, House leadership pulled three bills out of their rules committee onto the floor calendar for potential action on Friday.

Here are some observations of the Washington State Legislature (WA Legislature) for Friday February 9th, the 33rd day of the 2024 regular session.

My top 2 takeaways:

• On Thursday at the end of their floor session, House leadership pulled a tranche of bills out of the Washington State House Rules Committee (WA House RUL) including the 2023 patient excise tax exemption legislation, the inversion/diversion bill, and the “high THC” legislation.
  • HB 1453 - "Providing a tax exemption for medical cannabis patients."
    • According to the last published bill report, the legislation would provide “a permanent tax exemption from the 37 percent cannabis excise tax for qualifying patients and designated providers with a recognition card on purchases of cannabis products that are labeled as Department of Health (DOH)-compliant product and tested in accordance with the DOH's rules.”
    • The 2023 bill was initially heard in the Washington State House Regulated Substances and Gaming Committee (WA House RSG) on January 24th when unanimously supportive testimony called attention to problems around taxing medicine. On February 2nd, the policy committee hosted an executive session on the bill and all members recommended the legislation without modification with the exception of Minority Caucus Vice Chair Eric Robertson who was not present for the vote.
    • During fiscal consideration by the Washington State House Finance Committee (WA House FIN), members heard only positive testimony about the legislation on February 20th. Not a single person registered opposition to the bill.
    • The next day on February 21st, the prime sponsor, Representative Sharon Wylie, moved that the bill be amended to make the tax exemption permanent and not subject to the usual ten-year review. Ranking Member Ed Orcutt endorsed the change and generally registered his strong support for the benefits of medical cannabis in contrast to his more lukewarm tolerance for recreational uses.  The bill was amended and unanimously recommended out of committee.
      • A fiscal note on the substitute bill was published on March 2nd which provided only very indeterminate estimates of potential revenue impacts from the legislation due to uncertain data on the number of registered patients; the percent of sales exempt from sales and use taxation; and the vanishingly small quantity of DOH compliant cannabis products sold in the market.
    • After recommendation to the Washington State House Rules Committee (WA House RUL), the legislation was not subsequently calendared for floor activity prior to the House of Origin Cutoff on March 8th, 2023.  At the start of the 2024 session, the bill was automatically reintroduced and retained its position in the rules committee.  At publication time, there were no floor amendments on the legislation.
  • HB 2255 - "Concerning inversion and diversion of cannabis."
    • The bill report indicated the effects of the legislation at publication time:
      • “Requires the Liquor and Cannabis Board (LCB) to regularly audit the data in the Cannabis Central Reporting System (CCRS), with a goal of identifying and preventing illegal inversion and diversion of cannabis into and out of Washington's regulated cannabis system.
      • “Directs the LCB to compare data in the CCRS with data or information like the status of a cannabis license, the status of a business license, and filings and reports related to taxes or business activity submitted to the Department of Revenue.”
    • On January 22nd, members of the WA House RSG heard the 2024 legislation and then unanimously recommended the bill out of committee without amendment on January 23rd. As the fiscal note showed no expected costs, the legislation was referred to WA House RUL for calendaring, bypassing consideration by a fiscal committee.
    • Representative Kevin Waters, the prime sponsor of the legislation, published a floor amendment which would further require the Washington State Liquor and Cannabis Board (WSLCB) “to regularly ensure that all cannabis licensees and third-party testing laboratories comply with any reporting requirement of the LCB to report data or events to the LCB through the Cannabis Central Reporting System” (CCRS).
  • HB 2320 - “Concerning high THC cannabis products.”
    • The bill report indicated the effects of the legislation at publication time:
      • “Requires the Department of Health [DOH] to develop optional training for retail cannabis staff as well as a notice that cannabis retailers must conspicuously post at the point of sale for consumers, related to possible health risks and impacts of high-tetrahydrocannabinol (THC) cannabis and available resources.
      • “Requires the Health Care Authority to contract to develop and implement guidance and health interventions for health care providers, certain patients, and for other uses, with reports and subject to funding.”
    • WA House RSG members heard HB 2320 on January 16th, legislation sponsored by Representative Lauren Davis which, as introduced, would have raised the age limit on cannabis concentrates, required additional educational resources, and delegated the creation of health intervention guidance to the University of Washington Addictions, Drug, and Alcohol Institute (UW ADAI). The bill received support from public health and prevention groups but opposition from cannabis stakeholders was centered on the prohibition of concentrate sales within the regulated market to young adults aged 21 to 25.
    • During a January 29th executive session, members incorporated a proposed substitute by Co-Chair Sharon Wylie which removed the age restriction for sale of products with over 35% THC, added the DOH retail notice, removed UW ADAI from leading research, and changed the intent language.  A vote on the proposed substitute resulted in all members recommending passage, except for Robertson and Representative Greg Cheney who voted ‘without recommendation.’
    • As the revised legislation was still expected to have substantial costs, the bill was granted a public hearing in the Washington State House Appropriations Committee (WA House APP) on February 3rd after being scheduled the night before.  As the committee sign in was open for less than 12 hours, no testifiers were available to provide their perspectives to legislators, who nonetheless unanimously advanced the bill while incorporating a technical amendment on Monday February 5th, the day of the House of Origin Fiscal Committee Cutoff.
    • At publication time, there were no floor amendments on the legislation.
  • All three bills became available for second and third reading during a subsequent House floor session.

• On Friday, legislators would continue their floor sessions ahead of the next cutoff on Tuesday February 13th and the Washington State Senate Rules Committee (WA Senate RULE) planned to meet during the lunch break.
  • The WA House was scheduled to convene at 9:30am PT and the WA Senate was scheduled to convene at 10am PT.  Both bodies would publish orders of consideration throughout the day listing bills planned for floor activity.  At publication time, four cannabis bills were positioned for floor activity in the House and one in the Senate:
    • HB 1249 - “Regarding limits on the sale and possession of retail cannabis products.”
    • HB 1453 - "Providing a tax exemption for medical cannabis patients."
    • HB 2255 - "Concerning inversion and diversion of cannabis."
    • HB 2320 - “Concerning high THC cannabis products.”
    • SB 5377 - “Concerning cannabis license ownership.”
  • During their meeting tentatively scheduled for Friday February 9th around 12:30pm PT, WA Senate RULE members would have the opportunity to present one member pull in addition to voting on a regular package of bills selected by committee leadership.  At publication time, the following cannabis-related legislation was eligible for calendaring:
    • SB 5405 - “Modifying the liquor and cannabis board's subpoena authority.”
    • SB 5546 - “Establishing a Washington state cannabis commission.”
    • SB 5662 - “Creating the cannabis employee job retention act.”
    • SB 5791 - “Concerning the evaluation of the effectiveness of oral fluid roadside information in the enforcement of driving under the influence laws.”
    • Although unannounced, WA Senate RULE members did convene on Wednesday February 7th after their floor session which ran into the early evening.  No cannabis-related bills were moved by the senators at that time.