WA Senate LC - Committee Meeting
(February 6, 2023) - SB 5662 - Public Hearing

Proponents of a 2022 Seattle law on cannabis worker retention policies backed legislation expanding the mandate, but business associations warned against singling out one industry.

Here are some observations from the Monday February 6th Washington State Senate Labor and Commerce Committee (WA Senate LC) Committee Meeting.

My top 3 takeaways:

• The staff briefing on SB 5662, “Creating the cannabis employee job retention act,” indicated the bill was largely similar to Seattle ordinances passed in 2022 related to worker considerations when cannabis licenses were assumed by different owners (audio - 3m, video).
  • In February 2022, members of the Seattle City Council Finance and Housing Committee started hearing public concerns on worker retention and training in cannabis retail, and how that was impacting labor and social equity in the industry. Learning more aboutthe situationand gettinginput fromcity officials and the mayor’s office, the committee recommended threeordinances that August, then the full City Counciladopted a trio of ordinances in September. Of these, two focused on worker training and retention during cannabis business ownership changes, also called license assumption:
    • CB 120391 - "AN ORDINANCE establishing the City’s commitments and plans for supporting cannabis workers and supporting communities disproportionately harmed by the federal War on Drugs."
    • CB 120393 - "AN ORDINANCE relating to employment in Seattle; adding a new Chapter 8.38 to the Seattle Municipal Code; and amending Sections 3.02.125 and 14.20.025 of the Seattle Municipal Code."
    • The council also passed a social equity-centered ordinance at that time: CB 120392 - "AN ORDINANCE relating to licensing cannabis businesses in Seattle; establishing social equity applicant criteria for cannabis businesses; setting fees for cannabis businesses; expanding the purposes for which a cannabis license may be issued in the future; updating references in the code to ‘cannabis’; and amending Chapter 6.500 of the Seattle Municipal Code."
  • During the WA Senate LC hearing, Senior Staff Counsel Susan Jones mentioned the Seattle ordinance for worker retention along with another local law to support hotel workers retention before relaying detail in the bill analysis, which stated the legislation:
    • Creates the Cannabis Employee Job Retention Act to be administered by the Department of Labor and Industries (L&I).
    • Requires certain outgoing cannabis employers to provide, and certain incoming cannabis employers to utilize, a preferential hiring list when the cannabis business undergoes a change in control, and contains additional provisions regarding notice, compliance, records, protected rights, enforcement, appeals, and penalties.

• Two cannabis sector workers and a labor union negotiator spoke to the merits of the bill, calling it a way to add stability to a labor sector where they alleged workers were laid off during ownership changes and infrequently offered opportunities to reapply for their former positions.
  • Eight individuals registered their support for the bill (testifying, not testifying).
  • Sponsoring Senator Rebecca Saldaña said the subject matter of the law was “how I first got into cannabis…my first or second year here, looking at the cannabis industry, and how do we create more pathways for opportunities” for the workforce. Her aim was to further develop a cannabis “workforce, who are part of our community, [to] have an opportunity to continue to benefit” and “keep their jobs” during ownership transitions (audio - 2m, video).
    • Saldaña was also the sponsor of SB 5035, a 2019 law which increased penalties for wage theft. 
  • A panel of speakers shared stories of challenges they’d faced during ownership changes in cannabis retailers, including claims one licensee closed a store with three weeks notice, telling staff “good luck with the rest of your careers” and leaving them to re-apply with a new owner. Changes in license ownership could “destabilize” employee livelihoods and hurt worker retention in “the largest part of this workforce, the more than 20,000 front line, essential workers in the cannabis industry.”
    • Zion Grae-El, former Diego Pellicer budtender (audio - 1m, video)
    • Kristen Wells, former Ponder budtender (audio - 3m, video)
    • Amirah Ziada, UFCW 3000 Cannabis Organizing Coordinator (audio - 3m, video)
      • The UFCW 3000 website lists Ziada as an organization Contract Negotiator.
  • All three previously provided comments to Seattle officials during their development of ordinances in 2022:
    • Grae-El provided comments in February, April, August, and before the measures were adopted by the council in September.
    • Wells addressed council members in April.
    • Ziada gave public remarks that August.

• Two representatives of industry associations had concerns over how the bill would impact licensees attempting to change the focus of their business model, in addition to potentially conflicting with “at-will” employment laws in the state.
  • 28 individuals registered their opposition to the bill (testifying, not testifying).
  • Vicki Christophersen, Washington CannaBusiness Association (WACA) Executive Director and Lobbyist, had “grave concerns with provisions in this bill,” including that it only applied to the cannabis industry, it might interfere with changes in “the focus of [a] business” such as producers or processors, and also placed an “undue burden” on cannabis licensees. She offered an example of a retailer deciding to focus on serving medical cannabis patients (audio - 1m, video).
    • In November 2022, Washington State Liquor and Cannabis Board (WSLCB) leadership had reported a trend of stores with medical endorsements failing to stay compliant with rules for endorsed retailers following minimal oversight by the agency
  • Bob Battles, Association of Washington Business (AWB) Government Affairs Director, had similar views that SB 5662 “undermines the at-will employment status in Washington state” for the cannabis sector, and wasn’t a “balanced approach” to worker retention concerns. He further noted the bill involved issues of “rebuttable presumption,” interference in “day-to-day choices” of business operators, and that the retention problems outlined by supporters happened in other business sectors (audio - 2m, video).
  • Vice Chair Steve Conway inquired about federal notices related to the Worker Adjustment and Retraining Notification (WARN) Act, which applied to businesses with 100 workers or more. He asked if any state had lowered those notification requirements for specific industries, though staff didn’t have additional information prepared (audio - 1m, video).
  • Cannabis industry representatives had testified to Seattle officials that “all cannabis businesses in Washington are by definition small businesses” under the state Regulatory Fairness Act, which defines small businesses as “any business entity, including a sole proprietorship, corporation, partnership, or other legal entity, that is owned and operated independently from all other businesses, and that has fifty or fewer employees.”

Information Set