WA Legislature - Update
(March 5, 2025)

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

An informative work session on Monday regarding ESOPs intrigued House leaders as legislators prepared to cross the midpoint of the 105 day regular session one week before the House of Origin cutoff.

Here are some observations of the Washington State Legislature (WA Legislature) for Wednesday March 5th, the 52nd day of the 2025 regular session.

My top 3 takeaways:

  • On Tuesday, the Washington State House Consumer Protection and Business Committee (WA House CPB) convened a work session on employee stock ownership plans (ESOPs).
    • On Monday afternoon, the agenda for the work session was published.
    • National Center for Employee Ownership (NCEO) Founder Corey Rosen, who was instrumental in conceptualizing and passing federal legislation regarding ESOPs, represented the Washington Employee Ownership Commission (WA EOC) as a strategic partner to commission members.  In advance of the work session he shared an essay describing ESOPs and employee owned trusts (EOTs) before providing background and responding to legislator questions on Tuesday.
    • Washington State Department of Commerce (WA Commerce) Office of Economic Development and Competitiveness Managing Director Linda Womack and Program Manager Loreena Lowell walked through a presentation describing the mechanics of the fledgling Washington Employee Ownership Program (WA EOP) and the guidance role of the WA EOC.  During questioning, it was revealed that a substantial portion of the generous grant and technical assistance funding allocated to the program was at risk due to State budget concerns.
    • Wrapping up, WA House CPB Chair Amy Walen thanked the presenters noting “business structures are interesting to me, I’m weird that way…as governments, we have encouraged the formation of ESOPs because there’s tax benefits for business owners and it’s an opportunity for wealth building and equity building for team members is, just something that I think is intriguing and certainly want to- hope that we make available to as many employees in the state of Washington as possible.”
    • WA House CPB members heard testimony on HB 1348 (Cannabis ESOPs) and scheduled an executive session on the legislation twice, but ultimately did not take action to advance the bill prior to the House of Origin Policy Committee Cutoff.  The legislation was designated inactive but would be automatically reintroduced during the 2026 regular session.
  • There were no introductions of cannabis-related legislation on Tuesday, and none planned for Wednesday.
    • The draft introduction reports in the House and the Senate for Wednesday March 5th did not appear to include new cannabis-related legislation, reflecting the complications besetting introduction of legislation after the House of Origin Policy and Fiscal Committee Cutoffs.
  • On Wednesday, legislators would convene floor sessions to debate and advance legislation before Washington State Senate Rules Committee (WA Senate RULE) members would be granted the opportunity to move two bills at midday.
    • 9am: WA House - Session
      • [ Floor Activity Report, TVW - Morning, TVW - Afternoon, TVW - Evening ]
      • At publication time, one cannabis-related bill was positioned for floor activity in the House.
        • HB 1551 - Social Equity Program Evaluation
          • During the Washington State Liquor and Cannabis Board (WSLCB) Board Caucus on Tuesday March 4th, Director of Legislative Relations Marc Webster indicated he expected amendments would be offered on the legislation.  While he understood the bill was a priority in the House and would likely be passed, he expected it would not get as much traction in the Senate (audio < 1m, video - TVW).
          • On Tuesday evening, the prime sponsor of the legislation Representative Kristine Reeves, published amendment CLOD 352 which was described as having the following effects:
            • “Removes the proposed restriction on the Liquor and Cannabis Board (LCB) opening a new license application window under the Cannabis Social Equity Program (Program) while retaining the proposed requirement for an evaluation of the Program to be completed by December 1, 2025. Removes the restriction in the Cannabis Social Equity Technical Assistance Grant Program that the only cannabis licensees eligible for grants are cannabis licensees holding a license issued after April 1, 2023, and before July 1, 2024, who meet the social equity applicant criteria. Enables social equity applicants and cannabis licensees who meet the social equity applicant criteria, without restriction on their date of licensure, to be eligible for grants.”
    • 10am: WA Senate - Session
    • 12pm: WA Senate RULE - Committee Meeting [ Event Details ]
      • Senate leaders would be granted two individual pulls in addition to voting on a regular package of legislation for addition to the chamber second reading calendar.
      • At publication time, four cannabis-related bills had been referred to WA Senate RULE and awaited calendaring:
        • SB 5206 - Cannabis Retailer Advertising
        • SB 5403 - Cannabis Retail Financial Interest
          • Also during the caucus meeting on Tuesday, Webster mentioned SB 5403 which he described as “trying to put some guardrails around ownership or what can be left to a management agreement,” indicating he had accompanied Chair Jim Vollendroff during a conversation with the prime sponsor, Senator Rebecca Saldaña.  Considering the WA House CPB work session on ESOPs, the Washington State Senate Labor and Commerce Committee (WA Senate LC) work session on management agreements, and out of state ownership “looming over all of this,” Webster thought it signified “the legislature grappling with if and how to change business structures or arrangements for cannabis businesses.”  Based on the conversation with Saldaña, he expected “this is gonna be a theme during the interim” before adding, “it’s something that really divides the industry itself.  I don’t think there is a shared goal or a common vision that they’re all kinda working towards.  It’s very divided” (audio - 1m, video - TVW).
        • SB 5700 - DOH Patient Data Sharing
        • SB 5758 - Social Equity Buffer Zones
      • As well, one adjacent bill was positioned for movement:
        • SB 5290 - Pre-Hearing SUD Treatment