WA Senate LC - Committee Meeting
(January 10, 2023) - SB 5080 - Public Hearing

Most speakers welcomed WSLCB request legislation expanding the social equity program, though several testifying wanted to see changes to avoid “oversaturation” of the retail market.

Here are some observations from the Tuesday January 10th Washington State Senate Labor and Commerce Committee (WA Senate LC) Committee Meeting.

My top 3 takeaways:

• WA Senate LC Counsel Matt Shepard-Koningsor briefed on SB 5080, "Expanding and improving the social equity in cannabis program" (audio - 3m, video).
  • A request bill from the Washington State Liquor and Cannabis Board (WSLCB), Shepard-Koningsor noted the legislation’s relation to recommendations from the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) and the social equity program at WSLCB. He then reviewed the bill analysis:
    • Amends the definitions of disproportionately impacted area, social equity applicant, and social equity plan in the Cannabis Social Equity Program (Program).
    • Incentivizes current cannabis licensees to submit a social equity plan to the Liquor and Cannabis Board (LCB) by providing a one-time, onelicense annual fee reimbursement.
    • Authorizes LCB to increase the number of available cannabis retailer licenses for the Program based on population data, and contains provisions regarding portability of Program licenses.
    • Requires LCB to select a third-party contractor to review and score Program applications.
    • Shepard-Koningsor indicated the bill limited re-sale of the licenses to individuals who qualified as equity applicants for the first five years after issuance.
  • Though a fiscal note on the bill wasn’t available, Shepard-Koningsor told the committee WSLCB staff estimated it would cost $5 million through fiscal year (FY) 2025, but agency officials believed they would be covered by additional revenue generated by the cannabis sector.

• The bill sponsor and eight speakers extolled the virtues of the legislation’s potential impact on communities they identified as being left out of the adult-use cannabis market.
  • 84 individuals registered their support for the bill (testifying, not testifying).
  • WA Senate LC and WA SECTF Co-Chair Senator Rebecca Saldaña explained that she sponsored the bill as a way to “rectify and recognize" cannabis policy had "unintended or intended" disproportionate impacts of “both the War on Drugs and the way that our cannabis industry got implemented.” She stressed that she and fellow committee member and appointee Senator Curtis King had heard from many individuals and groups, and that SB 5080 didn’t reflect the totality of WA SECTF recommendations, they were a "very thoughtful and intentional step forward” (audio - 4m, video)
  • From WSLCB, Board Member Ollie Garrett argued in favor of the bill, as she felt “we need more flexibility to help those harmed by the war on drugs” find opportunities in the legal market (audio - 4m, video). Then, Director of Policy and External Affairs Justin Nordhorn praised the legislation’s alterations to social equity plans, the number of equity licenses, as well as limits on resale of equity licenses for five years (audio - 2m, video).
  • A panel of Black Excellence in Cannabis (BEC) members supported the bill as a partial solution to an “illusion of inclusion,” but called for an additional 100 producer/processor licenses so social equity licensees could be in more parts of the industry as well as increased oversight of WSLCB by an entity such as the Washington State Commission on African American Affairs (CAAA) or the Washington State Office of Equity.
  • Other testimony favorable to the bill was voiced by representatives for the City of Seattle and the Washington Sun and Craft Growers Association (WSCA).
  • Don Skakie of Homegrow Washington backed the bill and offered amended language to legalize limited home growing of cannabis by adults that was similar to 2021 legislation on the topic, and reflective of final recommendations from WA SECTF (audio - 2m, video, draft bill, reasoning).

• Three speakers testified as “other,” receptive to the bill if it was modified in ways to keep the retail market from being oversaturated; after having not heard remote speakers, the chair promised that testimony on the bill would resume at a subsequent hearing.
  • Four individuals registered as “other,” or against the bill (testifying, not testifying).
  • Washington CannaBusiness Association (WACA) Executive Director and Lobbyist Vicki Christophersen expressed reservations that a single jurisdiction might end up with the majority of new social equity businesses which she claimed would undermine the value of both new and existing cannabis businesses there. She also had concerns about increased licensing powers residing with WSLCB rather than lawmakers, and encouraged re-allocating unused producer or processor licenses instead of adding to the existing license pool (audio - 2m, video).
  • Washington State Association of Counties (WSAC) representative Paul Jewel asked that “spatial” distribution be a factor considered by WSLCB staff so as not to not have retail consolidation in unincorporated areas of Washington counties. He was particularly concerned about counties where municipalities already had cannabis bans and moratoriums (audio - 1m, video).
  • Craft Cannabis Coalition (CCC) Executive Director Adán Espino was also mindful of retail saturation, claiming that 58% of cannabis retailers weren’t profitable nationwide and faced public safety challenges. He advised making community reinvestment money which had been added into the 2022 supplemental budget a permanent addition to cannabis appropriations (audio - 3m, video).
  • Chair Karen Keiser said that speakers who had signed up to testify remotely would be given the opportunity to speak at the beginning of the committee’s next public hearing on Thursday January 12th (audio - 1m, video).

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