HB 1551 — Extending the cannabis social equity program.

ENGROSSEDH-0183.2 SUBSTITUTE HOUSE BILL 1551 State of Washington 69th Legislature 2025 Regular Session By House Consumer Protection & Business (originally sponsored by Representatives Reeves, Entenman, Morgan, Kloba, Ormsby, Santos, Doglio, and Hill)Hill READRead FIRSTfirst TIMEtime 02/21/25.01/23/25.

Referred to Committee on Consumer Protection & Business.

amending RCW 69.50.33569.50.335; and 43.330.540;

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.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, 2034,2034. and remove a restriction on the issuance of grants to cannabis licensees who meet the social equity applicant criteria.

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 p.

1 ESHBHB 1551 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.

(1)(a) ((Beginning December 1, 2020, andand)) until))Subject Untilto subsection (6) of this section, until July 1, ((2032)) 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.

(b) In accordance with (a) of this subsection, but subject to subsection (6) of this section, the board may issue or reissue:

(d) In addition to the cannabis retailer licenses that may be issued under (a) of this subsection, beginning January 1, 2024, and p.until July 1, ((2032)) 2034, the board may issue up to 52 cannabis retailer licenses for the social equity program.

2p. ESHB 1551 until July 1, ((2032)) 2034, the board may issue up to 52 cannabis retailer licenses for the social equity program.

2 HB 1551 (e)(i) At the time of licensure, all licenses issued under the social equity program under this section may be located in any city, town, or county in the state that allows cannabis retail, cannabis production, or cannabis processing business activities, as applicable, at the proposed location, regardless of:

or p.(ii) The board determines the application does not otherwise meet licensing requirements.

3p. ESHB 1551 (ii) The board determines the application does not otherwise meet licensing requirements.

3 HB 1551 (4) The board must adopt rules to implement this section.

(6)(6)(a) ByBeginning Decemberon 1,the 2025,effective anddate withinof existingthis resources,section thethrough board,June in30, consultation2026, with the departmentboard ofmay commercenot whenopen specifieda innew thislicense subsection,application shallwindow evaluatethrough the cannabis social equity program asand providedmay innot thisissue subsectionor andreissue submit a reportcannabis tolicense theunder governorthis andsection, appropriatein committeesorder for an evaluation of the legislatureprogram withto findingsbe andconducted policyas options.provided in this subsection, to ensure successful implementation of the cannabis social equity program.

(b) 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.

(a)(i) 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;

(b)(ii) An examination of the issuance and reissuance of cannabis retailer licenses that beganoccurred 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;

(c)(iii) An examination, in consultation with the department of commerce, of the awarding of grants and the provision of mentorship underp. 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;

(d)4 TheHB demographic1551 informationunder aboutRCW owners43.330.540 and opportunities for the alignment of licensedthe cannabisboard's businessesimplementation whoof becamethis licensedsection underwith the cannabisdepartment socialof equitycommerce's p.implementation of RCW 43.330.540;

4(iv) ESHBThe 1551demographic 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;

(e)(v) 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 (f)(vi) An examination of the impact of provisions in laws and rules on cannabis licensees in the cannabis social equity program with respect to:

(i)(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);

(ii)(B) the mobility of cannabis licenses to or between jurisdictions;

(iii)(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;

(iv)(D) prioritizing license applications through use of a third-party contractor using a scoring rubric developed by the board;

(v)(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 (vi)(F) the definition of a "social equity applicant." (7)(c) TheOn definitionsJuly in1, this2026, subsectionthe applyrestriction throughouton thisthe sectionboard unlessopening a new license application window under the contextcannabis clearlysocial requiresequity otherwise.program or issuing or reissuing a cannabis license under this section ends.

(7) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

These areasp. 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.

5 HB 1551 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.

Disproportionately impacted areas must include census tracts or comparable geographic areas in the top 15th p.percentile in at least two of the following demographic indicators of populations most impacted by the war on drugs:

5 ESHB 1551 percentile in at least two of the following demographic indicators of populations most impacted by the war on drugs:

(((7))) (8) Except for the process detailed in subsection (1) of this section, the process for creating new cannabis retail licenses under this chapter remains unaltered.

Sec.

3.

RCW 43.330.540 and 2023 c 220 s 1 are each amended to read as follows:

(1) The cannabis social equity technical assistance grant program is established and is to be administered by the department.