July marked five years of legal recreational cannabis in Washington. Many of the issues with the marketplace that arose early on have worked themselves out. There is still plenty of room for improvement, however, and the WSLCB used the occasion to put forth some ambitious proposals.
“This summer marked the five-year point of legal retail cannabis sales in Washington State,” said WSLCB Director Rick Garza in a press release. “These proposals reflect the Board’s recognition of both the advances the market has made as well as segments that have been underserved or at a competitive disadvantage.”
The policy proposals attempt to remedy three issues. Tier 1 producers getting pushed out of the marketplace by bigger and higher-earning farms, a lack of access to medical-grade cannabis for medical patients, and social equity in the cannabis industry.
Tier 1 Changes
“The first proposal would grant the smallest cannabis growers [Tier I producers] retail privileges for medical cannabis products and medical patients,” says the WSLCB’s statement. “Medical cannabis retail access opportunities, if approved by local government, could include home delivery, sales directly from production sites, or through a limited number of shared retail outlets open no more than two days per month.”
This proposal is the one getting the most pushback. Cannabis professionals from across the industry have expressed dismay.
“It’s discriminatory. The whole tier system is stupid anyway,” TJ Werth, owner of Top Shelf, a Tier 3 producer told The Sesh. “If anyone should be delivering to patients, it’s retailers.”
It’s not just Tier 3 producers who have issues with the proposal, retailers, and smaller producers have all expressed concerns.
“Our members strongly oppose changing the existing law to allow Tier 1s to sell directly to consumers,” Aaron Pickus spokesperson for the Washington CannaBusiness Association told The Sesh.
In a letter written to the WSLCB regarding the proposed legislative changes, WACA called this proposal ‘extremely problematic’ and went on to argue against the proposal.
“The drafters of Initiative 502 specifically created a system that is not vertically integrated,” wrote WACA Executive Director Vicki Christopherson. “Producers, processors, and retailers of all sizes built their businesses based on this structure. Changes to that principle that was a foundation of the initiative must be considered with great caution.”
Of course, not everyone is opposed, Paige Berger, CEO of Hygge Farms in Onalaska told the AP she was excited about the proposal and felt that it would help her expand her brand.
Social Equity in Cannabis
The second proposal put forth by the WSLCB attempts to address social equity in the cannabis industry. The board expressed concern that cannabis prohibition unfairly impacted communities of color, and now those same communities are being shut out of the industry due to financial and regulatory barriers. The second proposal attempts to remedy that.
“Under the WSLCB proposal, a limited number of additional cannabis retail licenses are prioritized for people of color, veterans, and women,” The statement reads. “The new retail licenses would come from local government requests for additional retail stores in their jurisdictions, as well as re-issuance of a small number of previously granted but now discontinued licenses.”
The plan also includes a grant program that would provide technical assistance to women, veterans, and minority entrepreneurs. The grants would be small and competitive.
This proposal, unlike the first, has more widespread support across the industry.
“We support the Liquor and Cannabis Board’s proposed social equity program and believe there is an opportunity to go even further,” Pickus wrote. “That’s why we have proposed legislation that would create a fund supported by a 1% transaction fee on all cannabis transactions over $500,000 in Washington State.”
The creation of a new Equity Fund, which would “lower financial barriers for prospective and current license holders representing a diversity of race, color, national origin, religion, sex, age, or disability in the legal cannabis marketplace,” is WACA’s 2020 legislative goal. The fund is backed by legislators.
“Our state is proud to have led the way in legalizing cannabis, but that was only one step in addressing historic injustices created by the War on Drugs,” said Representative Kristine Reeves (D-30). “That’s why I am looking forward to working with my colleagues to create a new statewide loan fund to increase access to capital and more opportunity for women and minority license-holders in the cannabis industry.”
The WSLCB passed along its proposals to Governor Jay Inslee’s office in mid-September. When asked for comment on the proposals Deputy Director of Communications for Governor Jay Inslee’s office Tara Lee replied, “We are currently in the process of reviewing.”
Before these proposals were made, other regulatory bodies have taken on responsibilities that previously belonged to the WSLCB. Pesticide and heavy metal testing lab accreditation will be the responsibility of the Washington State Department of Ecology by 2024. The Department of Financial Institutions will be helping oversee cannabis business structures. This will allow the WSLCB to focus on the issues addressed in these proposals.
Medical access and social equity in cannabis are multi-faceted problems, that will require multi-faceted solutions. Change-makers and leaders all over Washington should be raising their voices and looking for ways to improve Washington state’s cannabis policy. Creating an industry from scratch isn’t an easy feat, but it provides unique and exciting opportunities. And the five-year mark is the perfect time to reflect and try to improve upon the emerging industry.