WA Legislature - Update
(February 5, 2025)

WA Legislature - Update (February 5, 2025) - Takeaways

Legislators heard testimony on five cannabis-related bills on Tuesday, a variant on the impaired driving bill was readied for introduction, and WSLCB leaders would be called upon to provide “technology updates.”

Here are some observations of the Washington State Legislature (WA Legislature) for Wednesday February 5th, the 24th day of the 2025 regular session.

My top 4 takeaways:

  • In the early afternoon on Tuesday, the Washington State House Consumer Protection and Business Committee (WA House CPB) convened four public hearings on cannabis bills related to inactive producer licenses, the social equity program, out of state ownership, and employee stock ownership plans (ESOPs).
    • HB 1410 - Suspending Inactive Producer Licenses
    • HB 1551 - Social Equity Program Evaluation
      • Representative Kristine Reeves put forward legislation requiring the WSLCB and the Washington State Department of Commerce (WA Commerce) to create a report to the legislature on the first round of the social equity program for publication by December 2025, while also deferring a second round at least until July 2026.
        • WSLCB staff had been planning to open a second round of retail licensing in the spring of 2025.
        • See the bill analysis for more details.  At publication time, a fiscal note was not available.
      • During the WSLCB Board Caucus on Tuesday morning, Director of Legislative Affairs Marc Webster conveyed an agency staff interpretation that the bill as written would also halt support for first round applicants who had not yet achieved licensure, prompting pushback from both Board Member Ollie Garrett and Chair Jim Vollendroff.
      • Positions: testifying + not testifying = total (duplicates)
        • Pro: 1 + 5 = 6 (0)
          • Other than the bill sponsor, the only testimony in support was provided by FMS Global Strategies President + CEO Paula Sardinas representing certain initial social equity program applicants.
        • Con: 5 + 69 = 74 (2)
          • BEC and social equity retail applicant Dondo Enterprises testified against the legislation, especially highlighting concerns about pausing in-process first round applicants, although the prime sponsor stated that had not been her intent.
        • Other: 4 + 0 = 4 (0)
    • HB 1346 - Out of State Ownership
      • Representative David Hackney introduced legislation seeking to lift requirements which limit ownership of Washington cannabis business licenses to state residents.
      • Positions: testifying + not testifying = total (duplicates)
        • Pro: 7 + 1 = 8 (0)
          • Representatives and members of the Washington CannaBusiness Association (WACA) and Producers NW testified in support of the legislation, emphasizing business normalization, competition with marketing proxies for out of state businesses, and the “capital intensive” nature of some businesses in the cannabis sector.
        • Con: 16 + 65 = 81 (1)
          • WCLA and many of its members along with representatives from BEC, the Washington Association for Substance Misuse and Violence Prevention (WASAVP), and others led a strong showing against the legislation, which was framed as only benefiting the largest interests in the state.  The influx of capital expected after passage of the bill was described as exacerbating oversupply to lower wholesale prices in an effort to undermine local businesses, leading to increased attrition, consolidation, and lower tax revenue for the State.
        • Other: 2 + 1 = 3 (0)
          • Representatives from the Cannabis Alliance and WSCA were signed in “other” but were not called to testify on potentially mixed perspectives among their membership.
    • HB 1348 - Cannabis ESOPs
      • Hackney also introduced legislation regarding ESOPs specific to the cannabis sector, clarifying legislation sought by WACA after WSLCB staff withdrew the ESOPs rulemaking project in December.
      • Nearing the end of the allotted time for the committee meeting, Acting Vice Chair Reeves limited testimony to persons who hadn’t testified on other bills and who were based in Washington state.
      • Positions: testifying + not testifying = total (no duplicates)
        • Pro: 12 + 9 = 21 (0)
          • WACA representatives and members testified in support of the legislation which was framed as a new, more equitable business structure actively encouraged by the State within other sectors.
        • Con: 7 + 70 = 77 (0)
          • BEC and WCLA representatives and members spoke out against ESOPs, which were anticipated to only be affordable business structures for the largest entities in the cannabis sector as well as a means of skirting true party of interest vetting and residency requirements for out of state “trustees” of the ESOP.
        • Other: 2 + 0 = 2 (0)
          • Representatives from the Cannabis Alliance and WSCA were signed in “other” but were not called to testify.
  • Also on Tuesday afternoon, the Washington State Senate Ways and Means Committee (WA Senate WM) hosted a hearing on a bill to increase distributions of State cannabis excise tax and fee revenue to counties, cities, and towns.
    • SB 5547 - Cannabis Excise Tax Local Distributions
      • Republican Whip Keith Wagoner introduced legislation which would stepwise increase both distributions of cannabis excise tax revenue to participating localities encoded in RCW 69.50.540. The revenue would be decremented from the appropriation to the State general fund at the current level of 32% down to 27% in 2030.
      • Positions: testifying + not testifying = total (no duplicates)
        • Pro: 4 + 15 = 19 (0)
          • When granted the opportunity to introduce his bill, Wagoner recalled he had been a councilmember and mayor when Initiative 502 (I-502) was passed, and advocates had framed the systemic change as a new tax revenue source for local jurisdictions.  In retrospect, he asserted, “the State has been a little bit stingy in its distribution” of proceeds to local jurisdictions.  Acknowledging the budget concerns the Legislature was contending with, he had moderated his prior bill language which sought to double the 5% combined distribution by easing that doubling out over five years.
          • Representatives and members of the Association of Washington Cities (AWC) and the Washington State Association of Counties (WSAC) testified in support of the bill, emphasizing a troubling cycle of local revenues not meeting service commitments and echoing Wagoner’s sentiment about feeling misled.
          • Councilmember Jessica Yaeger of the City of Spokane Valley, which banned new retail operations in July 2016, claimed the anticipated $275K revenue would help address the additional law enforcement needs caused by cannabis impaired driving and retail robberies.
        • Con: 0 + 0 = 0 (0)
        • Other: 0 + 1 = 1 (0)
          • WASAVP Board Member Scott Waller signed in “other.”
  • Introductions of two cannabis-related local control bills went as planned on Tuesday and a more punitive variant of impaired driving legislation was staged for introduction on Wednesday.
    • HB 1835 - “Aligning cannabis licensing decisions by the liquor and cannabis board with local zoning ordinances.”
      • Local Override of State Cannabis Licensing
      • On Tuesday, Assistant Minority Whip Brian Burnett introduced legislation that would allow elected officials of local jurisdictions and federally recognized tribes to override WSLCB cannabis business licensing decisions with a written objection stating the decision would conflict with local zoning ordinances.
        • Additionally, the revised language would provide more weight to claims that a local cannabis business was expected to be the site of “illegal activity,” expanding on the more limited scope of the current statutory definition of “chronic illegal activity” by making it inclusive of any civil law violations.
      • In addition to the three original Republican co-sponsors listed on introduction (Jenny Graham, John Ley, Hunter Abell), the legislation enjoined three additional co-sponsors on Tuesday.  Republicans Suzanne Schmidt and Carolyn Eslick were accompanied by Democrat Lauren Davis representing State District 32 (Lynnwood, Mountlake Terrace, Shoreline) wherein the City of Lynnwood prohibited the siting of cannabis businesses and medical marijuana collective gardens in June 2015.
      • The legislation was referred to the WA House CPB and at publication time an initial public hearing had not been announced
    • SB 5650 - “Authorizing a local excise tax on cannabis.”
      • Local Retail Excise Tax
      • Republican Whip Keith Wagoner introduced legislation which would allow counties or cities to impose a new excise tax of up to 2% on retail cannabis sales in their jurisdiction.
        • The bill text somewhat pitted the counties and cities against one another by authorizing either entity—but not both—to implement a voter-approved ordinance establishing a tax that could be in effect for up to 7 years.  The additional revenue extracted from cannabis consumers would be shared between the counties and cities in both cases but in differing proportions.
      • On Tuesday, Wagoner was joined by two co-sponsors: Senator Leonard Christian representing State District 4 (Spokane Valley) and Senator Jeff Holy.
      • The legislation was referred to the Washington State Senate Ways and Means Committee (WA Senate WM) and at publication time an initial public hearing had not been announced.
    • SB 5664 - “Concerning impaired driving.”
      • Alcohol BAC Limit and DUI
      • On Wednesday, Senator Phil Fortunato planned to introduce a variation on SB 5067, the agency request version of the DUI bill, which would additionally create a new tier of penalties for drivers with higher measured BAC levels.
      • According to the draft introduction report, the legislation was planned for referral to WA Senate LAW.
    • Otherwise, the draft introduction reports in the House and the Senate for Wednesday February 5th did not appear to include any cannabis-related legislation.
  • On Wednesday, legislators in the House would ask WSLCB leaders to describe lessons learned regarding technology updates before the agency’s request legislation on patient data access was scheduled for an executive session.
    • 8am: WA House TEDV - Committee Meeting [ Event Details ]
    • 1:30pm: WA House CPB - Committee Meeting [ Event Details ]
      • Executive Session
        • HB 1341 - DOH Data Sharing
          • Representative Sharon Wylie introduced WSLCB request legislation to authorize agency access to Washington State Department of Health (DOH) patient data.  See the bill analysis and fiscal note for more detail.
          • On Tuesday January 28th during the public hearing, WSLCB Director of Legislative Relations Marc Webster spoke in support of the legislation, conveying a legal interpretation that a statutory change was necessary to authorize the same access to protected DOH patient data as granted to WA DOR to validate excise tax exempt sales of DOH compliant cannabis products.
          • At publication time, no amendments to the legislation had been published.
    • Also on Wednesday, the House planned to convene a floor session at 10:30am [ TVW ] and the Senate would convene a floor session at 12:30pm [ TVW ].