Lawmakers in Olympia may soon force the state’s weed regulator to loosen penalties on pot farmers and retailers, metaphorically forcing the Liquor and Cannabis Board (LCB) to take a huge bong hit and chill out. After years of Washington’s weed industry complaining that they face a punitive enforcement climate, the state Legislature is now close to passing a proposed law that would dramatically reform the state’s pot regulatory enforcement rules.
If passed, the law would reduce penalties for the majority of regulatory violations, with some penalties changing, from a canceled license after the first infraction under the old rules to just a written warning under the proposed new rules.
The bill, SB 5318, passed the Senate last month and passed a crucial House committee vote on Monday. It’s now sitting in the House’s Rules Committee, waiting to be scheduled for a full vote on the House floor. That means the bill is now one vote away from passing both chambers of the Legislature, giving the bill a viable chance of passing before the legislative session ends on April 28.
If the Legislature passes the law, it will fundamentally change how the LCB enforces pot regulations. The House and Senate versions have some slightly different amendments, but both laws would make three fundamental changes to the law:
• Force the LCB to written warnings instead of punishments for violations that do not affect public safety;
• Waive fines and sanctions for violations that do not affect public safety if a pot business remedies the mistake;
• Create a program where a pot business can request advice from the LCB and not be penalized for a violation if they resolve the issue.
This new set of laws is basically a casual bong rip compared to the punitive way the LCB currently enforces Washington’s pot regulations. At the moment, most violations result in monetary fines and suspensions on the first offense for even minor infractions. For example—a retailer that fails to log one single joint into the state’s pot tracking system currently faces a 5-day suspension or a $2,500 fine; a pot grower that is short on cash and uses their own funds to make payroll without first getting LCB approval faces an immediate cancellation of their license.
The penalties are harsh and the LCB has been characterized by the pot industry as quick to levy the most punitive punishment possible. Robert McVay, an attorney with the national law firm Harris Bricken, said last year that “of all the jurisdictions in which we work,” the LCB was “unique in its eagerness to shut down businesses…the types of violations that can cause the WSLCB to cancel a license and shut down a business are surprisingly easy to commit, even for dedicated compliant businesses.”
Senator Guy Palumbo, a Democrat from Maltby who sponsored the enforcement reform bill, said the law would help the state’s small pot businesses.
“I am a champion for small businesses and a lot of these businesses are just really being hurt by the LCB enforcement actions,” Palumbo said, “I think we need to move to a compliance model and not a 'got you' enforcement model.
Palumbo was among a bipartisan group of ten lawmakers who called on Gov. Jay Inslee to rescind his nomination of Russ Hauge, one of the LCB’s board members, over Hauge’s contribution to the “toxic culture” of enforcement at the LCB. “We are united in our belief that you must hold the leaders at the top of the LCB accountable. Rejection of the toxic culture at LCB should start with not reappointing Mr. Hauge,” the lawmakers wrote in the February letter, first published by The Stranger. Inslee declined to rescind the nomination.
Some members of the local pot industry have described the proposed law as a handout to large businesses trying to avoid license cancellations. A blog post on pot retailer Uncle Ike’s website described the law as a “get-out-of-jail-free card” for the state’s biggest pot businesses and said the law was being unfairly lobbied for by the Washington CannaBusiness Association, a trade group that represents some of the state’s biggest pot brands.
But at least some of those industry members originally opposed to the legislation appear to have changed their mind on the subject. Caitlein Ryan, a pot business owner and a board member on the Cannabis Alliance, testified to the House in January that her organization believed the bill needed to be changed to make sure “those bad actors that have a lot of resources are still being held accountable for what they need to be held accountable for.” But the Cannabis Alliance is now supporting the legislation, according to Lara Kaminsky, the trade group’s executive director.
“The Cannabis Alliance, in tandem with other organizations and the WSLCB have worked hard on this bill. We welcomed the opportunity to craft legislation with the LCB to establish a compliance program and to improve the relationship between licensees and the agency; two things this bill does and that are desperately needed,” Kaminsky said in an emailed statement.
