Washington State Legislature – Executive Sessions
(February 20-21, 2019)

Here are some observations of executive sessions for cannabis bills and related activity across several Washington State Legislature committees on Wednesday February 20th and Thursday February 21st, 2019.

My top 3 takeaways:

  • On Wednesday, the Senate Labor and Commerce Committee moved substitute bills for SB 5318, SB 5298, and SB 5296.
    • SB 5318 – “Reforming the compliance and enforcement provisions for marijuana licensees.”
      • This bill is the companion legislation to HB 1237, whose executive activity we describe in today’s third takeaway.
      • The committee previously hosted a public hearing for SB 5318 on January 31st.
      • Senior Staff Counsel Richard Rogers outlined the substitute bill proposed by Committee Chair Karen Keiser (PSSB 5318) and two amendments (video @ 8:06); the substitute was described as having these effects:
        • Removes the provisions that created an amnesty program for certain violations occurring prior to June 30, 2018.
        • Specifies conditions under which the LCB may issue a notice of correction, similar to the process identified for other agencies (DFW, DOH, DOL & DNR). The sections are placed in Chapter 43.05 – which requires a technical assistance program for regulatory agencies. Includes LCB rulemaking. (Sec. 2 & 3).
        • LCB’s adoption of rules must perfect and expand existing programs for compliance education for licensed marijuana businesses, and institute a program for voluntary compliance solely through the use of advice and consultation, including recommendations of methods to abate violations. This is modeled after the WSHA program. (Sec. 4).
        • Sets forth a program of voluntary compliance and the provision of advisory and consultative services. With the exception of violations with a direct or immediate relationship to public safety, the LCB visits may not result in citations or civil penalties. Modeled after the WSHA program. (Sec. 5).
        • Adds “notices to correct” to written warnings, in lieu of “penalties, sanctions, or other” violations. Requires the LCB to define regulatory violations that have no direct or immediate relationship to public safety. Allows the licensee to correct violations not related to public safety within a reasonable amount of time as defined by the board (versus 7 days). Lowers the standard of LCB review of certain license cancellations from clear, cogent and convincing to by a preponderance of the evidence. (Sec. 6).
        • LCB may not issue a violation if there is misconduct by an employee that was unpreventable and the licensee took reasonable actions to address the misconduct. The possible range of actions to address the misconduct may include additional education and training, or possible termination for serious or repeated misconduct. (Sec. 6).
        • Allows the LCB to consider a history of prior administrative violations when considering a license application or administrative actions against a licensee. Adds cross-references to the new programs listed above, when the LCB is considering a license suspension or cancellation. (Sec. 7).
        • If a settlement agreement is entered between a marijuana licensee and a hearing examiner at or after a settlement conference, the terms of the settlement agreement must be given substantial weight by the board. The board may only disapprove, modify, change, or add to the terms of the settlement agreement including terms addressing penalties and license restrictions, if the board finds the agreements to be clearly erroneous. (Sec. 8).
      • The bill also had two amendments proposed by King, both of which failed.
        • The first (AMD 5318 – Orchid) had additional requirements for licensees applying to move locations, including notification and ability of local governments to object, an expanded definition of “chronic illegal activity,” increased posting notice of licensee relocating, and mandatory public hearings for any person or entity objecting to WSLCB about either a relocation requests approval or denial. King argued that the amendment was mainly about stores near the state’s border and better local control. Keiser said she couldn’t support it as it was “beyond the scope of the actual, underlying bill.”
        • The other (AMD 5318 – Cherry) required WSLCB to assist any law enforcement agency concerned about resale or trafficking of legal products outside the state. King offered the amendment with similar intent as the first but focused on the WSLCB. Keiser raised a similar objection.
      • Keiser called SB 5318 “complicated” and told members she was committed to working with its sponsor, Senator Ann Rivers, to improve and pass it. Keiser said the process was “tried and true” based on experience with other agencies, particularly the Washington Industrial Safety and Health Act (WISHA), made compliance as important as enforcement, and helped licensees. King was gracious, and thought the bill was “moving in the right direction.” Senator Maureen Walsh concurred and said this helped the industry deal with “stigma,” lauded the state for not taking a “heavy handed approach,” and called the bill an important step. Vice Chair Steve Conway differed, mentioning the Cole Memorandum and I-502’s original faith in WSLCB to regulate the market. He said the bill needed more work.
      • The substitute bill passed and heads to the Ways and Means Committee next (video @ 33:17).
    • SB 5298 – “Regarding labeling of marijuana products.
      • The committee previously hosted a public hearing for SB 5298 on January 31st.
      • Rogers outlined the substitute bill (PSSB 5298) proposed by Keiser (video @ 11:09); from the summary of its effects on the original bill:
        • Restores LCB’s rulemaking authority for labeling.
        • Limits the new labeling provisions to those products which meet the DOH requirements that classifying them compliant marijuana products.
        • Does not create any civil liability on the part of the LCB or the state based on a marijuana licensee’s description of a structure or function claim or the product’s intended role.
        • Delays the effective date to January 1, 2020.
      • Keiser called for support, saying the measure was “particularly for medical marijuana patients” and that work would continue if the House would take up the issue. Ranking Member Curtis King was grateful for Keiser’s work and liked parts of the bill, but voted “without recommendation.” The bill was moved out of committee with a “do pass” recommendation by voice vote along caucus lines (video @ 22:30).
    • SB 5296, “Concerning the liquor and cannabis board,” would modify the powers of the WSLCB as regards alcohol rulemaking, and would also have substantive impacts across the agency’s other areas of responsibility.  The bill was sponsored by Chair Keiser.
      • According to the original bill summary, the measure:
        • Directs the Liquor and Cannabis Board (LCB) to initiate and maintain rule-making efforts to adopt rules to a range of subject matter areas concerning liquor.
        • Requires the LCB to make annual reports to the Legislature regarding specified rule-making activities.
        • Adds two legislators as ex officio members to the LCB [Board].
        • Makes technical corrections to the LCB’s statutes.
      • The committee previously hosted a public hearing for SB 5296 on January 22nd. Later that morning in caucus, WSLCB Board Chair Jane Rushford shared her perspective on the agency’s testimony on the bill.
      • In executive session this week, Rogers outlined the substitute bill proposed by Keiser (video @ 11:51). The substitute bill summary states it only “Makes technical and clarifying changes to the Liquor and Cannabis Board’s statutes.” The substitute removed “all substantive provisions and retains all the technical corrections” – including removal of the proposed change to the composition of the Board.
      • “This is not the same bill it started out to be,” said Keiser, “not by a long shot.” She applauded Rogers work updating WSLCB references in statute to say “Liquor and Cannabis” rather than the agency’s former title “Liquor Control.” Conway said alcohol and cannabis stakeholders recognize Keiser’s efforts to “simplify” the alcohol legislation process, and “separate, a little bit, the cannabis work and the liquor work.”
      • Keiser also announced that she and King would lead an “interim work project” to bring together stakeholders to “make real progress” on the issue.
      • The bill passed unanimously and heads to the Senate Rules Committee (video @ 44:05).
  • On Thursday, the Senate Law and Justice Committee recommended confirmation of the 2016 gubernatorial appointment of Russ Hauge as Chair of the Washington State Sentencing Guidelines Commission.
  • Also on Thursday, the House Commerce and Gaming Committee amended and moved HB 1237, HB 1466, and HB 1974 out of committee with “do pass” recommendations.
    • HB 1237“Reforming the compliance and enforcement provisions for marijuana licensees.”
      • This bill is the companion legislation to SB 5318, whose executive activity we described in today’s first takeaway.
      • Committee Counsel Peter Clodfelter briefed members on prospective changes (video @ 55:25).
      • Representative Steve Kirby proposed an amendment (H-1697.1) which had been previously scheduled for executive action at the committee’s February 19th public meeting. Kirby called the amendment and bill a “work in progress” to which he committed more effort to “make the most number of people happy.” The amendment was passed.
      • In discussion, Representative Brandon Vick told members “we’ve seen the reasons why” the bill was needed to help the WSLCB “get the house in order” while “not being, I guess, overly punitive.”
      • Substitute HB 1237, inclusive of the amendment, passed with a roll call vote. Representative Shelly Kloba voted against the bill (video @ 1:03:55).
    • HB 1466, “Banning marijuana billboards,” was discussed and passed without amendment.
      • The committee previously hosted a public hearing for HB 1466 on February 5th and had scheduled, but deferred, executive action on the bill four times.
      • Clodfelter briefed the committee (video @ 1:01:03) and a previously filed amendment (AMH COG CLOD 010) from Representative Melanie Morgan was withdrawn.
      • In discussion about the bill, Representative Bill Jenkin said his district had complaints about a prominent cannabis billboard leaving him with a “real problem” and predicted the minority caucus would be split on the bill. Vice Chair Kristine Reeves opposed the bill because it “limits freedom of speech.” Ranking Member Drew MacEwen said he wanted to see rulemaking already underway around cannabis advertising concluded and shared his concern about telling new retailers they couldn’t advertise in a way existing businesses had.
      • Chair Derek Stanford asked for a yes vote saying it was “good to keep these advertisements out of places where kids are likely to see them.”
      • The bill narrowly passed with Reeves, MacEwen, Assistant Ranking Member Kelly Chambers, Vick, and Morgan opposed (video @ 1:08:40).
    • HB 1974, “Establishing the Washington cannabis commission,” was amended and moved out of committee with a “do pass” recommendation.
      • The committee previously hosted a public hearing for HB 1974 on February 19th.
      • Clodfelter explained a new amendment to the legislation (video @ 1:01:57).
      • The amendment (AMH COG RAYM 019), proposed by Chair Stanford, added two items to the original bill’s list of three “research and educational campaign goals directed at cannabis producers that serve the needs of cannabis producers.“
        • “(1) Advance knowledge and practice of the production of cannabis in this state through the research and testing of methods to improve pest management, worker protection and safety training, energy efficiency, and environmental protection;”
        • “(4) Limit youth access and youth exposure to cannabis;”
      • The youth prevention language appeared to address a request made during the bill’s public hearing by Seth Dawson lobbying for the Washington Association for Substance Abuse and Violence Prevention (WASAVP). Stanford asked for the amendment’s adoption, and it was passed with a unanimous voice vote.
      • The Chair was also supportive of the overall bill, but Vick said he needed “more time to dive into this” and voiced two concerns:
        • “Commissions, in my opinion, tend to exist for marketing purposes and to grow the industry,” Vick said. He felt the bill’s restriction on marketing, while understandable, “…kind of begs the question of why we need the commission in general.”
        • Vick also claimed the “threshold” of 51% for imposing commission fees on producers was of concern.
      • The amended bill was passed by a roll call vote with Vick, MacEwen, and Jenkin opposed (video @ 1:13:19).

Here are shared documents for your review:

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