Marijuana Social Equity Program.
The Marijuana Social Equity Program (Program) was established in 2020 and is administered by the Liquor and Cannabis Board (LCB). Under the Program, marijuana retailer licenses that have been subject to forfeiture, revocation, or cancellation by the LCB may be issued or reissued to a social equity applicant who meets the requirements for the marijuana retailer license. In addition, marijuana retailer licenses that were not previously issued by the LCB, but could have been issued without exceeding the statewide limit established before January 1, 2020, may be issued under the Program. The Program expires July 1, 2028.
To be considered for a retail license, an applicant must submit a Social Equity Plan (Plan) with other application materials. The Plan includes information regarding the applicant's qualifications as a social equity applicant, how the applicant will advance social equity goals, and other specified business information. The LCB may add additional Plan components or requirements following consultation with marijuana social equity stakeholders, including the Washington State Commission on African American Affairs (Commission on African American Affairs).
In determining the issuance of a license among eligible applicants, the LCB may give priority to a social equity applicant based on the extent to which the application addresses the components of the Plan. The LCB may deny applications that do not meet the social equity goals or Plan requirements, or applicants that do not otherwise meet licensing requirements.
Program Terminology. Certain terms and definitions are specified that, in part, relate to determining eligibility and prioritizing applications under the Program.
A "social equity applicant" is an applicant with majority ownership and control by at least one individual who: (1) has resided in a disproportionately impacted area for at least five of the preceding 10 years; or (2) has been convicted of a misdemeanor marijuana offense or is a family member of such an individual.
A "disproportionately impacted area" is a census tract or comparable geographic area with a high rate of: (1) poverty and unemployment; (2) participation in income-based or state programs; and (3) arrest, conviction, or incarceration related to the sale, possession, use, cultivation, manufacture, or transport of cannabis.
The LCB may further define criteria for what is considered a "disproportionately impacted area" after consultation with the Commission on African American Affairs and other stakeholders.
The "social equity goals" under the Program include: (1) increasing the number of marijuana retailer licenses held by social equity applicants from disproportionately impacted areas; and (2) reducing accumulated harm suffered by individuals, families, and local communities subject to the severe impacts from marijuana prohibition enforcement.
Technical Assistance Competitive Grant Program.
The Marijuana Social Equity Technical Assistance Competitive Grant Program (Technical Assistance Grant Program) was established in 2020 under the Department of Commerce (Department). The Technical Assistance Grant Program requires the Department to award grants on a competitive basis to marijuana retail license applicants who are social equity applicants submitting a Plan under the Program.
The Department must award grants primarily based on the strength of the Plan submitted by applicants, but they may also consider additional criteria as deemed necessary or appropriate. Eligible technical assistance activities under the Technical Assistance Grant Program include:
The Technical Assistance Grant Program is funded with a $1.1 million annual appropriation from the Dedicated Marijuana Account.
Social Equity Task Force.
The Marijuana Social Equity Task Force (Task Force) was established in 2020. The purpose of the Task Force is to make recommendations to the LCB on, among other topics, establishing a program for the issuance and reissuance of existing marijuana retail licenses. The Task Force must also advise the Governor and the Legislature on policies that will facilitate the development of Program. The Task Force expires June 30, 2022.
The Task Force members are jointly appointed by the President of the Senate and the Speaker of the House of Representatives, which include:
The Task Force must submit a report, or multiple reports, on recommended policies that will facilitate the development of the Program in Washington. The recommendations from the Task Force must include:
The Task Force is encouraged to submit individual recommendations as soon as possible to facilitate the LCB's early work to implement the recommendations. The final recommendations must be submitted to the Governor, the LCB, and the Legislature by December 1, 2020.
The LCB may adopt rules to implement the recommendations of the Task Force. However, a Task Force recommendation to increase the number of retail outlets above the statewide limit must be approved by the Legislature.
Staff support for the Task Force must be provided by the Health Equity Council of the Governor's Interagency Council on Health Disparities, until the Office of Equity requests to take over Task Force staffing responsibility.
Competitive Grant Program Modifications.
The eligible applicants under the Cannabis Social Equity Technical Assistance Competitive Grant Program (Technical Assistance Grant Program) include all existing cannabis license holders who meet social equity applicant criteria. In addition, cannabis license applicants who meet social equity applicant criteria are eligible applicants under the Technical Assistance Grant Program. The recipients of grants under the Technical Assistance Grant Program must demonstrate that the project has been completed within 12 months of receiving a pilot program grant, unless a grant recipient requests, and the Department approves, additional time to complete the project.
The Department must create a pilot program by October 2, 2021, to provide technical assistance to current cannabis retailer licensees who meet the social equity applicant criteria. The Department must allocate a minimum of $150,000 for the pilot program to provide technical assistance for infrastructure projects, technology upgrades, incubator and mentorship programs, and supplies. The recipients of grants must demonstrate that the project has been completed within 12 months of receiving a grant, unless a grant recipient requests, and the Department approves, additional time to complete the project.
Program Modifications.
The Program expiration date is July 1, 2029.
Modifications to Program Terminology. A conviction of a drug offense of an applicant, or family member of an applicant, is a qualifying factor to be considered a social equity applicant, subject to other conditions.
An individual must have lived in a disproportionately impacted area for a period of time defined in rule by the LCB, after consultation with the Commission on African American Affairs and other commissions, agencies, and advocates as determined by the LCB, to be considered a social equity applicant.
An applicant who meets criteria defined in rule by the LCB is considered a social equity applicant. The rules defining additional criteria for being considered a social equity applicant must be done after consultation with the Commission on African American Affairs and other commissions, agencies, and advocates as determined by the LCB.
The entities the LCB must consult while further defining criteria for what is considered a "disproportionately impacted area" include commissions and advocates.
Social Equity Task Force Modifications.
The purpose of the Task Force also includes providing recommendations to the LCB on the issuance of existing cannabis processor and producer licenses.
The Task Force members include two processor and two producer licensee holders.
The Task Force must also provide recommendations on the following topics:
The due date of the final Task Force recommendations is January 10, 2022.
The substitute bill makes the following changes to the underlying bill:
(In support) The work of the Task Force was delayed due to the impacts from the pandemic, which made the original reporting deadline unattainable. After meeting, the Task Force identified the limitations of the Task Force's authorizing legislation. The Task Force concluded that to provide a true, comprehensive social equity plan, expanding the scope of the Task Force work will be necessary.
The bill will address issues like gentrification and drug offenses of Program applicants. The bill will also allow the Task Force to make additional recommendations for the LCB to enact without requiring further legislation. Practicing equity in the cannabis industry is important for inclusion in the state.
The bill is the culmination of the Commission on African American Affairs's work conducting more than 300 interviews across the state with people who were left out of Initiative Measure No. 502. The bill also reflects the discussions that came out of the LCB listening sessions and Task Force meetings. From this work, it is clear that diversity, equity, and inclusion is needed in the cannabis industry.
This bill represents some of the best social equity cannabis policy across the country. This bill not only takes into consideration the unfair, predatory war on drugs that was predicated on the African American community, but it also takes into consideration that there are insufficient existing resources in the African American community to be competitive.
This bill is a healing process for the black community.
(Opposed) None.
(Other) The WSDA is supportive of this effort. Regulatory transfers between the WSDA and the LCB were not previously included in the work of the Task Force. The WSDA would like to be included in the conversation about a potential transfer of regulatory power to the WSDA when the Task Force reaches this topic.
No new changes were recommended.
(In support) None.
(Opposed) None.