WA Legislature - Update
(February 21, 2024)

WA Legislature - Update (February 21, 2024) - Takeaways

Lawmakers rushed to recommend legislation ahead of the cutoff on Wednesday while amending budgets and preparing for fiscal committee work, but four cannabis-related bills would likely not be moved in time.

Here are some observations of the Washington State Legislature (WA Legislature) for Wednesday February 21st, the 45th day of the 2024 regular session.

My top 6 takeaways:

  • At the end of the Senate pro forma session on Tuesday, the Washington State Senate Rules Committee (WA Senate RULE) calendared the low dose tetrahydrocannabinol (THC) beverages legislation.
    • HB 1249 - "Regarding limits on the sale and possession of retail cannabis products."
      • Following their meeting at the rostrum, it was announced that members had included the legislation among their regular package pulls.  Subsequently, the bill could be brought up for a second and third reading during a Senate floor session.
  • Also on Tuesday, the Washington State House Regulated Substances and Gaming Committee (WA House RSG) passed the retail advertising bill but took no action on the contentious cannabis commission framework after five transformative amendments were lined up within 24 hours.
    • SB 5363 - “Concerning cannabis retailer advertising.”
      • No amendments were put forward on the advertising bill resulting in a mixed vote.  Ranking Minority Member Kelly Chambers expressed satisfaction that the language placed more control in the hands of locals, but was dismayed at the possibility of expanding cannabis advertising in her community.  She was joined by Representative Michelle Caldier and Speaker Pro Tempore Tina Orwall in voting against the legislation.
      • As the bill was projected to have no fiscal impact, it would likely be referred to the Washington State House Rules Committee (WA House RUL) for calendaring.
    • SB 5546 - "Establishing a Washington state cannabis commission."
      • Following a divisive hearing on Monday and the publication of amendment CLOD 286 by Co-Chair Shelley Kloba that evening which would limit assessment contributions to $5K for larger producers and processors, four more amendments were published throughout the day on Tuesday ahead of the committee meeting.
      • On Tuesday morning, amendment CLOD 284 by Ranking Minority Member Kelly Chambers was published which was described as having the following effects: “Prohibits a referendum from being conducted to establish the Washington State Cannabis Commission until the earlier of the date on which federal law is amended to allow for the interstate transfer of cannabis between authorized cannabis-related businesses or the date on which the U.S. Department of Justice issues an opinion or memorandum allowing or tolerating the interstate transfer of cannabis between authorized cannabis-related businesses. Directs the Liquor and Cannabis Board to notify affected parties, the Legislature, and others if either condition occurs.”
      • Later that morning, amendment CLOD 285 by Representative Kevin Waters was published which “Replaces the proposed initial assessment rate of 0.29 percent of all sales revenues of a cannabis producer or cannabis producer/processor with an initial and maximum assessment rate of 0.15 percent of all such sales revenues, to fund the Washington State Cannabis Commission. Eliminates the option for the assessment rate to be increased through a referendum of the industry while maintaining the option for the assessment rate to be reduced through a referendum of the industry.”
      • In the early afternoon, amendment CLOD 289 by Assistant Ranking Minority Member Eric Robertson was published which “Increases the representation requirements for a referendum to establish the Washington State Cannabis Commission (Commission) or to modify the Commission's assessment rate on cannabis producers and cannabis producer/processors, in order to require that at least 60 percent, instead of 40 percent, of active cannabis producers and 60 percent, instead of 40 percent, of active cannabis producer/processors are represented in a referendum to determine assent or approval.”
      • Just before the meeting, Representative Kristine Reeves published a fifth proposed amendment, CLOD 288, which was far greater in effect than the other four combined.
        • “(1) Adds intent language related to the Washington State Cannabis Commission (Commission) also being intended to support social equity efforts in the cannabis industry.
        • “(2) Specifies that no referendum to establish the Commission may be conducted until the Liquor and Cannabis Board (LCB) has issued or reissued the ten cannabis producer licenses in conjunction with cannabis processor licenses to social equity applicants, which the LCB may issue or reissue beginning January 1, 2025, pursuant to E2SSB 5080 (2023) (chapter 220, Laws of 2023).
        • “(3) Modifies the Commission's proposed purposes as follows: 
          • “(a) Eliminates the purpose of fostering conditions favorable to investment in cannabis produced in Washington in accordance with Washington and federal laws;
          • “(b) removes a reference to ensuring reliable and economical cannabis product in Washington, in the context of the purpose of discovering and developing new and improved cultivars;
          • “(c) removes a reference to ensuring a balanced and sufficient supply of cannabis and cannabis products of good quality during all seasons and at all times, in the context of the purpose of protecting the interest of consumers and Washington by advising on the overall production of cannabis; and
          • “(d) adds a purpose of supporting Washington's policies and work to improve social equity in the cannabis industry by increasing participation in licensed cannabis production and licensed cannabis production and processing by persons who reside in, or have resided in, a disproportionately impacted area, or who are both a socially and economically disadvantaged individual as defined by the Office of Minority and Women's Business Enterprises, and raising awareness about and working to eliminate unconscious bias.
        • “(4) Requires Commission members to complete training on unconscious bias.
        • “(5) Specifies that the statewide at-large member of the Commission:
          • “(a) Must be licensed through the Cannabis Social Equity Program; and
          • “(b) is not subject to the requirements that the member be engaged in the active production of cannabis within Washington for a period of three years and have, during that period, derived a substantial portion of his or her income from cannabis production.”
      • During the committee meeting on Tuesday and following the staff briefing on the amendments, Co-Chair Sharon Wylie hosted an unusual and extensive discussion about the different amendments, encouraging each author to share perspective on their motivations for proposing new language and to field questions about interplay between the changes.
      • Following a lengthy caucus for the three bills under consideration that day, Wylie  returned to announce they had decided not to take action on the legislation.
        • Representative Melanie Morgan was absent throughout the committee meeting, leaving an even split of five Democrat and five Republican members present.  The likelihood of a partisan vote—or bipartisan resistance to the legislation—may have persuaded committee leaders to forego a vote.
        • The WA House RSG was not scheduled to convene again on Wednesday prior to the Opposite House Policy Committee Cutoff.
  • Late on Tuesday evening, the Washington State Senate Ways and Means Committee (WA Senate WM) announced the patient excise tax exemption bill and the “high THC” legislation would be considered on Thursday - but only one would be granted a public hearing.
    • HB 1453 - “Providing a tax exemption for medical cannabis patients.”
    • HB 2320 - “Concerning high THC cannabis products.”
      • Fiscal committees had begun to line up legislation for consideration throughout the remainder of the week before the Opposite House Fiscal Committee Cutoff on Monday February 26th. On Tuesday evening, legislative staff announced the addition of a public hearing on HB 1453 and an executive session on HB 2320 to the WA Senate WM agenda on Thursday February 22nd.
      • HB 2320 was similarly granted an executive session without a preceding public hearing in the WA Senate LC policy committee on Monday February 19th wherein lawmakers amended the legislation at the request of the prime sponsor before voting to recommend the revised bill to WA Senate WM.
      • Should HB 2320 be advanced by WA Senate WM members on Thursday, they will have done so without granting Washingtonians an opportunity to have their voices publicly heard in the Senate.  Following their meeting on Thursday, WA Senate WM members were scheduled to convene on three more occasions before the next cutoff.
  • On Wednesday, lawmakers were scheduled to incorporate initial amendments on the operating budget bills before concluding policy committee proceedings for the 2024 regular session.
    • 3pm: Washington State Senate Ways and Means Committee (WA Senate WM) - Committee Meeting [ Event Details ]
      • Executive Session
        • SB 5950 - “Making 2023-2025 fiscal biennium supplemental operating appropriations.”
    • 4pm: Washington State House Appropriations Committee (WA House APP) - Committee Meeting [ Event Details ]
      • Executive Session
        • HB 2104 - “Making 2023-2025 fiscal biennium supplemental operating appropriations.”
    • The Opposite House Policy Committee Cutoff, the fourth gateway that most cannabis bills must be shepherded through, would occur on Wednesday and was described as the “Last day to read in committee reports (pass bills out of committee and read them into the record on the floor) from opposite house, except House fiscal committees and Senate Ways & Means and Transportation committees.”
      • Legislation can be declared "necessary to implement budgets" (NTIB), an informal procedure leadership can exercise around any bill with a fiscal impact. The criteria for NTIB status and the decision making around the designation hadn’t been set in law or rule, allowing for a bypass of the cutoff calendar which is otherwise agreed to by both chambers through the legislative process.
    • At publication time, 4 cannabis-related bills appeared at risk, having not been recommended by chamber policy committees:
      • HB 2182 - "Creating a data dashboard to track use of regulated substances."
      • HB 2255 - "Concerning inversion and diversion of cannabis."
      • SB 5340 - "Regarding limits on the sale and possession of retail cannabis products."
        • The substantively identical companion legislation HB 1249 was calendared for floor action in the Washington State Senate.
      • SB 5546 - "Establishing a Washington state cannabis commission."
    • For the remainder of the week into the weekend, both chambers would convene fiscal committee meetings to consider, debate, amend, and recommend legislation before the Opposite House Fiscal Committee Cutoff the following week on Monday February 26th.