WA Governor - Bill Action
(May 16, 2023) - SB 5200

The capital budget included $5M for soil cleanup added late in the process in order to help agricultural sectors—including cannabis licensees—in north central Washington.

Here are some observations from the Tuesday May 16th Washington State Office of the Governor (WA Governor) Bill Action.

My top 3 takeaways:

• The presence of legacy environmental pesticides in cannabis products produced or processed near the City of Brewster had emerged as a concern for the Washington State Liquor and Cannabis Board (WSLCB) and other agency leaders late in the biennium budget process (Information Set).
  • On April 6th, WSLCB Director of Enforcement and Education Chandra Wax sent an announcement to all licensees titled “Notice of Pesticide Contamination in Region of Okanogan County” reporting that testing done by staff of the Washington State Department of Agriculture (WSDA) revealed the presence of dichlorodiphenyldichloroethylene (DDE)---a remnant compound of the banned pesticide Dichlorodiphenyltrichloroethane (DDT)---above the default action levels in rule of 0.1 parts per million (ppm). The bulletin noted how “18 licensees in the geographical area” within Okanogan County would be placed under an administrative hold while officials tested products for DDE above 0.1ppm, potentially prompting product recalls.
  • On April 11th, WSLCB staff and board members heard how emergency rulemaking language on the matter was ready, and were promised additional information at the April 12th board meeting. However, at that meeting, board members announced they had switched course and wouldn’t move the rules ahead. Wax shared more information on what agency personnel had been doing to investigate the matter and, following the board meeting, leadership talked about the situation during the April 12th Executive Management Team meeting, specifically the need to fund the WSDA testing lab which was excluded from one version of the operating budget.
  • On April 14th, WSLCB, WSDA, and DOE representatives met with affected licensees, testing laboratories, legislators, and trade associations. After meeting with stakeholder groups, agency staff published an update standing by their actions to that point and reiterating that no new rules on the subject were planned.
  • By April 18th, agency officials confirmed that lawmakers would approve funding for WSDA testing and for a dedicated remediation effort. The 2023 operating budget legislation was expected to include cannabis businesses in a soil and water cleanup effort for “agricultural producers whose products test higher than 0.1 parts per million for DDT and DDT remnants.” The board and Wax also talked about test results, stakeholder meetings, pathways to compliance, the communications plan, and “continuing to work on investigations and partner with folks as we look at potential solutions.”
  • On May 2nd, WSLCB officials noted that a rulemaking petition had been submitted requesting the definition of specific action levels for “additional pesticides that the WSDA test for.” Staff indicated that options for the petition would be presented for board action on June 7th.
  • By May 10th, Licensing staff mentioned providing information to impacted licensees “who may want to relocate,” and planned to “expedite those applications for a change of location.” Additionally, an Enforcement Captain brought up how complaints had “increased for the Cannabis Unit and that was a direct result of the DDE pesticide testing complaints that we received and are currently working through.”
    • The same day, cannabis testing laboratory Confidence Analytics announced they were the first lab to develop standard methods to test for the presence of DDx compounds in cannabis products in Washington state.

• Although rarely containing cannabis-specific spending, the 2023 capital budget signed by Governor Jay Inslee took on increased significance after millions were allotted for remediation of soil contaminated with legacy pesticides (audio - 5m, video).
  • SB 5200, “Concerning the capital budget,” was heard by the Washington State Senate Ways and Means Committee (WA Senate WM) on January 12th and March 20th, with a substitute version recommended on March 22nd, before being passed as an engrossed substitute unanimously by Senators on March 24th. In the other chamber, SB 5200 was amended by members on the floor and passed unanimously on April 21st.
  • Section 3038 provided $5M from the Model Toxics Control Capital Account for a DOE pilot program “located in Okanogan county to remediate soil contaminated with dichlorodiphenyltrichloroethane (DDT) and DDT remnants…subject to the following conditions and limitations
    • (1) The appropriation in this section is provided solely for the department to implement a pilot program located in Okanogan county to remediate soil contaminated with dichlorodiphenyltrichloroethane (DDT) and DDT remnants, if the liquor and cannabis board determines the soil in the pilot program location produced cannabis products that meet or exceed state action levels under WAC 314-55-108. If the board determines that soil in the pilot program location does not produce cannabis products that meet or exceed these levels, the amount provided in this section shall lapse. 
    • (2) If the department implements the pilot program under subsection (1) of this section, it shall provide a status report on remediation efforts to the legislature by December 1, 2023, and a final report on the outcome of its remediation efforts and any recommendations related to the implementation of a statewide remediation program for DDT-contaminated soil by December 1, 2024. 
    • (3) The department shall coordinate implementation of the pilot program created under this section with the Washington department of agriculture and the liquor and cannabis board.”
    • Find out about the account which funds the pilot program from a 2013 report compiled by DOE staff: Model Toxics Control Act Regulation and Statute. The program helps authorities regulate and fund environmental cleanup in Washington state through a hazardous substances tax.
      • Read DOE policies and guidance for site cleanup as well as projects already funded through the program according to a ten-year-plan for the department listed with the Washington State Office of Financial Management.
    • Learn more from studies on environmental remediation of DDT, DDE, and Dichlorodiphenyldichloroethane (DDD):
      • The Bioremediation and Phytoremediation of Pesticide-contaminated sites (2000)
      • Remediation of DDT and Its Metabolites in Contaminated Sediment (2015)
      • Bioremediation of Agricultural Soils Polluted with Pesticides: A Review (2021)
      • Environmental factors influencing DDT–DDE spatial distribution in an agricultural drainage system determined by using machine learning techniques (2023)
    • The Governor remarked that the capital budget would help the State in various ways, including environmental priorities, “boosting behavioral health services and strengthening public safety,” and helping state agencies hire and retain workers. Among the attendees of the event were WA Senate WM Capital Budget Vice Chair Senator Mark Mullet and Capital Budget Ranking Minority Member Senator Mark Schoesler.

• Though not explicitly mentioned during the signing, Inslee made a partial veto of the capital budget that had no effect on section 3038 and the budgets would take effect on July 1, 2023—even as more voluntary cannabis recalls related to pesticides were announced.
  • As explained in the Guide to Lawmaking: “Actual line-item vetoes are only permitted in the budget. In order for the Legislature to override a veto, a two-thirds majority vote is necessary in both chambers.” Inslee’s partial veto of the budget had no impact on the remediation project.
  • As a July 2019 document on the budget process noted, the biennial budgets take effect at the beginning of the fiscal year on July 1st.
  • The following day, May 17th, WSLCB posted four new recalls which had been made in addition to five others announced in early April. All four licensed producers had “certain products” recalled due to “Pesticide action levels above WSLCB requirements,” though the pesticide wasn’t disclosed. None of the facilities facing recalls were located in Okanogan County, which was specified in the pilot program language, and instead were from cities located in Snohomish, Skagit, and Whatcom Counties.
    • May 2nd - Mt. Baker Homegrown, LLC
    • May 5th - Banano Buds
      • The type of recall for this company was left blank, while all others were licensee initiated recalls, also termed a “voluntary recall” by WSLCB staff.
    • May 9th - Mutual Benefit Agriculture, LLC and WAWD, LLC
    • It's Cannabis Observer's understanding that extracts from some of the usable cannabis products impacted by the DDx administrative hold were sold to other licensees prior to the WSLCB Enforcement investigation. It's possible that these licensees which have voluntarily implemented recalls may have purchased those extracts at wholesale for incorporation into their own products. If true, then these vendors may counterintuitively be some of the more responsible actors in the sector taking action to protect their customers despite the potential for impacts to their brand reputations. It's our understanding that the actual distribution of extracts which concentrate DDx contaminants is more widespread than has thus far been publicly acknowledged by WSLCB staff.

Information Set