WA House COG - Committee Meeting
(February 12, 2021) - HB 1443 - Executive Session

A substitute version of a bill expanding and revising the duties and membership of the State’s social equity in cannabis task force was narrowly recommended by its policy committee following a 5-4 party-line vote.

Here are some observations from the Friday February 12th Washington State House Commerce and Gaming Committee (WA House COG) meeting.

My top 3 takeaways:

• A substitute version of HB 1443, legislation to modify and expand aspects of the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), was granted an executive session by its house of origin policy committee.
  • At the WA SECTF January 25th meeting, members adopted two motions.
    • The first covered social equity applicant criteria.
    • A second recommended that lawmakers modify the criteria for the technical assistance grant program to allow otherwise eligible current licensees to apply for funds allocated by the state but unable to be disbursed before the Washington State Liquor and Cannabis Board (WSLCB) received guidance on the equity applicant process from WA SECTF.
  • WA House COG Research Analyst Kyle Raymond briefed the committee on HB 1443, which the group first heard on February 5th (audio - 3m, video).
    • Raymond said the original bill “expands the purpose” of WA SECTF in addition to altering “some of the task force requirements,” particularly “recommended topics as well as extending the final report due date to January 2st, 2022.” Furthermore, the legislation “expands the eligible applicants under the technical assistance grant program,” he reported, and would “include all cannabis licenses rather than just retailers.” Finally, HB 1443 “establishes a pilot program administered through the [Washington State] Department of Commerce for technical assistance that would be established this year.”
    • Raymond next discussed the proposed substitute version of the bill, H-0907.2, from sponsoring Representative Melanie Morgan, revealing that the substitute would expect those receiving grants “to demonstrate completion of the project within 12 months of receiving the grant” though the licensee and Commerce officials had the ability to agree to “additional time to complete the project.”
      • Morgan is a WA SECTF Co-Chair.
    • The substitute also delayed “the start date of the pilot program to October 2nd, 2021” instead of August, he explained, and let pilot program grant recipients “request additional time beyond...the twelve month project completion requirement in the underlying bill” subject to approval by Commerce officials, matching the requirement with eventual assistance grant recipients. Raymond said the substitute clarified “assistance navigating the licensure process is an eligible grant activity for all licensees” by removing a reference that had specified retail licensees.
    • Raymond told committee members that the substitute edited social equity applicant criteria, “specifically one criterion: the time under which an applicant must have lived in a disproportionately impacted area to be considered a social equity applicant” from “at least five years during 1975 through 2015” in the original bill to having WSLCB “adopt a time under which applicants must live in a disproportionately impacted area, this must be established by rule and only after consultation with the [Washington State] Commission on African American Affairs and other commissions, agencies, and advocates.”
      • CAAA Commissioner Paula Sardinas, who is a WA SECTF Co-Chair and heads consulting firm FMS Global Strategies, testified in support of HB 1443.
    • The last change under the substitute was removal of a “requirement that the task force expenses must be jointly paid by the House and Senate.”

• When the bill came up for a vote, the two House appointees to WA SECTF differed on the merits of the proposed substitute as well as the veracity of their pledges to work together.
  • Morgan provided her view that the substitute bill would “expand the scope of the task force” which had been restricted to retail licensing to “also include processors, manufacturers, etcetera, in the industry” (audio - 2m, video).
    • She reviewed other changes around the later reporting deadline and removal of “the legislature from staffing the task force” as the Governor's Interagency Council on Health Disparities had been providing staff for the task force before responsibility could be transferred to the Washington State Office of Equity which was still being established.
      • On February 18th, Governor Jay Inslee announced Karen Johnson would be the first director of the newly created office, transferring over from her current position as Equity and Inclusion Administrator for the Washington State Department of Corrections (DOC). She was also a member of the Diversity, Equity and Inclusion Council at the Washington State Office of Financial Management. Johnson’s prior experience included working for the U.S. Department of Veterans Affairs and as “director for Tri-Love Ministries in Seattle.”
    • Morgan said the start date change had been “requested by the Department of Commerce” as their staff would “be distributing those grants, so they are hiring a new person to manage that program” and therefore needed “a little bit of extra time” to hire and prepare processes.
  • Representative Kelly Chambers, WA SECTF appointee for House Republicans, spoke up to say she was appreciative of Morgan’s work but her party members intended to oppose the bill. “While we agree with the need to address the social equity concerns” in the legal cannabis market, she said, “we have some concerns about some sections of the bill like the competitive grant program.” Chambers suggested working with the majority towards drafting revisions “that are more in line with the way some other departments work and some more standard business practices” (audio - 1m, video).
  • Morgan was grateful to Chambers “for at least considering the bill” but noted for the record she had “reached out to Representative Chambers before our last task force meeting to find out what her ideas [were] and I have not heard anything back.” Saying she was “put out a little bit” by the no votes, Morgan remarked that she had “asked in advance [of] us coming today to exec[utive session] it out, for any of your suggestions...but I am willing to work with you in the future” (audio - 1m, video).

• A party-line vote divided committee members but it was enough to move the bill out of committee with a do pass recommendation.
  • Chair Shelley Kloba had staff call the vote, and all five majority caucus members supported passage, while the four minority caucus members voted against passage of the substitute bill (audio - 2m, video).
  • After recommendation by WA House COG, the bill was passed to the Washington State House Appropriations Committee (WA House APP) which scheduled the bill for a hearing on February 19th and an executive session on February 22nd.

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