Cannabis social equity prg.

AN ACT Relating to extending the cannabis social equity program 1
to evaluate the program and implement efficiencies; amending RCW 2
69.50.335; creating a new section; and declaring an emergency.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. The legislature intends to extend and 5
evaluate the cannabis social equity program, and conduct a review and 6
analysis of the first round of licensing and grant awards that was 7
recently conducted before 2025, to support the successful 8
implementation of the cannabis social equity program. By requiring 9
the liquor and cannabis board, in consultation with the department of 10
commerce when appropriate, to evaluate the cannabis social equity 11
program as provided in this act and submit a report with findings and 12
policy options to the governor and legislature by December 1, 2025, 13
the legislature will have an opportunity in the 2026 legislative 14
session to make any policy changes the legislature deems appropriate, 15
before a second and subsequent rounds of licensing opening in the 16
cannabis social equity program. The legislature also intends to 17
extend the cannabis social equity program an additional two years 18
until July 1, 2034. The evaluation required by this act must include 19
opportunities for public feedback, and the identification of any 20
provisions of law or rule and any economic, market, or practical 21
H-0183.2
HOUSE BILL 1551
State of Washington 69th Legislature 2025 Regular Session
By Representatives Reeves, Entenman, Morgan, Kloba, Ormsby, Santos,
Doglio, and Hill
Read first time 01/23/25. Referred to Committee on Consumer
Protection & Business.
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factors that effectively prevent or hinder the successful opening, 1
operation, and business success of cannabis businesses licensed under 2
the cannabis social equity program. This will provide the legislature 3
with information to ensure policies are in place to support 4
successful and efficient implementation of the program.5
Sec. 2. RCW 69.50.335 and 2023 c 220 s 3 are each amended to 6
read as follows: 7
(1)(a) ((Beginning December 1, 2020, and )) Subject to subsection 8
(6) of this section, until July 1, ((2032)) 2034, cannabis retailer 9
licenses, cannabis processor licenses, and cannabis producer licenses 10
that have been subject to forfeiture, revocation, or cancellation by 11
the board, or cannabis retailer licenses that were not previously 12
issued by the board but could have been issued without exceeding the 13
limit on the statewide number of cannabis retailer licenses 14
established before January 1, 2020, by the board, may be issued or 15
reissued to an applicant who meets the cannabis retailer license, 16
cannabis processor license, or cannabis producer license requirements 17
of this chapter. 18
(b) In accordance with (a) of this subsection, but subject to 19
subsection (6) of this section, the board may issue or reissue:20
(i) Up to 100 cannabis processor licenses immediately; and21
(ii) Beginning January 1, 2025, up to 10 cannabis producer 22
licenses, which must be issued in conjunction with a cannabis 23
processor license. 24
(c) In addition to the cannabis retailer licenses and cannabis 25
producer licenses that may be issued under (a) and (b) of this 26
subsection, beginning January 1, 2023, and continuing every three 27
years until July 1, ((2032)) 2034, the board may, with the approval 28
of the legislature through the passage of a bill, increase the number 29
of cannabis retailer licenses and cannabis producer licenses for the 30
social equity program based on: 31
(i) The most recent census data available as of January 1, 2023; 32
and 33
(ii) The annual population estimates published by the office of 34
financial management. 35
(d) In addition to the cannabis retailer licenses that may be 36
issued under (a) of this subsection, beginning January 1, 2024, and 37
until July 1, ((2032)) 2034, the board may issue up to 52 cannabis 38
retailer licenses for the social equity program. 39
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(e)(i) At the time of licensure, all licenses issued under the 1
social equity program under this section may be located in any city, 2
town, or county in the state that allows cannabis retail, cannabis 3
production, or cannabis processing business activities, as 4
applicable, at the proposed location, regardless of:5
(A) Whether a cannabis retailer license, cannabis producer 6
license, or cannabis processor license was originally allocated to or 7
issued in another city, town, or county; and 8
(B) The maximum number of retail cannabis licenses established by 9
the board for each county under RCW 69.50.345. 10
(ii) The board must adopt rules establishing a threshold of the 11
number of licenses created by this section that can be located in 12
each county. 13
(f) After a social equity license has been issued under this 14
section for a specific location, the location of the licensed 15
business may not be moved to a city, town, or county different from 16
the city, town, or county for which it was initially licensed.17
(2)(a) In order to be considered for a cannabis retailer license, 18
cannabis processor license, or cannabis producer license under 19
subsection (1) of this section, an applicant must be a social equity 20
applicant and submit required cannabis license materials to the 21
board. If the application proposes ownership by more than one person, 22
then at least 51 percent of the proposed ownership structure must 23
reflect the qualifications of a social equity applicant.24
(b) Persons holding an existing cannabis retailer license or 25
title certificate for a cannabis retailer business in a local 26
jurisdiction subject to a ban or moratorium on cannabis retail 27
businesses may apply for a license under this section.28
(3)(a) In determining the priority for issuance of a license 29
among applicants, the board must select a third-party contractor to 30
identify and score social equity applicants, using a scoring rubric 31
developed by the board. The board must rely on the score provided by 32
the third-party contractor in issuing licenses. 33
(b) The board may deny any application submitted under this 34
subsection if: 35
(i) The board determines that, upon the advice of the third-party 36
contractor, the application does not meet the social equity licensing 37
requirements of this chapter; or 38
(ii) The board determines the application does not otherwise meet 39
licensing requirements. 40
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(4) The board must adopt rules to implement this section. Prior 1
to adopting any rule implementing this section, the board must 2
consider advice on the social equity program from individuals the 3
program is intended to benefit. Rules may also require that licenses 4
awarded under this section only be transferred to or assumed by 5
individuals or groups of individuals who comply with the requirements 6
for initial licensure as a social equity applicant for a period of at 7
least five years from the date of initial licensure.8
(5) The annual fee for issuance, reissuance, or renewal for any 9
license under this section must be waived through July 1, ((2032)) 10
2034. 11
(6)(a) Beginning on the effective date of this section through 12
June 30, 2026, the board may not open a new license application 13
window through the cannabis social equity program and may not issue 14
or reissue a cannabis license under this section, in order for an 15
evaluation of the program to be conducted as provided in this 16
subsection, to ensure successful implementation of the cannabis 17
social equity program.18
(b) By December 1, 2025, and within existing resources, the 19
board, in consultation with the department of commerce when specified 20
in this subsection, shall evaluate the cannabis social equity program 21
as provided in this subsection and submit a report to the governor 22
and appropriate committees of the legislature with findings and 23
policy options. In conducting the evaluation, the board shall provide 24
opportunities for public comment on the cannabis social equity 25
program from communities throughout Washington. The evaluation must 26
include the following components:27
(i) A review of feedback received by the board in public comments 28
while the board implements this subsection from individuals the 29
program is intended to benefit, the public, and the cannabis 30
industry;31
(ii) An examination of the issuance and reissuance of cannabis 32
retailer licenses that occurred before January 1, 2025, under the 33
provisions of chapter 236, Laws of 2020, including a comparative 34
analysis of the applicants who successfully secured a location and 35
were issued a cannabis retailer license relative to applicants who 36
remain pending but were issued a preliminary letter of approval by 37
the board;38
(iii) An examination, in consultation with the department of 39
commerce, of the awarding of grants and the provision of mentorship 40
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under RCW 43.330.540 and opportunities for the alignment of the 1
board's implementation of this section with the department of 2
commerce's implementation of RCW 43.330.540; 3
(iv) The demographic information about owners of licensed 4
cannabis businesses who became licensed under the cannabis social 5
equity program to the extent such information is available or 6
obtainable by the board;7
(v) The identification of any provisions of law or rule and any 8
economic, market, or practical factors that effectively prevent or 9
hinder the successful opening, operation, and business success of 10
cannabis businesses licensed under the cannabis social equity 11
program; and12
(vi) An examination of the impact of provisions in laws and rules 13
on cannabis licensees in the cannabis social equity program with 14
respect to: (A) Permissible locations for the siting of licensed 15
cannabis businesses including distance restrictions in RCW 16
69.50.331(8), zoning or other location restrictions in local 17
government ordinances, and local written objections under RCW 18
69.50.331(11); (B) the mobility of cannabis licenses to or between 19
jurisdictions; (C) the ability of persons holding an existing 20
cannabis retailer license or title certificate for a cannabis 21
retailer business in a local jurisdiction subject to a ban or 22
moratorium on cannabis retail businesses to apply for a cannabis 23
license under this section; (D) prioritizing license applications 24
through use of a third-party contractor using a scoring rubric 25
developed by the board; (E) restrictions on the transfer or 26
assumption of a cannabis license issued through the cannabis social 27
equity program other than to individuals or groups of individuals who 28
comply with the requirements for initial licensure as a social equity 29
applicant for a period of at least five years from the date of 30
initial licensure; and (F) the definition of a "social equity 31
applicant."32
(c) On July 1, 2026, the restriction on the board opening a new 33
license application window under the cannabis social equity program 34
or issuing or reissuing a cannabis license under this section ends.35
(7) The definitions in this subsection apply throughout this 36
section unless the context clearly requires otherwise.37
(a) "Disproportionately impacted area" means a census tract or 38
comparable geographic area within Washington state where community 39
members were more likely to be impacted by the war on drugs. These 40
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areas must be determined in rule by the board, in consultation with 1
the office of equity, using a standardized statistical equation to 2
identify areas with demographic indicators consistent with 3
populations most impacted by the war on drugs. These areas must be 4
assessed to account for demographic changes in the composition of the 5
population over time. Disproportionately impacted areas must include 6
census tracts or comparable geographic areas in the top 15th 7
percentile in at least two of the following demographic indicators of 8
populations most impacted by the war on drugs: 9
(i) The area has a high rate of people living under the federal 10
poverty level; 11
(ii) The area has a high rate of people who did not graduate from 12
high school; 13
(iii) The area has a high rate of unemployment; or14
(iv) The area has a high rate of people receiving public 15
assistance. 16
(b) "Social equity applicant" means an applicant who has at least 17
51 percent ownership and control by one or more individuals who meet 18
at least two of the following qualifications: 19
(i) Lived in a disproportionately impacted area in Washington 20
state for a minimum of five years between 1980 and 2010;21
(ii) Has been arrested or convicted of a cannabis offense or has 22
a family member who has been arrested or convicted of a cannabis 23
offense; 24
(iii) Had a household income in the year prior to submitting an 25
application under this section that was less than the median 26
household income within the state of Washington as calculated by the 27
United States census bureau; or 28
(iv) Is both a socially and economically disadvantaged individual 29
as defined by the office of minority and women's business enterprises 30
under chapter 39.19 RCW. 31
(c) "Social equity goals" means: 32
(i) Increasing the number of cannabis retailer, producer, and 33
processor licenses held by social equity applicants from 34
disproportionately impacted areas; and 35
(ii) Reducing accumulated harm suffered by individuals, families, 36
and local areas subject to severe impacts from the historical 37
application and enforcement of cannabis prohibition laws.38
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(((7))) (8) Except for the process detailed in subsection (1) of 1
this section, the process for creating new cannabis retail licenses 2
under this chapter remains unaltered. 3
NEW SECTION. Sec. 3. This act is necessary for the immediate 4
preservation of the public peace, health, or safety, or support of 5
the state government and its existing public institutions, and takes 6
effect immediately.7
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