WACA 2025 LEGISLATIVE AND REGULATORY AGENDA
The Washington Cannabusiness Association (WACA) engages each year in a democratic process focusing WACA’s attention for the upcoming legislative session. This agenda is the outcome of that internal process among membership.
Pathways to Investment in Local Businesses
The legislature can safely enable cannabis licensees to have access to investment from outside of Washington while also protecting the stability of the market within state lines. Of the thirty-eight states with some form of a regulated cannabis system, only Washington and Alaska restrict investment to in-state residents. For the eighth year, WACA supports easing restrictions on capital investment so local businesses have the same opportunities for funding as every other industry, and in every other legal cannabis marketplace in the lower 48. Allowing cannabis businesses in Washington channels to obtain financial support represents empowering Washington entrepreneurs with meaningful economic opportunity.
Coupled with this critical change, Washington should ensure that the hundreds of currently dormant licenses cannot be reactivated, creating an untenable over supply problem. Until there is an easing of federal restrictions that allows interstate commerce, it is important to defer unused producer licenses so that local cannabis growers remain viable.
Freeze Dormant Producer Licenses
When Washingtons regulated industry began, the size of the market in the state was an unknown. Despite attempts to estimate the size of the market, too many production licenses were issued by the state. Because Washington cannabis businesses can only sell within the state of Washington the market is fixed, which has created an oversupply issue causing wholesale prices to drop drastically. There are currently hundreds of producer licenses that are not active and hundreds of square feet of unutilized production that create a lack of stability in our marketplace. To protect local businesses and the sector by ensuring that hundreds of long-dormant producer licenses cannot suddenly be snapped up and unleashed, dormant licenses should be frozen until there is action at the federal level that would allow for interstate commerce. Until there is an easing of federal restrictions that allows interstate commerce, it is important to defer unused producer licenses so that local cannabis growers remain viable.
Consistent Compliance, Local Control
Under state law (RCW 69.50.369 Sec (2)) regulated cannabis businesses are limited to a total of two signs (maximum 1600 sq. inches) that are permanently affixed to a building or other structure on the licensed premises. While well intended, inconsistent enforcement across the state creates an unnecessary challenge for the industry and the regulator alike. WACA supports legislation that would remove state regulatory oversight on the details of signage (such as number of and dimensions) and instead defer to local officials and laws when it comes to the norms of their communities. Regulatory oversight of advertising content would remain with the Liquor and Cannabis Board.
Allow Employee Stock Ownership Plans in Cannabis Businesses (ESOP)
In 2024, the Legislature unanimously approved legislation creating incentives for employee stock ownership plans for all businesses. Unfortunately, an artifact of state law currently excludes cannabis businesses from this new economic opportunity for workers. Just as in any other legal industry, cannabis business owners should have the option to create an ownership trust that benefits employees. Originally created as an option by Congress as part of the Employee Retirement Income Security Act of 1974 (ERISA), employees benefit from an ESOP by gaining a stake in their company, which can lead to increased job security, higher employee engagement, a sense of ownership, and potential retirement benefits tied to the company's success.
Continued Modernization of the Liquor and Cannabis Board
The entirety of the regulated market agrees that the illicit market is a threat to public safety, undermines efforts to protect minors, further destabilizes the legal marketplace and adds to the ongoing stigma on cannabis. WACA will pursue legislation directing the LCB to prioritize enforcement activities on inversion (cannabis entering our state illegally from other markets, legal and illicit) and diversion (cannabis illegally exiting our regulated marketplace to be sold illicitly) of illegal product while further reducing youth access to the legal market (in 2023, retail compliance was 95% compared to 80% for liquor). This legislation also seeks to build on legislation adopted in 2018, which directed the LCB to incorporate a compliance-first culture. This bill seeks to reform LCB practices to both better reflect the regulatory regimes for other legal, regulated industries in Washington such as those for alcohol and reduce redundant enforcement tactics that are either pursued inconsistently or are duplicative of powers already held by peer state agencies and local jurisdictions. 13 years since the adoption of Initiative 502 and 12 years since the first legal sales, our state has a wealth of experience to thoughtfully inform a modern, efficient regulatory regime of a legal cannabis marketplace that keeps products out of the hands of kids.
Reduce Duplicative Regulation of Cannabis Laboratories
WACA has been a leading advocate for robust testing standards to protect consumer safety and supports oversight for this critical public safety program to the Washington Department of Agriculture. In 2022, HB 1859 created an Interagency Coordination Team tasked with establishing laboratory standards for private cannabis laboratories that included WSDA, DOH, and WSLCB. In 2024, HB 2151 transitioned private cannabis lab accreditation to the WSDA. Despite the clear intention of HB 2151, the LCB has claimed to retain the authority to “certify” cannabis testing labs. WACA supports removing the LCB’s inexplicable replication of what is intended to be a streamlined process prioritizing consumer safety.
Cannabis Retail Safety
Over the last several years we have seen an alarming spike in armed robberies targeting cannabis businesses across our state and confirmed by multiple local law enforcement agencies. Many factors are contributing to the escalated safety risks. But there is little doubt that these businesses are at particular risk for opportunistic criminals because it is well known that transactions between customers and cannabis retailers are almost entirely in cash. Ongoing federal prohibition is the catalyst for the conditions that create the risk, but in Washington we can take meaningful steps to respect the safety and well-being of cannabis workers, customers and vendors. WACA will pursue legislation to increase the penalties for armed robbery of cannabis retail businesses to align with the penalty for robbing a pharmacy.
Update Transportation Licensee Regulations
An often overlooked, but critical link in Washington’s regulated cannabis system is transport of product. Current regulations mandate strict adherence to delivery routes and deadlines in addition to specific restrictions for handling and storing any cannabis product. For example, it is required that any vehicle used for transportation of cannabis products be delivered or returned to the shipper within 48 hours from the time of pick-up. Additionally, products must be in the transportation vehicle at all times as the vehicle is considered to be part of the licensed premise and temporary storage of product is not allowed at any facility before reaching the final destination. This creates undue strain on drivers, potentially endangering them due to long working hours and adverse weather conditions, all because current rules prohibit them from choosing a safer, more efficient route. WACA will work with the LCB to make common sense updates to transportation regulations - such as “cross-docking” at a distribution fulfillment hub - in order to better prioritize safety on the roads.
Best Practices Check-Up: Regulatory System Updates
WACA will collaborate with elected officials and the WSLCB to ensure the regulatory framework reflects the maturity of the industry and streamlines regulatory oversight and business processes including but not limited to:
Update |
System Flaw |
Recommended Update |
Waste Disposal Requirements |
Waste disposal requirements are overly restrictive for a product that has little THC including a quarantine period that is required before the waste can be disposed of. |
Relax waste disposal requirements for producers/processors based on evaluation of whether the current quarantine requirement for waste is necessary to prevent diversion. |
Sign-In Records |
Currently cannabis licensees are required to have every visitor sign in with their full name and reason for visit and they must keep those records on premise for several years. |
Relax this requirement by either removing it completely or reducing the amount of time that the records need to be saved. |
Returned Product |
Currently regulations require all product that is returned by the retailer to the producer or processor to be destroyed. |
Update this rule to allow returned products to be reused or made into new products if the product has not been opened or altered. |
COAs (Certificates of Analysis) |
Current regulations require COAs to be physically kept and maintained by the retailer for all products sold. |
Simplify and reduce amount of paper by updating the rules to allow for COAs to be maintained on processor’s website for a certain length of time and QR code for retailer to distribute when asked |
Product on Hand |
Current rules limit licensees to no more than six months of product even though some products are shelf stable for over a year. |
Update rules to remove this arbitrary limitation. |
Questions? Contact Vicki Christophersen (vicki@christopherseninc.com, 360.485.2026) or Brooke Davies (brooke@bedaviesconsulting.com, 540.336.7465).