There are 21 agricultural commodity commissions related to specific commodities in Washington. Commissions are funded by assessments on producers of the commodities within Washington. Several of the commodity commissions are established in law, including the Washington Apple Commission, the Washington Dairy Products Commission, the Washington Wine Commission, the Washington Beer Commission, the Washington Grain Commission, and others. The Washington State Department of Agriculture (WSDA) established additional agricultural commodity commissions through a process in the Washington Agricultural Enabling Act. The Director of the WSDA, or the Director's authorized representative, is a member of each commodity commission.
Establishment of the Washington State Cannabis Cultivation Commission.
The Washington State Cannabis Cultivation Commission (Commission) is established, consisting of 13 voting members including the Director of the Washington State Department of Agriculture (Director) and representatives of licensed cannabis producers and producers/processors located throughout the state.
Purposes.
The Commission's purposes are the following:
Powers and Duties.
The Commission's powers and duties are the following:
Commission Membership.
Of the 13 voting members of the Commission, eight must be cannabis producers or producers/processors located in four districts throughout the state, and four members must be elected statewide representing producers or producers/processors of different sizes. Initial commission members are appointed by the Director for initial staggered terms of one, two, or three years. Thereafter, members of the Commission other than the Director are elected by a vote of qualified producers or producers/processors in each district for three-year terms. When making initial appointments and replacement appointments, the Director must give priority to persons who represent communities of color in order to maintain a balanced and diverse distribution of members based on disproportionately impacted communities, ethnicity, geographic location, gender identity, sexual orientation, and age, where practicable. Members must be reimbursed for expenses incurred in the performance of their duties in accordance with state law.
Advisory Council.
A nonvoting advisory council is created to assist the Commission. The Director must appoint one standalone processor member and one testing laboratory member to the advisory council. Advisory council members must be considered from a pool of self-nominated active business representatives from each business type. Each Commission member and advisory council member, other than the Director, must be at least 21 years of age, a citizen and resident of Washington, must directly hold or be a named owner in whole or in majority part of an entity holding the relevant license, and must be engaged in and derive a substantial portion of their income from the production of cannabis within Washington for a period of three years.
Approval of Budget, Plans, and Rules.
The Commission must prepare and submit its budget for each fiscal year to the Director of the WSDA for approval. Additionally, the Commission must develop and also submit for approval any plans concerning, but not limited to, the establishment and administration of Commission governance issues and the initiation or establishment of rulemaking. The Director must review the Commission's education programs to ensure they comply with state and federal laws. The WSDA serves as the Commission's rules coordinator and the Commission's rules are subject to the Director's approval.
Reimbursement of All Agency Costs by the Commission.
The Commission must fully reimburse the WSDA for all costs incurred by the WSDA, including staff support and the adoption of rules and other actions necessary to carry out the legislation. The Commission must also reimburse all costs incurred by the Liquor and Cannabis Board for activities related to the Commission.
Assessments on Producers and Producers/Processors.
The Commission is funded by agricultural commodity assessments that the LCB must levy on cannabis producers and producers/processors. Beginning on October 31, 2022, the assessment on each producer licensee is 0.29 percent of all sales revenues. Beginning on October 31, 2022, the assessment on each producer/processor licensee is 0.145 percent of all sales revenues. An exemption from the assessments applies through October of 2027 for producers and producers/processors who are licensed through the cannabis social equity program. The Commission must deposit money collected in a separate account in the Commission's name in any bank that is a state depositary. All expenditures and disbursements made from this account may be made without the necessity of a specific legislative appropriation.
Information Sharing.
Financial and commercial information and records submitted to either the LCB or the Commission to administer the law establishing the Commission may be shared between the LCB and the Commission. They may also be used, if required, in any suit or administrative hearing involving the law establishing the Commission.
Liability.
It is specified that obligations incurred by and claims against the Commission must be enforced against the assets of the Commission and, except to the extent of such assets, no liability for the debts or actions of the Commission exists against the state or against any member, employee, or agent of the Commission or the state in the person's individual capacity. Additionally, individual members and employees of the Commission may not be held responsible for errors, mistakes, or other acts or omissions, except for their individual acts of dishonesty or crimes.
Civil Service Law Exception.
Officers and employees of the Commission are included in the exceptions to the State Civil Service Law.
The substitute bill makes the following changes compared to the original bill:
(In support) The creation of an agricultural commodity commission for cannabis will benefit the state, provide for education, outreach, and sharing of knowledge with producers, and enable scientific research related to cannabis. Agricultural commodity commissions exist for many commodities in Washington and have proven to be beneficial for the producers who fund the commissions as well as for the state as a whole. The bill has been refined over several years. Although many aspects of the proposed Washington State Cannabis Cultivation Commission (Commission) are modeled on existing laws for other agricultural commodity commissions, marketing activities are not included. The bill includes a relatively low assessment amount on producers and producers/processors. Compared to other commodities, the cannabis plant is especially in need of a commodity commission. There is critical information growers need that the Commission could provide. In general, cannabis producers are less experienced at farming. The Commission could improve the regulation of pesticide use in cannabis production, help producers with pest control, and lead to developments in laboratory testing. This bill puts Washington in a good position if cannabis is legalized federally. Legal barriers still exist that prevent or limit traditional research institutions from conducting needed cannabis research, and the scope of needed research is beyond what any single cannabis business can fund. Creating the Commission would help lead to research addressing the most pressing issues that will benefit all producers and the state.
(Opposed) There are fundamental reasons why this bill has not advanced in the past and it should not be a priority until cannabis is legalized federally. The assessment on producers would be a fee ultimately passed on to consumers, who already pay the highest cannabis excise tax in the country at 37 percent. Increased costs for consumers will undermine efforts to curtail the illicit market. The value provided to individual cannabis producers is not worth the thousands of dollars in annual assessments that they must pay to fund the Commission under the bill. These cannabis businesses would rather use that money for purposes such as increasing employee pay or benefits.
(Other) There are areas of the bill that agencies are supportive of, and agencies have worked with proponents to address concerns raised in previous years. There is agreement on the strong need for more cannabis research. Making the Commission research-focused and industry-funded is a good approach. There are several concerns in the original bill that could be addressed through amendments, such as changing the provision addressing the Commission speaking on behalf of Washington. Not including any marketing activities by the Commission is appreciated. If the bill is amended so the Commission also reimburses the Liquor and Cannabis Board (LCB) for its work, then the bill could result in no cost to the LCB. There is less diversity in ownership of cannabis producers relative to cannabis retailers, which could be a topic for the Social Equity and Cannabis Task Force. Cannabis retailers should be included in the Commission's membership.