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