Take Two: Washington Proposes Reform in “Cannabis 2.0” Initiative
September 3, 2019

In 2014, Washington’s newly minted adult use marijuana market was pioneering. Fast-forward to 2019, and that same market looks comparatively stale and out-of-date, having been modified and improved upon by later-acting states. To its credit, Washington is not sitting idly by; per the Associated Press, the Liquor and Cannabis Board recently issued a proposal it calls “Cannabis 2.0.”

Cannabis 2.0 consists of two bills that the Board proposed to the Washington Legislature. The first would create a “social equity” program. Eleven (of 500) original retail licensees have surrendered their licenses, and under the proposed bill, the Board could reissue those to businesses owned by women, minorities, veterans, or members of a “protected class” under state law. Additionally, local governments could agree to accept more adult-use retailers, and the Board would award those licenses according to the social equity guidelines. The proposed bill would also create a technical support program under which the Department of Commerce would provide six-figure grants to social equity businesses to assist in starting and operating a marijuana business.

The second bill is aimed at the so-called “tier one” cultivators, who are limited under the original law to 2,000 square feet of plants. Under the proposal, tier-one entities will be permitted to cut out the middle man and sell directly to medical patients, either from their facility, at indoor farmers-market type events, or by delivery, subject to certain restrictions. The tier-one growers would also be permitted to expand to at least 5,000 square feet and possibly 8,000 square feet.

Cannabis 2.0 is not revolutionary. It is unclear how many licenses will be available to social equity applicants considering only 11 of the original 500 are currently available for reissue. And if there is not a significant influx of social-equity applications, then the promised six-figure grants won’t have a significant impact. Similarly, allowing tier-one growers to sell directly to medical customers moves the needle, but not radically; there are only 36,000 medical marijuana patients. The most significant change may be the increased canopy space, and even that is relative (in Illinois, for instance, craft grow canopies can be as large as 14,000 square feet). Nevertheless, despite the somewhat limited scope, Washington should be commended for its efforts. It is natural for states to pass historical legalization legislation and consider their work done. The fact that Washington is learning from its experiences (and those of other states) and seeking to improve its program after only five years is a good sign that its legislators and regulators are intent on operating a long-term, successful adult-use marijuana program.

We will continue to monitor developments in Washington and throughout the nation right here on our blog.

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