WA Legislature - Update
(January 22, 2024)

WA Legislature - Update (January 22, 2024) - Takeaways

Some legislators seemed eager to at least appear to be eager to earmark unapportioned cannabis excise tax revenue at the beginning of the third week of the 2024 regular session.

Here are some observations of the Washington State Legislature (WA Legislature) for Monday January 22nd, the 15th day of the 2024 regular session.

My top 3 takeaways:

  • On Friday January 19th, the Washington State Senate Labor and Commerce Committee (WA Senate LC) added an executive session for a cannabis excise tax revenue appropriation bill to their Monday meeting.
    • Senator Mark Mullet introduced SB 6272 (“Dedicating the state share of cannabis excise tax revenue to counties and cities”) on Thursday January 18th.  The legislation would substantially boost cannabis excise tax revenue distributions to local governments, albeit earmarked for law enforcement recruitment and retention along with other criminal justice purposes, by eliminating the standing appropriation to the State General Fund (“the principal state fund supporting the operation of the state”).
      • At publication time, Mullet was a democratic candidate for Washington State Governor who listed “Prioritize Safe Streets and Neighborhoods” as his second most important campaign priority, claiming, “Mark is committed to being a better financial partner with our cities and counties so they have the resources to hire more police officers and provide access to substance abuse and mental health treatment.”
    • As the bill had yet to be granted a public hearing, WA Senate LC members almost certainly planned to refer the legislation to the Washington State Senate Ways and Means Committee (WA Senate WM), the primary finance policy committee in the Senate.
      • At their Tuesday January 16th meeting, members referred Senator Keith Wagoner’s bill, SB 5404 (“Increasing cannabis revenue distributions to local governments”) to WA Senate WM.  At publication time, that bill had not been scheduled to be heard.
      • Mullet chaired the Washington State Joint Legislative Audit and Review Committee (JLARC) which oversaw and approved the final staff report on Appropriations and Expenditures of the Dedicated Cannabis Account on January 4th. While Mullet made no public inquiries about distributions to local governments, committee member Wagoner said he had been underwhelmed by the “paltry amount” of cannabis revenue distributed to local governments.
      • According to the JLARC report, between fiscal years 2015 and 2023 the State transferred more than $1B from the Account to the General Fund, representing less than 1% of all money in the fund each year, but with no restriction on how those funds could be spent. By way of contrast, local governments combined were granted slightly more than $100M from the Account during the same time period representing roughly 0.27% on average of their general fund revenue.
      • Mullet’s legislation would redirect roughly 36% of all State cannabis excise tax revenue to local governments.
  • On Monday, Republican representatives planned to introduce their own ideas for revision of cannabis excise tax revenue distributions and the first cannabis bill passed by the Senate was readied for referral in the House.
    • HB 2449 - “Concerning use of cannabis tax revenue for professional health care services.”
      • Representatives Spencer Hutchins, Chris Corry, and Joe Schmick had a different plan for the 32% of remaining dedicated cannabis account revenue otherwise swept into the State General Fund. Their legislation would create a new "professional health care services rate enhancement account" in the Treasury to receive the substantial funds envisioned.  Then, "Expenditures from the account may be used only for medicaid professional service rates in accordance with this chapter as follows: To make payments to health care providers and managed care organizations as specified in this chapter; and to medicaid managed care organizations for funding the nonfederal share of increased capitation payments."  The Washington State Health Care Authority (WA HCA) would determine eligible providers in rule.
      • The bill was drafted for referral to the Washington State Health Care and Wellness Committee (WA House HCW) where Schmick was the Ranking Minority Member and Hutchins was the Assistant Ranking Minority Member.
    • SB 5376 - “Allowing the sale of cannabis waste.”
  • Also on Monday, eight cannabis-related bills were scheduled for initial hearings or executive action in House and Senate policy committees.
    • 10:30am: WA Senate LC - Committee Meeting [ Event Details ]
      • Public Hearing
        • SB 6220 - “Concerning high THC cannabis products.”
        • SB 6271 - “Modifying the cannabis excise tax to consider THC concentration.”
          • [ Register Position ]
          • Introduced on Thursday January 18th by President Pro Tempore Karen Keiser and Stanford, their legislation would require the WSLCB to collect and report on data regarding the tetrahydrocannabinol (THC) concentration in regulated cannabis products, then “formulate a recommended approach and implementation plan for modifying the cannabis excise tax.”  The recommendation and “proposed modifications must be revenue neutral and propose a higher tax on products with a higher THC concentration relative to other products in the same category.”
          • Senator Patty Kuderer and Mullet subsequently joined as co-sponsors.
          • At publication time, an executive session on SB 6271 had not been scheduled.
      • Executive Session
        • SB 6272 - “Dedicating the state share of cannabis excise tax revenue to counties and cities.”
          • As the bill had yet to be granted a public hearing, WA Senate LC members almost certainly planned to refer the legislation to the WA Senate WM, the primary finance policy committee in the Senate.
    • 1:30pm: WA House RSG - Committee Meeting [ Event Details ]
    • 1:30pm: Washington State Senate Agriculture, Water, Natural Resources, and Parks Committee (WA Senate AWNP) - Committee Meeting [ Event Details ]
      • Public Hearing
        • SB 6209 - “Concerning hemp consumable products.”
          • [ Register Position ]
          • Introduced on Friday January 12th by Republican Senator Ann Rivers, the legislation would authorize “Hemp extract” as a lawful food ingredient in “Hemp consumable” products in Washington state.
          • Democrat Senator Marko Liias, a member of the committee where SB 6209 was scheduled to be heard, introduced a proposed substitute which was announced on Saturday January 20th. The language differed from the text introduced by Rivers primarily by replacing the annual certification hemp extract processors may voluntarily obtain with a "hemp consumable license" which the Washington State Department of Agriculture (WSDA) would administer.
            • The change may enable the Department to have more regulatory authority over licensees.
            • Here's a comparison between the original bill language and the proposed substitute.
          • The hearing on Monday would be on the proposed sub and an executive session on the legislation had already been scheduled for Thursday January 25th.