Inactive cannabis producers

AN ACT Relating to the suspension of inactive cannabis producer 1
licenses; amending RCW 69.50.331; and creating a new section.2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
NEW SECTION. Sec. 1. The legislature finds that a well-balanced 4
regulatory structure for the cannabis industry fosters economic 5
growth while preserving Washington's high regulatory standards. This 6
framework is essential for maintaining a vibrant and sustainable 7
cannabis marketplace that serves all Washingtonians. However, 8
oversupply issues have arisen from the issuance of excessive cannabis 9
producer licenses, creating uncertainty in the market. Suspending 10
inactive cannabis producer licenses until an interstate or federal 11
cannabis marketplace is established will address this challenge and 12
promote stability.13
Sec. 2. RCW 69.50.331 and 2023 c 220 s 2 are each amended to 14
read as follows: 15
(1) For the purpose of considering any application for a license 16
to produce, process, research, transport, or deliver cannabis, 17
useable cannabis, cannabis concentrates, or cannabis-infused products 18
subject to the regulations established under RCW 69.50.385, or sell 19
cannabis, or for the renewal of a license to produce, process, 20
H-0604.1
HOUSE BILL 1410
State of Washington 69th Legislature 2025 Regular Session
By Representative Low
Read first time 01/20/25. Referred to Committee on Consumer
Protection & Business.
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research, transport, or deliver cannabis, useable cannabis, cannabis 1
concentrates, or cannabis-infused products subject to the regulations 2
established under RCW 69.50.385, or sell cannabis, the board must 3
conduct a comprehensive, fair, and impartial evaluation of the 4
applications timely received. 5
(a) The board may cause an inspection of the premises to be made, 6
and may inquire into all matters in connection with the construction 7
and operation of the premises. For the purpose of reviewing any 8
application for a license and for considering the denial, suspension, 9
revocation, cancellation, or renewal or denial thereof, of any 10
license, the board may consider any prior criminal arrests or 11
convictions of the applicant, any public safety administrative 12
violation history record with the board, and a criminal history 13
record information check. The board may submit the criminal history 14
record information check to the Washington state patrol and to the 15
identification division of the federal bureau of investigation in 16
order that these agencies may search their records for prior arrests 17
and convictions of the individual or individuals who filled out the 18
forms. The board must require fingerprinting of any applicant whose 19
criminal history record information check is submitted to the federal 20
bureau of investigation. The provisions of RCW 9.95.240 and of 21
chapter 9.96A RCW do not apply to these cases. Subject to the 22
provisions of this section, the board may, in its discretion, grant 23
or deny the renewal or license applied for. Denial may be based on, 24
without limitation, the existence of chronic illegal activity 25
documented in objections submitted pursuant to subsections (7)(c) and 26
(10) of this section. Authority to approve an uncontested or 27
unopposed license may be granted by the board to any staff member the 28
board designates in writing. Conditions for granting this authority 29
must be adopted by rule. 30
(b) No license of any kind may be issued to: 31
(i) A person under the age of 21 years; 32
(ii) A person doing business as a sole proprietor who has not 33
lawfully resided in the state for at least six months prior to 34
applying to receive a license; 35
(iii) A partnership, employee cooperative, association, nonprofit 36
corporation, or corporation unless formed under the laws of this 37
state, and unless all of the members thereof are qualified to obtain 38
a license as provided in this section; or 39
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(iv) A person whose place of business is conducted by a manager 1
or agent, unless the manager or agent possesses the same 2
qualifications required of the licensee. 3
(2)(a) The board may, in its discretion, subject to RCW 4
43.05.160, 69.50.563, 69.50.562, 69.50.334, and 69.50.342(3) suspend 5
or cancel any license; and all protections of the licensee from 6
criminal or civil sanctions under state law for producing, 7
processing, researching, or selling cannabis, cannabis concentrates, 8
useable cannabis, or cannabis-infused products thereunder must be 9
suspended or terminated, as the case may be. 10
(b) The board must immediately suspend the license of a person 11
who has been certified pursuant to RCW 74.20A.320 by the department 12
of social and health services as a person who is not in compliance 13
with a support order. If the person has continued to meet all other 14
requirements for reinstatement during the suspension, reissuance of 15
the license is automatic upon the board's receipt of a release issued 16
by the department of social and health services stating that the 17
licensee is in compliance with the order. 18
(c)(i) The board must suspend a cannabis producer's license 19
issued under RCW 69.50.325 if no activity has been recorded on the 20
license between July 1, 2023, and December 31, 2024.21
(ii) A cannabis producer's license suspended under (c)(i) of this 22
subsection must be reissued to the licensee when:23
(A) Federal law allows for the interstate transfer of cannabis 24
between authorized cannabis-related businesses; or25
(B) The United States department of justice issues an opinion or 26
memorandum allowing or tolerating the interstate transfer of cannabis 27
between authorized cannabis-related businesses.28
(iii) For the purposes of this subsection, "no activity" refers 29
to a cannabis producer's license with a unified business identifier 30
number under which no business activity has been reported to the 31
department of revenue.32
(d) The board may request the appointment of administrative law 33
judges under chapter 34.12 RCW who shall have power to administer 34
oaths, issue subpoenas for the attendance of witnesses and the 35
production of papers, books, accounts, documents, and testimony, 36
examine witnesses, receive testimony in any inquiry, investigation, 37
hearing, or proceeding in any part of the state, and consider 38
mitigating and aggravating circumstances in any case and deviate from 39
any prescribed penalty, under rules the board may adopt.40
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(((d))) (e) Witnesses must be allowed fees and mileage each way 1
to and from any inquiry, investigation, hearing, or proceeding at the 2
rate authorized by RCW 34.05.446. Fees need not be paid in advance of 3
appearance of witnesses to testify or to produce books, records, or 4
other legal evidence. 5
(((e))) (f) In case of disobedience of any person to comply with 6
the order of the board or a subpoena issued by the board, or any of 7
its members, or administrative law judges, or on the refusal of a 8
witness to testify to any matter regarding which he or she may be 9
lawfully interrogated, the judge of the superior court of the county 10
in which the person resides, on application of any member of the 11
board or administrative law judge, compels obedience by contempt 12
proceedings, as in the case of disobedience of the requirements of a 13
subpoena issued from said court or a refusal to testify therein.14
(3) Upon receipt of notice of the suspension or cancellation of a 15
license, the licensee must forthwith deliver up the license to the 16
board. Where the license has been suspended only, the board must 17
return the license to the licensee at the expiration or termination 18
of the period of suspension. The board must notify all other 19
licensees in the county where the subject licensee has its premises 20
of the suspension or cancellation of the license; and no other 21
licensee or employee of another licensee may allow or cause any 22
cannabis, cannabis concentrates, useable cannabis, or cannabis-23
infused products to be delivered to or for any person at the premises 24
of the subject licensee. 25
(4) Every license issued under this chapter is subject to all 26
conditions and restrictions imposed by this chapter or by rules 27
adopted by the board to implement and enforce this chapter. All 28
conditions and restrictions imposed by the board in the issuance of 29
an individual license must be listed on the face of the individual 30
license along with the trade name, address, and expiration date.31
(5) Every licensee must post and keep posted its license, or 32
licenses, in a conspicuous place on the premises. 33
(6) No licensee may employ any person under the age of 21 years.34
(7)(a) Before the board issues a new or renewed license to an 35
applicant it must give notice of the application to the chief 36
executive officer of the incorporated city or town, if the 37
application is for a license within an incorporated city or town, or 38
to the county legislative authority, if the application is for a 39
license outside the boundaries of incorporated cities or towns, or to 40
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the tribal government if the application is for a license within 1
Indian country, or to the port authority if the application for a 2
license is located on property owned by a port authority.3
(b) The incorporated city or town through the official or 4
employee selected by it, the county legislative authority or the 5
official or employee selected by it, the tribal government, or port 6
authority has the right to file with the board within twenty days 7
after the date of transmittal of the notice for applications, or at 8
least thirty days prior to the expiration date for renewals, written 9
objections against the applicant or against the premises for which 10
the new or renewed license is asked. The board may extend the time 11
period for submitting written objections upon request from the 12
authority notified by the board. 13
(c) The written objections must include a statement of all facts 14
upon which the objections are based, and in case written objections 15
are filed, the city or town or county legislative authority may 16
request, and the board may in its discretion hold, a hearing subject 17
to the applicable provisions of Title 34 RCW. If the board makes an 18
initial decision to deny a license or renewal based on the written 19
objections of an incorporated city or town or county legislative 20
authority, the applicant may request a hearing subject to the 21
applicable provisions of Title 34 RCW. If a hearing is held at the 22
request of the applicant, board representatives must present and 23
defend the board's initial decision to deny a license or renewal.24
(d) Upon the granting of a license under this title the board 25
must send written notification to the chief executive officer of the 26
incorporated city or town in which the license is granted, or to the 27
county legislative authority if the license is granted outside the 28
boundaries of incorporated cities or towns. 29
(8)(a) Except as provided in (b) through (e) of this subsection, 30
the board may not issue a license for any premises within 1,000 feet 31
of the perimeter of the grounds of any elementary or secondary 32
school, playground, recreation center or facility, child care center, 33
public park, public transit center, or library, or any game arcade 34
admission to which is not restricted to persons aged 21 years or 35
older. 36
(b) A city, county, or town may permit the licensing of premises 37
within 1,000 feet but not less than 100 feet of the facilities 38
described in (a) of this subsection, except elementary schools, 39
secondary schools, and playgrounds, by enacting an ordinance 40
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authorizing such distance reduction, provided that such distance 1
reduction will not negatively impact the jurisdiction's civil 2
regulatory enforcement, criminal law enforcement interests, public 3
safety, or public health. 4
(c) A city, county, or town may permit the licensing of research 5
premises allowed under RCW 69.50.372 within 1,000 feet but not less 6
than 100 feet of the facilities described in (a) of this subsection 7
by enacting an ordinance authorizing such distance reduction, 8
provided that the ordinance will not negatively impact the 9
jurisdiction's civil regulatory enforcement, criminal law 10
enforcement, public safety, or public health. 11
(d) The board may license premises located in compliance with the 12
distance requirements set in an ordinance adopted under (b) or (c) of 13
this subsection. Before issuing or renewing a research license for 14
premises within 1,000 feet but not less than 100 feet of an 15
elementary school, secondary school, or playground in compliance with 16
an ordinance passed pursuant to (c) of this subsection, the board 17
must ensure that the facility: 18
(i) Meets a security standard exceeding that which applies to 19
cannabis producer, processor, or retailer licensees;20
(ii) Is inaccessible to the public and no part of the operation 21
of the facility is in view of the general public; and22
(iii) Bears no advertising or signage indicating that it is a 23
cannabis research facility. 24
(e) The board must issue a certificate of compliance if the 25
premises met the requirements under (a), (b), (c), or (d) of this 26
subsection on the date of the application. The certificate allows the 27
licensee to operate the business at the proposed location 28
notwithstanding a later occurring, otherwise disqualifying factor.29
(f) The board may not issue a license for any premises within 30
Indian country, as defined in 18 U.S.C. Sec. 1151, including any fee 31
patent lands within the exterior boundaries of a reservation, without 32
the consent of the federally recognized tribe associated with the 33
reservation or Indian country. 34
(9) A city, town, or county may adopt an ordinance prohibiting a 35
cannabis producer or cannabis processor from operating or locating a 36
business within areas zoned primarily for residential use or rural 37
use with a minimum lot size of five acres or smaller.38
(10) In determining whether to grant or deny a license or renewal 39
of any license, the board must give substantial weight to objections 40
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from an incorporated city or town or county legislative authority 1
based upon chronic illegal activity associated with the applicant's 2
operations of the premises proposed to be licensed or the applicant's 3
operation of any other licensed premises, or the conduct of the 4
applicant's patrons inside or outside the licensed premises. "Chronic 5
illegal activity" means (a) a pervasive pattern of activity that 6
threatens the public health, safety, and welfare of the city, town, 7
or county including, but not limited to, open container violations, 8
assaults, disturbances, disorderly conduct, or other criminal law 9
violations, or as documented in crime statistics, police reports, 10
emergency medical response data, calls for service, field data, or 11
similar records of a law enforcement agency for the city, town, 12
county, or any other municipal corporation or any state agency; or 13
(b) an unreasonably high number of citations for violations of RCW 14
46.61.502 associated with the applicant's or licensee's operation of 15
any licensed premises as indicated by the reported statements given 16
to law enforcement upon arrest. 17
(11) The board may not issue a cannabis retail license for any 18
premises not currently licensed if: 19
(a) The board receives a written objection from the legislative 20
authority of an incorporated city or town, or county legislative 21
authority, relating to the physical location of the proposed 22
premises; 23
(b) The objection to the location from the incorporated city or 24
town, or county legislative authority, is received by the board 25
within 20 days of the board notifying the incorporated city or town, 26
or county legislative authority, of the proposed cannabis retail 27
location; and 28
(c) The objection to the issuance of a cannabis retail license at 29
the specified location is based on a preexisting local ordinance 30
limiting outlet density in a specific geographic area. For purposes 31
of this subsection (11), a preexisting local ordinance is an 32
ordinance enacted and in effect before the date the applicant submits 33
an application for a cannabis retail license to the board identifying 34
the premises proposed to be licensed. No objection related to the 35
physical location of a proposed premises may be made by a local 36
government under this subsection (11) based on a local ordinance 37
enacted after the date the applicant submits an application for a 38
cannabis retail license to the board identifying the premises 39
proposed to be licensed. 40
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(12) After January 1, 2024, all cannabis licensees are encouraged 1
but are not required to submit a social equity plan to the board. 2
Upon confirmation by the board that a cannabis licensee who is not a 3
social equity applicant, and who does not hold a social equity 4
license issued under RCW 69.50.335, has submitted a social equity 5
plan, the board must within 30 days reimburse such a licensee an 6
amount equal to the cost of the licensee's annual cannabis license 7
renewal fee. The license renewal fee reimbursement authorized under 8
this subsection is subject to the following limitations:9
(a) The board may provide reimbursement one time only to any 10
licensed entity; and 11
(b) Any licensed entity holding more than one cannabis license is 12
eligible for reimbursement of the license renewal fee on only one 13
license. 14
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