The Week Ahead
(February 10, 2024)

Cannabis Flag - March

Three cannabis-related bills were scheduled to be heard and four executive sessions were planned for the week which would include cancellations of most regular WSLCB meetings.

Here’s a look at cannabis-related policymaking events on the calendar in the week ahead.

Monday February 10th

WA Senate LC - Committee Meeting

On Monday at 10:30am PT, the Washington State Senate Labor and Commerce Committee (WA Senate LC) was scheduled to convene.

WA House CS - Committee Meeting

On Monday at 1:30pm PT, the Washington State House Community Safety Committee (WA House CS) was scheduled to convene.

Tuesday February 11th

WSLCB - Board Caucus

On Tuesday at 10am PT, the weekly Washington State Liquor and Cannabis Board (WSLCB) Board Caucus was scheduled to recur.

  • [ Event Details ]
  • It was Cannabis Observer’s understanding that Chair Jim Vollendroff may be less available throughout the week, but board members may convene to hear an update on legislative affairs.

WA House CPB - Committee Meeting

On Tuesday at 1:30pm PT, the Washington State House Consumer Protection and Business Committee (WA House CPB) was scheduled to convene.

Wednesday February 12th

WSLCB - Board Meeting

The bi-weekly WSLCB Board Meeting was cancelled.

WA House CPB - Committee Meeting

On Wednesday at 1:30pm PT, the Washington State House Consumer Protection and Business Committee (WA House CPB) was scheduled to convene.

  • [ Event Details ]
  • Executive Session
    • HB 1348 - Cannabis ESOPs
      • Representative David Hackney planned to carry legislation regarding employee stock ownership plans (ESOPs) specific to the cannabis sector, clarifying legislation sought by the Washington CannaBusiness Association (WACA) after WSLCB staff withdrew the ESOPs rulemaking project in December.
      • Due to an extended absence, Hackney’s roles in the legislature were reassigned on February 3rd.
      • During the public hearing on February 4th, 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.  Black Excellence in Cannabis (BEC) and Washington Cannabis Licensee Association (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.
      • At publication time, no amendments on the legislation had been published.
    • HB 1551 - Social Equity Program Evaluation
      • 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.
        • See the bill analysis for more details.  At publication time, a fiscal note was not available.
      • During the public hearing on February 4th, 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.  BEC and social equity retail applicant Dondo Enterprises testified against the legislation, especially highlighting concerns about pausing in-process first round applicants (the prime sponsor stated that had not been her intent, but the bill language may be modified).  Representatives from the Cannabis Alliance, Canna Luz, Raven, and Green Roads Cannabis (a social equity retailer in Moses Lake) provided suggestions to improve the bill.
      • At publication time, no amendments on the legislation had been published.
    • HB 1346 - Out of State Ownership
    • HB 1410 - Suspending Inactive Producer Licenses

WSLCB - Executive Management Team

The monthly WSLCB Executive Management Team (EMT) meeting was cancelled, but rescheduled for February 26th.

Thursday February 13th

At publication time, no cannabis-related policymaking events were scheduled.

Friday February 14th

WA Senate LC - Committee Meeting

On Friday at 8am PT, the Washington State Senate Labor and Commerce Committee (WA Senate LC) was scheduled to convene.

  • [ Event Details ]
  • Executive Session
    • SB 5403 - Cannabis Direct Sales
      • Introduced by Senator Rebecca Saldaña, Chair of WA Senate LC, the legislation would authorize cannabis producers to sell their own flower directly to consumers.
      • During the public hearing on January 27th, a supermajority of the 23 people who testified supported the legislation, although questions were raised about market impacts.
      • A fiscal note on the legislation was published on Friday February 7th.
        • WSLCB staff hazarded no guess about potential changes to cash receipts from farm gate sales, explaining: “While this bill allows for direct sale activity which is taxed at the 37% cannabis excise tax rate, it is unknown the volume of these sales and how much activity will be new sales as opposed to consumers buying product via direct sale from a cannabis producer rather than from retailers.”
          • The market report contracted by WSLCB staff from Whitney Economics projected that retail cannabis stores were not capturing all consumer demand for cannabis in Washington state.  The report author, signed in “Other” at the public hearing on SB 5403, provided a projection that legal participation in the market was at 51% - which if true would mean that 49% of sales were to unlicensed businesses and the state was missing out on $400 million in revenue.
        • Furthermore, WSLCB staff made their fiscal projections under unusual assumptions about the number of operational producer licenses and the expected number of direct sales participants.
          • “There are currently 954 cannabis licensees with a producer license. The agency estimates 80% of them would want to take advantage of the direct sales ability introduced in this legislation.”
        • Staff then used their assumption that 763 producers would stand up direct sales capabilities on their licensed premises by 2026—and every year thereafter—to generate what might be called an “upper bound” calculation of expected costs to the agency.
          • By way of contrast, in the fiscal note on HB 1410 (Suspending Inactive Producer Licenses), WSLCB Licensing staff reported: “Last year, the Department of Revenue stated that there were up to 246 inactive producer accounts.”  It was unclear if WSLCB Licensing, Finance, and Enforcement and Education staff took that factor into consideration when making their calculations on SB 5403.
      • At publication time, no amendments on the legislation had been published.

WA Pharmacy Commission - Legislative Review

On Friday at 12pm PT, the weekly Washington State Pharmacy Quality Assurance Commission (WA Pharmacy Commission) Legislative Review was scheduled to recur.