Cannabis oversupply

AN ACT Relating to preventing an oversupply of cannabis; amending 1
RCW 69.50.325 and 69.50.331; and adding a new section to chapter 2
69.50 RCW. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. A new section is added to chapter 69.50 5
RCW to read as follows: 6
(1) For purposes of this section the following definitions apply 7
unless the context clearly requires otherwise: 8
(a) "Tier three producer" means a cannabis producer licensed by 9
the board to produce cannabis on 10,000 square feet up to 30,000 10
square feet of space. 11
(b) "Tier two producer" means a cannabis producer licensed by the 12
board to produce cannabis on 4,000 square feet up to 10,000 square 13
feet of space. 14
(c) "Tier one producer" means a cannabis producer licensed by the 15
board to produce cannabis on less than 4,000 square feet of space.16
(2) Tier three producers and tier two producers are subject to 17
the revenue threshold requirements and tier conversions in this 18
section. 19
(a) At the time of license renewal, a tier three producer must 20
demonstrate minimum gross sales reported to the department of revenue 21
H-2655.1
HOUSE BILL 2315
State of Washington 69th Legislature 2026 Regular Session
By Representatives Reeves, Morgan, and Thomas
Prefiled 01/07/26. Read first time 01/12/26. Referred to Committee
on Consumer Protection & Business.
p. 1 HB 2315
of $24,000 per month or $288,000 annually throughout the two-year 1
period prior to renewal. If a tier three producer fails to meet this 2
revenue threshold throughout the two-year period prior to renewal, 3
then the tier three producer is converted to a tier two producer and 4
the producer's maximum amount of space for cannabis production is 5
limited to 10,000 square feet. 6
(b) At the time of license renewal, a tier two producer must 7
demonstrate minimum gross sales reported to the department of revenue 8
of $8,000 per month or $96,000 annually throughout the two-year 9
period prior to renewal. If a tier two producer fails to meet this 10
revenue threshold throughout the two-year period prior to renewal, 11
then the tier two producer is converted to a tier one producer and 12
the producer's maximum amount of space for cannabis production is 13
limited to 4,000 square feet. 14
(c) Tier one producers are not subject to this section.15
(3) For purposes of determining the two-year period in subsection 16
(2) of this section, the time prior to the effective date of this 17
section must be included if the time is within two years of a license 18
renewal occurring on or after the effective date of this section.19
(4) A tier three producer or a tier two producer may request, and 20
the board in its discretion may grant, a one-year exemption from the 21
application of this section if extenuating circumstances exist and 22
the request is submitted to the board within 30 days of license 23
renewal. Extenuating circumstances include but are not limited to 24
natural disasters or other extraordinary events beyond the tier three 25
producer or tier two producer's control. 26
Sec. 2. RCW 69.50.325 and 2025 c 250 s 1 are each amended to 27
read as follows: 28
(1) There shall be a cannabis producer's license regulated by the 29
board and subject to annual renewal and section 1 of this act . The 30
licensee is authorized to produce: (a) Cannabis for sale at wholesale 31
to cannabis processors and other cannabis producers; (b) immature 32
plants or clones and seeds for sale to cooperatives as described 33
under RCW 69.51A.250; and (c) immature plants or clones and seeds for 34
sale to qualifying patients and designated providers as provided 35
under RCW 69.51A.310. The production, possession, delivery, 36
distribution, and sale of cannabis in accordance with the provisions 37
of this chapter and the rules adopted to implement and enforce it, by 38
a validly licensed cannabis producer, shall not be a criminal or 39
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civil offense under Washington state law. Every cannabis producer's 1
license shall be issued in the name of the applicant, shall specify 2
the location at which the cannabis producer intends to operate, which 3
must be within the state of Washington, and the holder thereof shall 4
not allow any other person to use the license. The application fee 5
for a cannabis producer's license shall be ((two hundred fifty 6
dollars)) $250. The annual fee for issuance and renewal of a cannabis 7
producer's license shall be ((one thousand three hundred eighty-one 8
dollars)) $1,381. A separate license shall be required for each 9
location at which a cannabis producer intends to produce cannabis.10
(2) There shall be a cannabis processor's license to process, 11
package, and label cannabis concentrates, useable cannabis, and 12
cannabis-infused products for sale at wholesale to cannabis 13
processors and cannabis retailers, regulated by the board and subject 14
to annual renewal. The processing, packaging, possession, delivery, 15
distribution, and sale of cannabis, useable cannabis, cannabis-16
infused products, and cannabis concentrates in accordance with the 17
provisions of this chapter and chapter 69.51A RCW and the rules 18
adopted to implement and enforce these chapters, by a validly 19
licensed cannabis processor, shall not be a criminal or civil offense 20
under Washington state law. Every cannabis processor's license shall 21
be issued in the name of the applicant, shall specify the location at 22
which the licensee intends to operate, which must be within the state 23
of Washington, and the holder thereof shall not allow any other 24
person to use the license. The application fee for a cannabis 25
processor's license shall be ((two hundred fifty dollars )) $250. The 26
annual fee for issuance and renewal of a cannabis processor's license 27
shall be ((one thousand three hundred eighty-one dollars )) $1,381. A 28
separate license shall be required for each location at which a 29
cannabis processor intends to process cannabis. 30
(3)(a) There shall be a cannabis retailer's license to sell 31
cannabis concentrates, useable cannabis, and cannabis-infused 32
products at retail in retail outlets, regulated by the board and 33
subject to annual renewal. The possession, delivery, distribution, 34
and sale of cannabis concentrates, useable cannabis, and cannabis-35
infused products in accordance with the provisions of this chapter 36
and the rules adopted to implement and enforce it, by a validly 37
licensed cannabis retailer, shall not be a criminal or civil offense 38
under Washington state law. Every cannabis retailer's license shall 39
be issued in the name of the applicant, shall specify the location of 40
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the retail outlet the licensee intends to operate, which must be 1
within the state of Washington, and the holder thereof shall not 2
allow any other person to use the license. The application fee for a 3
cannabis retailer's license shall be ((two hundred fifty dollars )) 4
$250. The annual fee for issuance and renewal of a cannabis 5
retailer's license shall be ((one thousand three hundred eighty-one 6
dollars)) $1,381. A separate license shall be required for each 7
location at which a cannabis retailer intends to sell cannabis 8
concentrates, useable cannabis, and cannabis-infused products.9
(b)(i) An individual retail licensee and all other persons or 10
entities with a financial or other ownership interest in the business 11
operating under the license are limited, in the aggregate, to holding 12
a collective total of not more than five retail cannabis licenses.13
(ii) A retail licensee and all other persons or entities with a 14
financial or other ownership interest may not enter into any 15
management agreement under RCW 69.50.331(1)(b)(iv) or any agreement 16
as referenced in RCW 69.50.395, whether or not in exchange for 17
payment, that confers a financial interest across more than five 18
retail cannabis licenses. For the purposes of this subsection, 19
"financial interest" includes, but is not limited to:20
(A) Any sharing of profits or revenue; 21
(B) Any assistance, coordination, or recommendation for the 22
purchase of cannabis products whereupon pricing is coordinated or 23
discounted; 24
(C) The common use of intellectual property assets such as 25
branding, trade names, logos, social media accounts, or websites;26
(D) Any operational control over the business or operational 27
support for typical day-to-day business operations, including core 28
business or executive functions of the retail cannabis license;29
(E) Any sharing or coordination of marketing and advertising 30
efforts or expenses; and 31
(F) Any coordinated sharing of employment or hiring decisions, 32
including the shared employment of individuals. 33
(c)(i) A cannabis retailer's license is subject to forfeiture in 34
accordance with rules adopted by the board pursuant to this section.35
(ii) The board shall adopt rules to establish a license 36
forfeiture process for a licensed cannabis retailer that is not fully 37
operational and open to the public within a specified period from the 38
date of license issuance, as established by the board, subject to the 39
following restrictions: 40
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(A) No cannabis retailer's license may be subject to forfeiture 1
within the first nine months of license issuance; and2
(B) The board must require license forfeiture on or before 3
((twenty-four)) 24 calendar months of license issuance if a cannabis 4
retailer is not fully operational and open to the public, unless the 5
board determines that circumstances out of the licensee's control are 6
preventing the licensee from becoming fully operational and that, in 7
the board's discretion, the circumstances warrant extending the 8
forfeiture period beyond ((twenty-four)) 24 calendar months.9
(iii) The board has discretion in adopting rules under this 10
subsection (3)(c). 11
(iv) This subsection (3)(c) applies to cannabis retailer's 12
licenses issued before and after July 23, 2017. However, no license 13
of a cannabis retailer that otherwise meets the conditions for 14
license forfeiture established pursuant to this subsection (3)(c) may 15
be subject to forfeiture within the first nine calendar months of 16
July 23, 2017. 17
(v) The board may not require license forfeiture if the licensee 18
has been incapable of opening a fully operational retail cannabis 19
business due to actions by the city, town, or county with 20
jurisdiction over the licensee that include any of the following:21
(A) The adoption of a ban or moratorium that prohibits the 22
opening of a retail cannabis business; or 23
(B) The adoption of an ordinance or regulation related to zoning, 24
business licensing, land use, or other regulatory measure that has 25
the effect of preventing a licensee from receiving an occupancy 26
permit from the jurisdiction or which otherwise prevents a licensed 27
cannabis retailer from becoming operational. 28
(d) The board may issue cannabis retailer licenses pursuant to 29
this chapter and RCW 69.50.335. 30
Sec. 3. RCW 69.50.331 and 2023 c 220 s 2 are each amended to 31
read as follows: 32
(1) For the purpose of considering any application for a license 33
to produce, process, research, transport, or deliver cannabis, 34
useable cannabis, cannabis concentrates, or cannabis-infused products 35
subject to the regulations established under RCW 69.50.385, or sell 36
cannabis, or for the renewal of a license to produce, process, 37
research, transport, or deliver cannabis, useable cannabis, cannabis 38
concentrates, or cannabis-infused products subject to the regulations 39
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established under RCW 69.50.385, or sell cannabis, the board must 1
conduct a comprehensive, fair, and impartial evaluation of the 2
applications timely received. 3
(a) The board may cause an inspection of the premises to be made, 4
and may inquire into all matters in connection with the construction 5
and operation of the premises. For the purpose of reviewing any 6
application for a license and for considering the denial, suspension, 7
revocation, cancellation, or renewal or denial thereof, of any 8
license, the board may consider any prior criminal arrests or 9
convictions of the applicant, any public safety administrative 10
violation history record with the board, and a criminal history 11
record information check. The board may submit the criminal history 12
record information check to the Washington state patrol and to the 13
identification division of the federal bureau of investigation in 14
order that these agencies may search their records for prior arrests 15
and convictions of the individual or individuals who filled out the 16
forms. The board must require fingerprinting of any applicant whose 17
criminal history record information check is submitted to the federal 18
bureau of investigation. The provisions of RCW 9.95.240 and of 19
chapter 9.96A RCW do not apply to these cases. Subject to the 20
provisions of this section, the board may, in its discretion, grant 21
or deny the renewal or license applied for. Denial may be based on, 22
without limitation, the existence of chronic illegal activity 23
documented in objections submitted pursuant to subsections (7)(c) and 24
(10) of this section. Authority to approve an uncontested or 25
unopposed license may be granted by the board to any staff member the 26
board designates in writing. Conditions for granting this authority 27
must be adopted by rule. 28
(b) No license of any kind may be issued to: 29
(i) A person under the age of 21 years; 30
(ii) A person doing business as a sole proprietor who has not 31
lawfully resided in the state for at least six months prior to 32
applying to receive a license; 33
(iii) A partnership, employee cooperative, association, nonprofit 34
corporation, or corporation unless formed under the laws of this 35
state, and unless all of the members thereof are qualified to obtain 36
a license as provided in this section; or 37
(iv) A person whose place of business is conducted by a manager 38
or agent, unless the manager or agent possesses the same 39
qualifications required of the licensee. 40
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(c) The renewal of a cannabis producer license is subject to 1
section 1 of this act.2
(2)(a) The board may, in its discretion, subject to RCW 3
43.05.160, 69.50.563, 69.50.562, 69.50.334, and 69.50.342(3) suspend 4
or cancel any license; and all protections of the licensee from 5
criminal or civil sanctions under state law for producing, 6
processing, researching, or selling cannabis, cannabis concentrates, 7
useable cannabis, or cannabis-infused products thereunder must be 8
suspended or terminated, as the case may be. 9
(b) The board must immediately suspend the license of a person 10
who has been certified pursuant to RCW 74.20A.320 by the department 11
of social and health services as a person who is not in compliance 12
with a support order. If the person has continued to meet all other 13
requirements for reinstatement during the suspension, reissuance of 14
the license is automatic upon the board's receipt of a release issued 15
by the department of social and health services stating that the 16
licensee is in compliance with the order. 17
(c) The board may request the appointment of administrative law 18
judges under chapter 34.12 RCW who shall have power to administer 19
oaths, issue subpoenas for the attendance of witnesses and the 20
production of papers, books, accounts, documents, and testimony, 21
examine witnesses, receive testimony in any inquiry, investigation, 22
hearing, or proceeding in any part of the state, and consider 23
mitigating and aggravating circumstances in any case and deviate from 24
any prescribed penalty, under rules the board may adopt.25
(d) Witnesses must be allowed fees and mileage each way to and 26
from any inquiry, investigation, hearing, or proceeding at the rate 27
authorized by RCW 34.05.446. Fees need not be paid in advance of 28
appearance of witnesses to testify or to produce books, records, or 29
other legal evidence. 30
(e) In case of disobedience of any person to comply with the 31
order of the board or a subpoena issued by the board, or any of its 32
members, or administrative law judges, or on the refusal of a witness 33
to testify to any matter regarding which he or she may be lawfully 34
interrogated, the judge of the superior court of the county in which 35
the person resides, on application of any member of the board or 36
administrative law judge, compels obedience by contempt proceedings, 37
as in the case of disobedience of the requirements of a subpoena 38
issued from said court or a refusal to testify therein.39
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(3) Upon receipt of notice of the suspension or cancellation of a 1
license, the licensee must forthwith deliver up the license to the 2
board. Where the license has been suspended only, the board must 3
return the license to the licensee at the expiration or termination 4
of the period of suspension. The board must notify all other 5
licensees in the county where the subject licensee has its premises 6
of the suspension or cancellation of the license; and no other 7
licensee or employee of another licensee may allow or cause any 8
cannabis, cannabis concentrates, useable cannabis, or cannabis-9
infused products to be delivered to or for any person at the premises 10
of the subject licensee. 11
(4) Every license issued under this chapter is subject to all 12
conditions and restrictions imposed by this chapter or by rules 13
adopted by the board to implement and enforce this chapter. All 14
conditions and restrictions imposed by the board in the issuance of 15
an individual license must be listed on the face of the individual 16
license along with the trade name, address, and expiration date.17
(5) Every licensee must post and keep posted its license, or 18
licenses, in a conspicuous place on the premises. 19
(6) No licensee may employ any person under the age of 21 years.20
(7)(a) Before the board issues a new or renewed license to an 21
applicant it must give notice of the application to the chief 22
executive officer of the incorporated city or town, if the 23
application is for a license within an incorporated city or town, or 24
to the county legislative authority, if the application is for a 25
license outside the boundaries of incorporated cities or towns, or to 26
the tribal government if the application is for a license within 27
Indian country, or to the port authority if the application for a 28
license is located on property owned by a port authority.29
(b) The incorporated city or town through the official or 30
employee selected by it, the county legislative authority or the 31
official or employee selected by it, the tribal government, or port 32
authority has the right to file with the board within ((twenty)) 20 33
days after the date of transmittal of the notice for applications, or 34
at least ((thirty)) 30 days prior to the expiration date for 35
renewals, written objections against the applicant or against the 36
premises for which the new or renewed license is asked. The board may 37
extend the time period for submitting written objections upon request 38
from the authority notified by the board. 39
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(c) The written objections must include a statement of all facts 1
upon which the objections are based, and in case written objections 2
are filed, the city or town or county legislative authority may 3
request, and the board may in its discretion hold, a hearing subject 4
to the applicable provisions of Title 34 RCW. If the board makes an 5
initial decision to deny a license or renewal based on the written 6
objections of an incorporated city or town or county legislative 7
authority, the applicant may request a hearing subject to the 8
applicable provisions of Title 34 RCW. If a hearing is held at the 9
request of the applicant, board representatives must present and 10
defend the board's initial decision to deny a license or renewal.11
(d) Upon the granting of a license under this title the board 12
must send written notification to the chief executive officer of the 13
incorporated city or town in which the license is granted, or to the 14
county legislative authority if the license is granted outside the 15
boundaries of incorporated cities or towns. 16
(8)(a) Except as provided in (b) through (e) of this subsection, 17
the board may not issue a license for any premises within 1,000 feet 18
of the perimeter of the grounds of any elementary or secondary 19
school, playground, recreation center or facility, child care center, 20
public park, public transit center, or library, or any game arcade 21
admission to which is not restricted to persons aged 21 years or 22
older. 23
(b) A city, county, or town may permit the licensing of premises 24
within 1,000 feet but not less than 100 feet of the facilities 25
described in (a) of this subsection, except elementary schools, 26
secondary schools, and playgrounds, by enacting an ordinance 27
authorizing such distance reduction, provided that such distance 28
reduction will not negatively impact the jurisdiction's civil 29
regulatory enforcement, criminal law enforcement interests, public 30
safety, or public health. 31
(c) A city, county, or town may permit the licensing of research 32
premises allowed under RCW 69.50.372 within 1,000 feet but not less 33
than 100 feet of the facilities described in (a) of this subsection 34
by enacting an ordinance authorizing such distance reduction, 35
provided that the ordinance will not negatively impact the 36
jurisdiction's civil regulatory enforcement, criminal law 37
enforcement, public safety, or public health. 38
(d) The board may license premises located in compliance with the 39
distance requirements set in an ordinance adopted under (b) or (c) of 40
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this subsection. Before issuing or renewing a research license for 1
premises within 1,000 feet but not less than 100 feet of an 2
elementary school, secondary school, or playground in compliance with 3
an ordinance passed pursuant to (c) of this subsection, the board 4
must ensure that the facility: 5
(i) Meets a security standard exceeding that which applies to 6
cannabis producer, processor, or retailer licensees;7
(ii) Is inaccessible to the public and no part of the operation 8
of the facility is in view of the general public; and9
(iii) Bears no advertising or signage indicating that it is a 10
cannabis research facility. 11
(e) The board must issue a certificate of compliance if the 12
premises met the requirements under (a), (b), (c), or (d) of this 13
subsection on the date of the application. The certificate allows the 14
licensee to operate the business at the proposed location 15
notwithstanding a later occurring, otherwise disqualifying factor.16
(f) The board may not issue a license for any premises within 17
Indian country, as defined in 18 U.S.C. Sec. 1151, including any fee 18
patent lands within the exterior boundaries of a reservation, without 19
the consent of the federally recognized tribe associated with the 20
reservation or Indian country. 21
(9) A city, town, or county may adopt an ordinance prohibiting a 22
cannabis producer or cannabis processor from operating or locating a 23
business within areas zoned primarily for residential use or rural 24
use with a minimum lot size of five acres or smaller.25
(10) In determining whether to grant or deny a license or renewal 26
of any license, the board must give substantial weight to objections 27
from an incorporated city or town or county legislative authority 28
based upon chronic illegal activity associated with the applicant's 29
operations of the premises proposed to be licensed or the applicant's 30
operation of any other licensed premises, or the conduct of the 31
applicant's patrons inside or outside the licensed premises. "Chronic 32
illegal activity" means (a) a pervasive pattern of activity that 33
threatens the public health, safety, and welfare of the city, town, 34
or county including, but not limited to, open container violations, 35
assaults, disturbances, disorderly conduct, or other criminal law 36
violations, or as documented in crime statistics, police reports, 37
emergency medical response data, calls for service, field data, or 38
similar records of a law enforcement agency for the city, town, 39
county, or any other municipal corporation or any state agency; or 40
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(b) an unreasonably high number of citations for violations of RCW 1
46.61.502 associated with the applicant's or licensee's operation of 2
any licensed premises as indicated by the reported statements given 3
to law enforcement upon arrest. 4
(11) The board may not issue a cannabis retail license for any 5
premises not currently licensed if: 6
(a) The board receives a written objection from the legislative 7
authority of an incorporated city or town, or county legislative 8
authority, relating to the physical location of the proposed 9
premises; 10
(b) The objection to the location from the incorporated city or 11
town, or county legislative authority, is received by the board 12
within 20 days of the board notifying the incorporated city or town, 13
or county legislative authority, of the proposed cannabis retail 14
location; and 15
(c) The objection to the issuance of a cannabis retail license at 16
the specified location is based on a preexisting local ordinance 17
limiting outlet density in a specific geographic area. For purposes 18
of this subsection (11), a preexisting local ordinance is an 19
ordinance enacted and in effect before the date the applicant submits 20
an application for a cannabis retail license to the board identifying 21
the premises proposed to be licensed. No objection related to the 22
physical location of a proposed premises may be made by a local 23
government under this subsection (11) based on a local ordinance 24
enacted after the date the applicant submits an application for a 25
cannabis retail license to the board identifying the premises 26
proposed to be licensed. 27
(12) After January 1, 2024, all cannabis licensees are encouraged 28
but are not required to submit a social equity plan to the board. 29
Upon confirmation by the board that a cannabis licensee who is not a 30
social equity applicant, and who does not hold a social equity 31
license issued under RCW 69.50.335, has submitted a social equity 32
plan, the board must within 30 days reimburse such a licensee an 33
amount equal to the cost of the licensee's annual cannabis license 34
renewal fee. The license renewal fee reimbursement authorized under 35
this subsection is subject to the following limitations:36
(a) The board may provide reimbursement one time only to any 37
licensed entity; and 38
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(b) Any licensed entity holding more than one cannabis license is 1
eligible for reimbursement of the license renewal fee on only one 2
license. 3
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