wa-law.org > bill > 2025-26 > HB 1884 > Original Bill
The regulated cannabis industry in Washington state has, year over year, demonstrated the highest rates of preventing youth access among all the regulated sectors. In addition, the regulated businesses have demonstrated a commitment to the highest standards of safety and contribution to the state by submitting to high testing standards and regulatory oversight. Further, the regulated industry faces extreme challenges in competing with the unregulated illicit market because of the high taxes, inconsistent enforcement and complicated regulatory burdens placed on the regulated market. The legislature intends to partner with those who choose to be regulated and taxed to prevent illegal, unsafe activities that threaten the promise of a new approach to cannabis. Washington has established precedent in creating regulatory certainty, consistency in and prioritization of enforcement activities within the department of labor and industries. The legislature has also previously adopted legislation describing its direction to the agency regarding upholding compliance while prioritizing issues that concern youth access and public safety. Therefore, it is the intent of the legislature that the liquor and cannabis board establish policies and procedures to create more regulatory certainty and set priorities for enforcement activities to focus such activities on the violations that most impact public health and safety and the sustainability of the regulated market. Further, it is the intent of the legislature that the two highest priorities for enforcement shall be youth prevention and prevention of inversion and diversion of cannabis. Finally, it is the intent of the legislature that the board place less priority and effort in pursuing enforcement actions on businesses that do not have a direct impact on these priorities.
The board must prescribe procedures for the following:
The establishment, within existing resources, and through a collaborative public process including outreach to the regulated cannabis industry, of a hierarchy of enforcement priorities to guide the board's enforcement of this chapter and the board's rules implementing this chapter. The highest enforcement priority in the hierarchy must be placed on youth prevention and prevention of inversion and diversion of cannabis and cannabis products into and out of Washington's cannabis market. The hierarchy must place less emphasis on enforcement of administrative violations that are not the highest enforcement priority;
Issuance of written warnings or notices to correct in lieu of penalties, sanctions, or other violations with respect to regulatory violations that have no direct or immediate relationship to public safety as defined by the board;
Waiving any fines, civil penalties, or administrative sanctions for violations, that have no direct or immediate relationship to public safety, and are corrected by the licensee within a reasonable amount of time as designated by the board;
A compliance program in accordance with chapter 43.05 RCW and RCW 69.50.342, whereby licensees may request compliance assistance and inspections without issuance of a penalty, sanction, or other violation provided that any noncompliant issues are resolved within a specified period of time; and
The convening of a meeting of impacted parties, within existing resources, and no later than 20 business days before the effective date of any significant legislative rule, as defined in RCW 34.05.328, in order to: (i) Identify ambiguities and remaining areas of concern in the rule; (ii) coordinate education and public relations efforts by all parties; (iii) provide comments regarding internal board training and enforcement plans; and (iv) provide comments regarding appropriate evaluation mechanisms to determine the effectiveness of the new rule. The meeting must include a balanced representation of licensees impacted, board personnel, and other agencies or key stakeholder groups as determined by the board. An existing advisory committee may be used if appropriate.
Subject to subsection (1)(a) of this section, the board must adopt rules prescribing penalties for violations of this chapter. The board:
May establish escalating penalties for violation of this chapter, provided that the cumulative effect of any such escalating penalties cannot last beyond two years and the escalation applies only to multiple violations that are the same or similar in nature;
May not include cancellation of a license for a single violation, unless the board can prove by a preponderance of the evidence:
Diversion of cannabis product to the illicit market or sales across state lines;
Furnishing of cannabis product to minors;
Diversion of revenue to criminal enterprises, gangs, cartels, or parties not qualified to hold a cannabis license based on criminal history requirements;
The commission of noncannabis-related crimes; or
Knowingly making a misrepresentation of fact to the board, an officer of the board, or an employee of the board related to conduct or an action that is, or alleged to be, any of the violations identified in (b)(i) through (iv) of this subsection (2);
May include cancellation of a license for cumulative violations only if a cannabis licensee commits at least four violations within a two-year period of time;
Must consider aggravating and mitigating circumstances and deviate from the prescribed penalties accordingly, and must authorize enforcement officers to do the same, provided that such penalty may not exceed the maximum escalating penalty prescribed by the board for that violation; and
Must give substantial consideration to mitigating any penalty imposed on a licensee when there is employee misconduct that led to the violation and the licensee:
Established a compliance program designed to prevent the violation;
Performed meaningful training with employees designed to prevent the violation; and
Had not enabled or ignored the violation or other similar violations in the past.
The board may not consider any violation that occurred more than two years prior as grounds for denial, suspension, revocation, cancellation, or nonrenewal, unless the board can prove by a preponderance of the evidence that the prior administrative violation evidences:
Diversion of cannabis product to the illicit market or sales across state lines;
Furnishing of cannabis product to minors;
Diversion of revenue to criminal enterprises, gangs, cartels, or parties not qualified to hold a cannabis license based on criminal history requirements;
The commission of noncannabis-related crimes; or
Knowingly making a misrepresentation of fact to the board, an officer of the board, or an employee of the board related to conduct or an action that is, or is alleged to be, any of the violations identified in (a) through (d) of this subsection (3).
The board, subject to the provisions of this chapter, must adopt rules that establish the procedures and criteria necessary to implement the following:
Licensing of cannabis producers, cannabis processors, and cannabis retailers, including prescribing forms and establishing application, reinstatement, and renewal fees.
Application forms for cannabis producers must request the applicant to state whether the applicant intends to produce cannabis for sale by cannabis retailers holding medical cannabis endorsements and the amount of or percentage of canopy the applicant intends to commit to growing plants determined by the department under RCW 69.50.375 to be of a THC concentration, CBD concentration, or THC to CBD ratio appropriate for cannabis concentrates, useable cannabis, or cannabis-infused products sold to qualifying patients.
The board must reconsider and increase limits on the amount of square feet permitted to be in production on July 24, 2015, and increase the percentage of production space for those cannabis producers who intend to grow plants for cannabis retailers holding medical cannabis endorsements if the cannabis producer designates the increased production space to plants determined by the department under RCW 69.50.375 to be of a THC concentration, CBD concentration, or THC to CBD ratio appropriate for cannabis concentrates, useable cannabis, or cannabis-infused products to be sold to qualifying patients. If current cannabis producers do not use all the increased production space, the board may reopen the license period for new cannabis producer license applicants but only to those cannabis producers who agree to grow plants for cannabis retailers holding medical cannabis endorsements. Priority in licensing must be given to cannabis producer license applicants who have an application pending on July 24, 2015, but who are not yet licensed and then to new cannabis producer license applicants. After January 1, 2017, any reconsideration of the limits on the amount of square feet permitted to be in production to meet the medical needs of qualifying patients must consider information contained in the medical cannabis authorization database established in RCW 69.51A.230;
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Except as provided in RCW 69.50.335, determining, in consultation with the office of financial management, the maximum number of retail outlets that may be licensed in each county, taking into consideration:
Population distribution;
Security and safety issues;
The provision of adequate access to licensed sources of cannabis concentrates, useable cannabis, and cannabis-infused products to discourage purchases from the illegal market; and
The number of retail outlets holding medical cannabis endorsements necessary to meet the medical needs of qualifying patients. The board must reconsider and increase the maximum number of retail outlets it established before July 24, 2015, and allow for a new license application period and a greater number of retail outlets to be permitted in order to accommodate the medical needs of qualifying patients and designated providers. After January 1, 2017, any reconsideration of the maximum number of retail outlets needed to meet the medical needs of qualifying patients must consider information contained in the medical cannabis authorization database established in RCW 69.51A.230.
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In making the determination under (a) of this subsection, the board must consider written input from an incorporated city or town, or county legislative authority when evaluating concerns related to outlet density.
An incorporated city or town, or county legislative authority, may enact an ordinance prescribing outlet density limitations. An ordinance may not affect licenses issued before the effective date of the ordinance prescribing outlet density limitations.
The board may adopt rules to identify how local jurisdiction input will be evaluated;
Determining the maximum quantity of cannabis a cannabis producer may have on the premises of a licensed location at any time without violating Washington state law;
Determining the maximum quantities of cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products a cannabis processor may have on the premises of a licensed location at any time without violating Washington state law;
Determining the maximum quantities of cannabis concentrates, useable cannabis, and cannabis-infused products a cannabis retailer may have on the premises of a retail outlet at any time without violating Washington state law;
In making the determinations required by this section, the board shall take into consideration:
Security and safety issues;
The provision of adequate access to licensed sources of cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products to discourage purchases from the illegal market; and
Economies of scale, and their impact on licensees' ability to both comply with regulatory requirements and undercut illegal market prices;
Determining the nature, form, and capacity of all containers to be used by licensees to contain cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products, and their labeling requirements;
In consultation with the department of agriculture and the department, establishing classes of cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products according to grade, condition, cannabinoid profile, THC concentration, CBD concentration, or other qualitative measurements deemed appropriate by the board;
Establishing reasonable time, place, and manner restrictions and requirements regarding advertising of cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products that are not inconsistent with the provisions of this chapter, taking into consideration:
Federal laws relating to cannabis that are applicable within Washington state;
Minimizing exposure of people under 21 years of age to the advertising;
The inclusion of medically and scientifically accurate information about the health and safety risks posed by cannabis use in the advertising; and
Ensuring that retail outlets with medical cannabis endorsements may advertise themselves as medical retail outlets;
Specifying and regulating the time and periods when, and the manner, methods, and means by which, licensees shall transport and deliver cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products within the state;
In consultation with the department and the department of agriculture, prescribing methods of producing, processing, and packaging cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products; conditions of sanitation; and standards of ingredients, quality, and identity of cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products produced, processed, packaged, or sold by licensees;
Specifying procedures for identifying, seizing, confiscating, destroying, and donating to law enforcement for training purposes all cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products produced, processed, packaged, labeled, or offered for sale in this state that do not conform in all respects to the standards prescribed by this chapter or the rules of the board; and
A review of the board's rules regulating cannabis production, processing, sales, and other cannabis activities, to be initiated by rule making by October 1, 2025, within existing resources, to eliminate or appropriately modify rules found to:
Create an undue administrative burden on licensees after considering the relation and effectiveness of the rule to preventing youth access, the inversion and diversion of cannabis and cannabis products into and out of Washington's cannabis market, or furthering public safety efforts;
Duplicate areas of enforcement delegated to local control in other legal industries;
Have previously resulted in documented inconsistent or contradictory enforcement by board representatives;
Duplicate authority granted by the legislature to other agencies, including with respect to the accreditation of independent, third-party testing laboratories by the department of agriculture under RCW 69.50.348; or
Require business practices of license holders unrelated to youth access, the prevention of inversion and diversion of cannabis and cannabis products into and out of Washington's cannabis market, or public safety efforts including, but not limited to, requiring licensees or employees to use physical sign-in sheets and name tags.
For the purpose of carrying into effect the provisions of chapter 3, Laws of 2013 according to their true intent or of supplying any deficiency therein, the board may adopt rules not inconsistent with the spirit of chapter 3, Laws of 2013 as are deemed necessary or advisable. Without limiting the generality of the preceding sentence, the board is empowered to adopt rules regarding the following:
The equipment and management of retail outlets and premises where cannabis is produced or processed, and inspection of the retail outlets and premises where cannabis is produced or processed;
The books and records to be created and maintained by licensees, the reports to be made thereon to the board, and inspection of the books and records;
Methods of producing, processing, and packaging cannabis, useable cannabis, cannabis concentrates, and cannabis-infused products; conditions of sanitation; safe handling requirements; approved pesticides and pesticide testing requirements; and standards of ingredients, quality, and identity of cannabis, useable cannabis, cannabis concentrates, and cannabis-infused products produced, processed, packaged, or sold by licensees;
Security requirements for retail outlets and premises where cannabis is produced or processed, and safety protocols for licensees and their employees;
Screening, hiring, training, and supervising employees of licensees;
Retail outlet locations and hours of operation;
Labeling requirements and restrictions on advertisement of cannabis, useable cannabis, cannabis concentrates, cannabis health and beauty aids, and cannabis-infused products for sale in retail outlets;
Forms to be used for purposes of this chapter and chapter 69.51A RCW or the rules adopted to implement and enforce these chapters, the terms and conditions to be contained in licenses issued under this chapter and chapter 69.51A RCW, and the qualifications for receiving a license issued under this chapter and chapter 69.51A RCW, including a criminal history record information check. The board may submit any criminal history record information check to the Washington state patrol and to the identification division of the federal bureau of investigation in order that these agencies may search their records for prior arrests and convictions of the individual or individuals who filled out the forms. The board must require fingerprinting of any applicant whose criminal history record information check is submitted to the federal bureau of investigation;
The manner of giving and serving notices required by this chapter and chapter 69.51A RCW or rules adopted to implement or enforce these chapters;
Times and periods when, and the manner, methods, and means by which, licensees transport and deliver cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products within the state;
Identification, seizure, confiscation, destruction, or donation to law enforcement for training purposes of all cannabis, cannabis concentrates, useable cannabis, and cannabis-infused products produced, processed, sold, or offered for sale within this state which do not conform in all respects to the standards prescribed by this chapter or chapter 69.51A RCW or the rules adopted to implement and enforce these chapters;
The prohibition of any type of device used in conjunction with a cannabis vapor product and the prohibition of the use of any type of additive, solvent, ingredient, or compound in the production and processing of cannabis products, including cannabis vapor products, when the board determines, following consultation with the department of health or any other authority the board deems appropriate, that the device, additive, solvent, ingredient, or compound may pose a risk to public health or youth access; and
Requirements for processors to submit under oath to the department of health a complete list of all constituent substances and the amount and sources thereof in each cannabis vapor product, including all additives, thickening agents, preservatives, compounds, and any other substance used in the production and processing of each cannabis vapor product.
Rules adopted on retail outlets holding medical cannabis endorsements must be adopted in coordination and consultation with the department.
In a manner consistent with RCW 69.50.562 and 69.50.345, the board must adopt rules to provide for the establishment of new programs and perfect and expand existing programs for compliance education for licensed cannabis businesses and their employees. The rules must include a voluntary compliance program created in consultation with licensed cannabis businesses and their employees. The voluntary compliance program must include recommendations on abating violations of this chapter and rules adopted under this chapter.
The board must regularly audit the data in the cannabis central reporting system to identify outliers or anomalies in data for inconsistencies in reporting, for the purposes of identifying locations where either or both of the following activities are occurring in violation of this chapter, and undertaking enforcement to prevent their occurrence:
Inversion of cannabis or cannabis products into the regulated cannabis system involving a person licensed under RCW 69.50.325 as a cannabis producer, processor, or retailer, purchasing or obtaining cannabis or cannabis products from an unauthorized person or source; or
Diversion of cannabis or cannabis products out of the regulated cannabis system involving a person licensed under RCW 69.50.325 as a cannabis producer, processor, or retailer, selling or transferring cannabis or cannabis products to an unauthorized person or recipient.
In addition to data in the cannabis central reporting system including reports of sales of cannabis and cannabis products, for the purpose of administering this section and preventing inversion and diversion of cannabis and cannabis products, the board may also consider and compare any books and records of cannabis licensees that the board has authority to inspect under this chapter and shall also consider and compare the following data or information:
The status of a cannabis license issued by the board and whether it is active and valid or whether it has been suspended, revoked, canceled, or has otherwise not been active and valid during any applicable time;
The status of a business license issued by the department of revenue and whether it is active and valid or whether it has been suspended, revoked, canceled, or has otherwise not been active and valid during any applicable time; and
If the board suspects inversion or diversion activities by a licensee, the board may require the licensee to submit the following for inspection:
Water utility billing records;
Electricity and natural gas billing records;
Filings and reports related to taxes or business activity submitted to the department of revenue.
For purposes of this section, "cannabis central reporting system" means the system used by the board for the reporting of events or information submitted by or on behalf of cannabis licensees and certified laboratories to the board, as required by the board.
Before adopting a rule described in subsection (5) of this section, an agency must:
Clearly state in detail the general goals and specific objectives of the statute that the rule implements;
Determine that the rule is needed to achieve the general goals and specific objectives stated under (a) of this subsection, and analyze alternatives to rule making and the consequences of not adopting the rule;
Provide notification in the notice of proposed rule making under RCW 34.05.320 that a preliminary cost-benefit analysis is available. The preliminary cost-benefit analysis must fulfill the requirements of the cost-benefit analysis under (d) of this subsection. If the agency files a supplemental notice under RCW 34.05.340, the supplemental notice must include notification that a revised preliminary cost-benefit analysis is available. A final cost-benefit analysis must be available when the rule is adopted under RCW 34.05.360;
Determine that the probable benefits of the rule are greater than its probable costs, taking into account both the qualitative and quantitative benefits and costs and the specific directives of the statute being implemented;
Determine, after considering alternative versions of the rule and the analysis required under (b), (c), and (d) of this subsection, that the rule being adopted is the least burdensome alternative for those required to comply with it that will achieve the general goals and specific objectives stated under (a) of this subsection;
Determine that the rule does not require those to whom it applies to take an action that violates requirements of another federal or state law;
Determine that the rule does not impose more stringent performance requirements on private entities than on public entities unless required to do so by federal or state law;
Determine if the rule differs from any federal regulation or statute applicable to the same activity or subject matter and, if so, determine that the difference is justified by the following:
A state statute that explicitly allows the agency to differ from federal standards; or
Substantial evidence that the difference is necessary to achieve the general goals and specific objectives stated under (a) of this subsection; and
Coordinate the rule, to the maximum extent practicable, with other federal, state, and local laws applicable to the same activity or subject matter.
In making its determinations pursuant to subsection (1)(b) through (h) of this section, the agency must place in the rule-making file documentation of sufficient quantity and quality so as to persuade a reasonable person that the determinations are justified.
Before adopting rules described in subsection (5) of this section, an agency must place in the rule-making file a rule implementation plan for rules filed under each adopting order. The plan must describe how the agency intends to:
Implement and enforce the rule, including a description of the resources the agency intends to use;
Inform and educate affected persons about the rule;
Promote and assist voluntary compliance; and
Evaluate whether the rule achieves the purpose for which it was adopted, including, to the maximum extent practicable, the use of interim milestones to assess progress and the use of objectively measurable outcomes.
After adopting a rule described in subsection (5) of this section regulating the same activity or subject matter as another provision of federal or state law, an agency must do all of the following:
Coordinate implementation and enforcement of the rule with the other federal and state entities regulating the same activity or subject matter by making every effort to do one or more of the following:
Deferring to the other entity;
Designating a lead agency; or
Entering into an agreement with the other entities specifying how the agency and entities will coordinate implementation and enforcement.
If the agency is unable to comply with this subsection (4)(a), the agency must report to the legislature pursuant to (b) of this subsection;
b. Report to the joint administrative rules review committee:
i. The existence of any overlap or duplication of other federal or state laws, any differences from federal law, and any known overlap, duplication, or conflict with local laws; and
ii. Make recommendations for any legislation that may be necessary to eliminate or mitigate any adverse effects of such overlap, duplication, or difference.
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Except as provided in (b) of this subsection, this section applies to:
Significant legislative rules of the departments of ecology, labor and industries, health, revenue, social and health services, and natural resources, the employment security department, the forest practices board, the office of the insurance commissioner, the state building code council, and the liquor and cannabis board in implementing chapter 69.50 RCW, and to the legislative rules of the department of fish and wildlife implementing chapter 77.55 RCW; and
Any rule of any agency, if this section is voluntarily made applicable to the rule by the agency, or is made applicable to the rule by a majority vote of the joint administrative rules review committee within forty-five days of receiving the notice of proposed rule making under RCW 34.05.320.
This section does not apply to:
Emergency rules adopted under RCW 34.05.350;
Rules relating only to internal governmental operations that are not subject to violation by a nongovernment party;
Rules adopting or incorporating by reference without material change federal statutes or regulations, Washington state statutes, rules of other Washington state agencies, shoreline master programs other than those programs governing shorelines of statewide significance, or, as referenced by Washington state law, national consensus codes that generally establish industry standards, if the material adopted or incorporated regulates the same subject matter and conduct as the adopting or incorporating rule;
Rules that only correct typographical errors, make address or name changes, or clarify language of a rule without changing its effect;
Rules the content of which is explicitly and specifically dictated by statute, including any rules of the department of revenue adopted under the authority of RCW 82.32.762(3);
Rules that set or adjust fees under the authority of RCW 19.02.075 or that set or adjust fees or rates pursuant to legislative standards, including fees set or adjusted under the authority of RCW 19.80.045;
Rules of the department of social and health services relating only to client medical or financial eligibility and rules concerning liability for care of dependents; or
Rules of the department of revenue that adopt a uniform expiration date for reseller permits as authorized in RCW 82.32.780 and 82.32.783.
For purposes of this subsection:
A "procedural rule" is a rule that adopts, amends, or repeals (A) any procedure, practice, or requirement relating to any agency hearings; (B) any filing or related process requirement for making application to an agency for a license or permit; or (C) any policy statement pertaining to the consistent internal operations of an agency.
An "interpretive rule" is a rule, the violation of which does not subject a person to a penalty or sanction, that sets forth the agency's interpretation of statutory provisions it administers.
A "significant legislative rule" is a rule other than a procedural or interpretive rule that (A) adopts substantive provisions of law pursuant to delegated legislative authority, the violation of which subjects a violator of such rule to a penalty or sanction; (B) establishes, alters, or revokes any qualification or standard for the issuance, suspension, or revocation of a license or permit; or (C) adopts a new, or makes significant amendments to, a policy or regulatory program.
In the notice of proposed rule making under RCW 34.05.320, an agency must state whether this section applies to the proposed rule pursuant to (a)(i) of this subsection, or if the agency will apply this section voluntarily.
By January 31, 1996, and by January 31st of each even-numbered year thereafter, the office of regulatory assistance, after consulting with state agencies, counties, and cities, and business, labor, and environmental organizations, must report to the governor and the legislature regarding the effects of this section on the regulatory system in this state. The report must document:
The rules proposed to which this section applied and to the extent possible, how compliance with this section affected the substance of the rule, if any, that the agency ultimately adopted;
The costs incurred by state agencies in complying with this section;
Any legal action maintained based upon the alleged failure of any agency to comply with this section, the costs to the state of such action, and the result;
The extent to which this section has adversely affected the capacity of agencies to fulfill their legislatively prescribed mission;
The extent to which this section has improved the acceptability of state rules to those regulated; and
Any other information considered by the office of financial management to be useful in evaluating the effect of this section.