WA Legislature - Update (February 18, 2025)

Senators heard testimony on out of state ownership, schedules were shuffled, and bills on cannabis producer cooperatives, social equity buffer zones, and retail advertising were up for Tuesday.

Here are some observations of the Washington State Legislature (WA Legislature) for Tuesday February 18th, the 37th day of the 2025 regular session.

My top 4 takeaways:

On Monday in the Washington State Senate Labor and Commerce Committee (WA Senate LC), senators heard testimony on the out of state ownership bill.
- SB 5456 - Out of State Ownership
  - Senator Derek Stanford introduced a companion bill to HB 1346 in the Senate, legislation seeking to lift requirements which limit ownership of Washington cannabis business licenses to state residents and allegedly diminish the influx of capital from out of state investors. He was joined by Republican Deputy Leader Drew MacEwen and Majority Whip T’wina Nobles as co-sponsors.
    - See the bill analysis and fiscal note for more details.
  - Positions: testifying + not testifying = total (no duplicates)
    - Pro: 2 + 8 = 10 (0)
    - Con: 13 + 55 = 68 (0)
    - Other: 1 + 0 = 1 (0)
  - Washington CannaBusiness Association (WACA) Executive Director and Lobbyist Vicki Christophersen was joined by Evergreen Herbal President Andy Brassington testifying in support, emphasizing business normalization and the “capital intensive” nature of some businesses in the cannabis sector.
    - Incidentally, Christophersen acknowledged some Washington businesses were creatively exceeding the five retail store limit encoded in law and expressed willingness to collaborate on shoring up language to match legislative intent.
  - Representatives from the Cannabis Alliance signed in “other” and testified about the traditionally mixed perspectives among their membership.
  - Members of the Washington Cannabis Licensee Association (WCLA) along with representatives from Black Excellence in Cannabis (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 seeking an exit strategy. The influx of capital expected after passage of the bill was expected to exacerbate oversupply to lower wholesale prices in an effort to undermine local businesses, leading to increased attrition, consolidation, and lower tax revenue for the State.
    - When Falcanna Owner and WCLA Co-Founder Bethany Rondeaux testified on the companion legislation in the Washington State House Consumer Protection and Business Committee (WA House CPB), she was pointedly asked by Assistant Ranking Minority Member Jeremie Dufault as to whether Falcanna operated in other states. She replied affirmatively, acknowledging Falcanna co-owned operations in vertically integrated Oklahoma.
    - Rondeaux revised her testimony to WA Senate LC to emphasize how her experience in Oklahoma reinforced her understanding that out of state ownership led to worsened oversupply, consolidation, and downward pressure on wholesale tiers. Stanford asked her nearly the same question as Dufault, somewhat haplessly enabling Rondeaux to reinforce her points. Ignoring the value of her firsthand experience, Stanford tried to double down before Chair Rebecca Saldaña intervened.

As legislators began a sprint towards the first cutoff gateway on Friday, schedules were revised and an uncharacteristic meeting of the Washington State House Rules Committee (WA House RUL) was called for Tuesday.
- Tuesday February 18th
  - 12:45pm: WA House RUL - Committee Meeting [ Event Details ]
    - On Monday afternoon, legislative staff announced the first meeting of the WA House RUL would be convened on the following day.
    - Bills recommended by standing committees must be routed through the powerful rules committees in both chambers for review and potential calendaring, but often ending their legislative journeys there. Lieutenant Governor and Senate President Denny Heck regularly convened bipartisan leaders to select bills for advancement in that chamber, whereas House Democratic leadership had for many years demonstrated a preference for selecting and pulling packages of bills to the floor calendar with the majority’s consent. In the past four years, Cannabis Observer had witnessed only a few meetings of WA House RUL, usually only once or twice per session.
    - At publication time, three cannabis-related bills were ready for calendaring by WA House RUL members:
      - HB 1141 - Cannabis Production Unions
      - HB 1341 - DOH Patient Data Sharing
      - HB 1347 - WSLCB Lab Certification Authority
- Wednesday February 19th
  - 1:30pm: WA House CPB - Committee Meeting [ Event Details ]
    - On Monday morning, legislative staff announced revisions to the schedule.
    - Public Hearing
      - HB 1835 - ~~Local Override of State Cannabis Licensing~~
        
        Legislation that would allow elected officials of local jurisdictions and federally recognized tribes to override WSLCB cannabis business licensing decisions was removed from the list of public hearings.
    - Executive Session
      - HB 1551 - Social Equity Program Evaluation
        
        The bill 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 had been previously scheduled for an executive session during the February 12th meeting of WA House CPB.
- Friday February 21st
  - 8am: WA House CPB - Committee Meeting [ Event Details ]
    - On Monday afternoon, legislative staff announced the addition of three executive sessions during the last committee meeting before the House of Origin Policy Committee Cutoff.
    - Executive Session
      - HB 1449 - Cannabis Home Grow
        
        Originally scheduled for an executive session during the February 11th WA House CPB meeting, home grow was granted another opportunity for advancement.
      - HB 1884 - WSLCB Enforcement Priorities
        
        Legislation calling upon the WSLCB to work collaboratively with cannabis sector stakeholders to review rules and significantly revamp enforcement priorities was scheduled for an initial public hearing during the Wednesday February 19th WA House CPB meeting.
      - HB 1940 - Out of State Ownership + Social Equity Tax Preference
        
        Legislation seeking to allow out of state ownership while also creating a five year business and occupation (B&O) tax break for operational social equity licensees would similarly be heard during the Wednesday WA House CPB meeting.
    - Additionally, two potential amendments on HB 1348 (Cannabis ESOPs) were published on Monday for consideration during the previously scheduled executive session on the legislation on Friday.
      - Amendment H-1476.1 by WA House CPB Chair Amy Walen “Specifies that the proceeds of the sale of a licensed cannabis business's employee stock ownership plan (ESOP) to a private party must go entirely to the employees in the ESOP, after payment of any debts attributable to the ownership interests sold and a fixed fee to a firm or other person outside of the licensed cannabis business to cover administrative costs related to the sale.”
      - Amendment H-1477.1, also by Walen, was described as having the following “EFFECT: Limits corporate officers and directors, and persons with equivalent titles, of businesses with employee stock ownership plans that are applying for or hold a cannabis license, from holding these types of positions with, or an ownership interest in, more than five licensed cannabis retailers; more than three licensed cannabis producers, cannabis processors, or licensed cannabis producer/ processors; and between the retail and producer/processor tiers of the cannabis industry.”
      - Walen published amendment CLOD 309 before the prior executive session on HB 1348 on February 12th which had been rescheduled. At publication time, that amendment was not among the list of published amendments up for consideration on Friday.

Legislation which would establish social equity buffer zones was introduced on Monday and referred to the WA Senate LC as planned.
- SB 5758 - "Supporting social equity in the cannabis industry by establishing distance requirements for certain licensees."
  - Social Equity Buffer Zones
  - Senator Rebecca Saldaña introduced legislation that, as written, would create a separate set of boundary restrictions for licenses issued under RCW 69.50.335(1), the cannabis social equity program.
    - The 1000’ buffer zone defined in RCW 69.50.331(8)(a) would be changed to a 500’ buffer zone for equity applicants and the legislation would preempt local jurisdictions from implementing ordinances which would create buffer zones greater than 250’ between a social equity licensed business and other retailers.
    - See the bill analysis for more details. At publication time, a fiscal note was not available.
  - On Monday, Majority Whip T’wina Nobles signed on as a co-sponsor and the legislation was referred to the WA Senate LC where Saldaña was Chair.
  - Before introduction, the bill had a public hearing planned in WA Senate LC on Tuesday February 18th and a potential executive session scheduled for Friday February 21st.
    - If recommended by the committee on Friday, their report could be read in during the subsequent Senate floor session that day - ahead of the House of Origin Policy Committee Cutoff.
- The draft introduction reports in the House and the Senate for Tuesday February 18th did not appear to include additional cannabis-related legislation, reflecting an overall continued decline in introductions of new legislation ahead of the first cutoff.

On Tuesday, legislation calling for the creation of producer cooperatives would become the first cannabis-related bill to be heard in the House Ag committee in 2025; meanwhile, senators would hear perspectives on social equity buffer zones and consider advancing the retail advertising bill.
- 10:30am: WA House AGNR - Committee Meeting [ Event Details ]
  - Public Hearing
    - HB 1941 - Cannabis Producer Cooperatives
      - Representative Melanie Morgan, Vice Chair of WA House AGNR, introduced legislation which would enable cannabis producers to form agricultural processing and marketing associations as defined in RCW 24.34, entities often structured as cooperatives.
      - See the bill analysis for more details. At publication time, a fiscal note was not available.
- 10:30am: WA Senate LC - Committee Meeting [ Event Details ]
  - Public Hearing
    - SB 5201 - Psilocybin Services
    - SB 5758 - Social Equity Buffer Zones
      - Introduced on Monday by Senator Rebecca Saldaña, the legislation as written would create less restrictive buffer zones for licenses issued under the cannabis social equity program in RCW 69.50.335(1).
      - See the bill analysis for more details. At publication time, a fiscal note was not available.
  - Executive Session
    - SB 5206 - Cannabis Retailer Advertising
      - Republican Deputy Leader Drew MacEwen introduced a reprise of his 2023-24 bill SB 5363 which was not advanced by representatives prior to the opposite house cutoff in 2024. The bill would change requirements for retail advertising signage and transfer authority over trade name signs from the WSLCB to local jurisdictions.
        
        See the bill report and fiscal note for more details.
      - During the public hearing in WA Senate LC on Monday February 10th, cannabis sector interests presented an uncharacteristically unified message of support for the legislation. The bill was resisted by public health and prevention representatives who framed the measure as increasing retail advertising, overburdening local jurisdictions, and threatening normalization of cannabis retailers as legitimate businesses in communities.
      - At publication time, no potential amendments on the legislation had been published.
- 12:45pm: WA House RUL - Committee Meeting [ Event Details ]
- Also on Tuesday, the House planned to convene a pro forma floor session at 9:55am [ TVW ] and the Senate planned to convene a pro forma floor session at 12:30pm [ TVW ].