Bill Summary – FastDemocracy

H-1656.1
                                HOUSE BILL 1667
     State of Washington       67th Legislature       2022 Regular Session
     By Representative Wylie
     Prefiled 12/20/21. Read first time 01/10/22.    Referred to Committee
     on Commerce & Gaming.
     AN ACT Relating to ownership of cannabis-related businesses;
 amending RCW 69.50.331 and 69.50.325; and providing an effective
 date.
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
     Sec. 1.   RCW 69.50.331 and 2020 c 154 s 1 are each amended to
 read as follows:
     (1) For the purpose of considering any application for a license
 to produce, process, research, transport, or deliver marijuana,
 useable marijuana, marijuana concentrates, or marijuana-infused
 products subject to the regulations established under RCW 69.50.385,
 or sell marijuana, or for the renewal of a license to produce,
 process,   research,   transport,  or   deliver   marijuana,  useable
 marijuana, marijuana concentrates, or marijuana-infused products
 subject to the regulations established under RCW 69.50.385, or sell
 marijuana, the board must conduct a comprehensive, fair, and
 impartial evaluation of the applications timely received.
     (a) The board may cause an inspection of the premises to be made,
 and may inquire into all matters in connection with the construction
 and operation of the premises. For the purpose of reviewing any
 application for a license and for considering the denial, suspension,
 revocation, cancellation, or renewal or denial thereof, of any
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 license, the board may consider any prior criminal arrests or
 convictions of the applicant, any public safety administrative
 violation history record with the board, and a criminal history
 record information check. The board may submit the 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 provisions of RCW 9.95.240 and of
 chapter 9.96A RCW do not apply to these cases. Subject to the
 provisions of this section, the board may, in its discretion, grant
 or deny the renewal or license applied for. Denial may be based on,
 without limitation, the existence of chronic illegal activity
 documented in objections submitted pursuant to subsections (7)(c) and
 (10) of this section. Authority to approve an uncontested or
 unopposed license may be granted by the board to any staff member the
 board designates in writing. Conditions for granting this authority
 must be adopted by rule.
     (b) No license of any kind may be issued to:
     (i) A person under the age of twenty-one years;
     (ii) A ((person doing business as a sole proprietor who has not
 lawfully resided in the state for at least six months prior to
 applying to receive a license;
     (iii) A partnership, employee cooperative, association, nonprofit
 corporation, or corporation)) business entity or nonprofit entity
 unless formed under the laws of this state((, and unless all of the
 members thereof are qualified to obtain a license as provided in this
 section)); or
     (((iv))) (iii) A person whose place of business is conducted by a
 manager or agent, unless the manager or agent possesses the same
 qualifications required of the licensee.
     (c)(i) For any marijuana license issued by the board, all natural
 persons holding an ownership interest of more than 10 percent of the
 business entity or nonprofit entity licensed or proposed to be
 licensed must qualify for and be named on the license. If no natural
 person owns more than 10 percent of the entity, the natural person
 with the largest ownership interest must qualify for and be named on
 the license. Any natural person holding an ownership interest of 10
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 percent or less of the entity is not required to qualify for or be
 named on the license.
     (ii) The identification of any natural person holding an
 ownership interest of 10 percent or less but more than one percent of
 the entity, who is not otherwise required to qualify for and be named
 on the license as provided in (c)(i) of this subsection, must be
 disclosed to the board.
     (d) The board may deny a license or license renewal to an entity
 if the board is unable to investigate a nonresident interest holder
 in the entity with greater ownership than 10 percent in accordance
 with the investigatory standards applicable to the investigation of a
 state resident.
     (e) The board must by rule establish an additional application
 fee for license applicants who are business entities or nonprofit
 entities. The fee must be in an amount sufficient to offset the
 additional investigative and administrative costs associated with the
 licensure of such entities and is in addition to any other
 application or licensing fee imposed under this chapter. The
 additional application fee in this subsection (1)(e) applies to
 applications to add an owner to an existing license as well as to
 applications for new producer, processor, and retailer licenses.
 Nothing in this section requires the board to accept applications for
 new producer, processor, or retailer licenses.
     (2)(a) The board may, in its discretion, subject to RCW
 43.05.160, 69.50.563, 69.50.562, 69.50.334, and 69.50.342(3) suspend
 or cancel any license; and all protections of the licensee from
 criminal or civil sanctions under state law for producing,
 processing,    researching,    or   selling    marijuana,    marijuana
 concentrates,   useable  marijuana,   or  marijuana-infused   products
 thereunder must be suspended or terminated, as the case may be.
     (b) The board must immediately suspend the license of a person
 who has been certified pursuant to RCW 74.20A.320 by the department
 of social and health services as a person who is not in compliance
 with a support order. If the person has continued to meet all other
 requirements for reinstatement during the suspension, reissuance of
 the license is automatic upon the board's receipt of a release issued
 by the department of social and health services stating that the
 licensee is in compliance with the order.
     (c) The board may request the appointment of administrative law
 judges under chapter 34.12 RCW who shall have power to administer
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 oaths, issue subpoenas for the attendance of witnesses and the
 production of papers, books, accounts, documents, and testimony,
 examine witnesses, receive testimony in any inquiry, investigation,
 hearing, or proceeding in any part of the state, and consider
 mitigating and aggravating circumstances in any case and deviate from
 any prescribed penalty, under rules the board may adopt.
     (d) Witnesses must be allowed fees and mileage each way to and
 from any inquiry, investigation, hearing, or proceeding at the rate
 authorized by RCW 34.05.446. Fees need not be paid in advance of
 appearance of witnesses to testify or to produce books, records, or
 other legal evidence.
     (e) In case of disobedience of any person to comply with the
 order of the board or a subpoena issued by the board, or any of its
 members, or administrative law judges, or on the refusal of a witness
 to testify to any matter regarding which he or she may be lawfully
 interrogated, the judge of the superior court of the county in which
 the person resides, on application of any member of the board or
 administrative law judge, compels obedience by contempt proceedings,
 as in the case of disobedience of the requirements of a subpoena
 issued from said court or a refusal to testify therein.
     (3) Upon receipt of notice of the suspension or cancellation of a
 license, the licensee must forthwith deliver up the license to the
 board. Where the license has been suspended only, the board must
 return the license to the licensee at the expiration or termination
 of the period of suspension. The board must notify all other
 licensees in the county where the subject licensee has its premises
 of the suspension or cancellation of the license; and no other
 licensee or employee of another licensee may allow or cause any
 marijuana, marijuana concentrates, useable marijuana, or marijuana-
 infused products to be delivered to or for any person at the premises
 of the subject licensee.
     (4) Every license issued under this chapter is subject to all
 conditions and restrictions imposed by this chapter or by rules
 adopted by the board to implement and enforce this chapter. All
 conditions and restrictions imposed by the board in the issuance of
 an individual license must be listed on the face of the individual
 license along with the trade name, address, and expiration date.
     (5) Every licensee must post and keep posted its license, or
 licenses, in a conspicuous place on the premises.
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     (6) No licensee may employ any person under the age of twenty-one
 years.
     (7)(a) Before the board issues a new or renewed license to an
 applicant it must give notice of the application to the chief
 executive officer of the incorporated city or town, if the
 application is for a license within an incorporated city or town, or
 to the county legislative authority, if the application is for a
 license outside the boundaries of incorporated cities or towns, or to
 the tribal government if the application is for a license within
 Indian country, or to the port authority if the application for a
 license is located on property owned by a port authority.
     (b) The incorporated city or town through the official or
 employee selected by it, the county legislative authority or the
 official or employee selected by it, the tribal government, or port
 authority has the right to file with the board within twenty days
 after the date of transmittal of the notice for applications, or at
 least thirty days prior to the expiration date for renewals, written
 objections against the applicant or against the premises for which
 the new or renewed license is asked. The board may extend the time
 period for submitting written objections upon request from the
 authority notified by the board.
     (c) The written objections must include a statement of all facts
 upon which the objections are based, and in case written objections
 are filed, the city or town or county legislative authority may
 request, and the board may in its discretion hold, a hearing subject
 to the applicable provisions of Title 34 RCW. If the board makes an
 initial decision to deny a license or renewal based on the written
 objections of an incorporated city or town or county legislative
 authority, the applicant may request a hearing subject to the
 applicable provisions of Title 34 RCW. If a hearing is held at the
 request of the applicant, board representatives must present and
 defend the board's initial decision to deny a license or renewal.
     (d) Upon the granting of a license under this title the board
 must send written notification to the chief executive officer of the
 incorporated city or town in which the license is granted, or to the
 county legislative authority if the license is granted outside the
 boundaries of incorporated cities or towns.
     (8)(a) Except as provided in (b) through (e) of this subsection,
 the board may not issue a license for any premises within one
 thousand feet of the perimeter of the grounds of any elementary or
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 secondary school, playground, recreation center or facility, child
 care center, public park, public transit center, or library, or any
 game arcade admission to which is not restricted to persons aged
 twenty-one years or older.
     (b) A city, county, or town may permit the licensing of premises
 within one thousand feet but not less than one hundred feet of the
 facilities described in (a) of this subsection, except elementary
 schools, secondary schools, and playgrounds, by enacting an ordinance
 authorizing such distance reduction, provided that such distance
 reduction will not negatively impact the jurisdiction's civil
 regulatory enforcement, criminal law enforcement interests, public
 safety, or public health.
     (c) A city, county, or town may permit the licensing of research
 premises allowed under RCW 69.50.372 within one thousand feet but not
 less than one hundred feet of the facilities described in (a) of this
 subsection by enacting an ordinance authorizing such distance
 reduction, provided that the ordinance will not negatively impact the
 jurisdiction's    civil   regulatory    enforcement,    criminal    law
 enforcement, public safety, or public health.
     (d) The board may license premises located in compliance with the
 distance requirements set in an ordinance adopted under (b) or (c) of
 this subsection. Before issuing or renewing a research license for
 premises within one thousand feet but not less than one hundred feet
 of an elementary school, secondary school, or playground in
 compliance with an ordinance passed pursuant to (c) of this
 subsection, the board must ensure that the facility:
     (i) Meets a security standard exceeding that which applies to
 marijuana producer, processor, or retailer licensees;
     (ii) Is inaccessible to the public and no part of the operation
 of the facility is in view of the general public; and
     (iii) Bears no advertising or signage indicating that it is a
 marijuana research facility.
     (e) The board must issue a certificate of compliance if the
 premises met the requirements under (a), (b), (c), or (d) of this
 subsection on the date of the application. The certificate allows the
 licensee   to  operate   the  business   at   the   proposed   location
 notwithstanding a later occurring, otherwise disqualifying factor.
     (f) The board may not issue a license for any premises within
 Indian country, as defined in 18 U.S.C. Sec. 1151, including any fee
 patent lands within the exterior boundaries of a reservation, without
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 the consent of the federally recognized tribe associated with the
 reservation or Indian country.
     (9) A city, town, or county may adopt an ordinance prohibiting a
 marijuana producer or marijuana processor from operating or locating
 a business within areas zoned primarily for residential use or rural
 use with a minimum lot size of five acres or smaller.
     (10) In determining whether to grant or deny a license or renewal
 of any license, the board must give substantial weight to objections
 from an incorporated city or town or county legislative authority
 based upon chronic illegal activity associated with the applicant's
 operations of the premises proposed to be licensed or the applicant's
 operation of any other licensed premises, or the conduct of the
 applicant's patrons inside or outside the licensed premises. "Chronic
 illegal activity" means (a) a pervasive pattern of activity that
 threatens the public health, safety, and welfare of the city, town,
 or county including, but not limited to, open container violations,
 assaults, disturbances, disorderly conduct, or other criminal law
 violations, or as documented in crime statistics, police reports,
 emergency medical response data, calls for service, field data, or
 similar records of a law enforcement agency for the city, town,
 county, or any other municipal corporation or any state agency; or
 (b) an unreasonably high number of citations for violations of RCW
 46.61.502 associated with the applicant's or licensee's operation of
 any licensed premises as indicated by the reported statements given
 to law enforcement upon arrest.
     (11) For the purposes of this section:
     (a) "Entity" has the same meaning as in RCW 23.95.105;
     (b) "Interest" has the same meaning as in RCW 23.95.105; and
     (c) "Interest holder" has the same meaning as in RCW 23.95.105.
     Sec. 2.   RCW 69.50.325 and 2020 c 236 s 6 are each amended to
 read as follows:
     (1) There shall be a marijuana producer's license regulated by
 the board and subject to annual renewal. The licensee is authorized
 to produce: (a) Marijuana for sale at wholesale to marijuana
 processors and other marijuana producers; (b) immature plants or
 clones and seeds for sale to cooperatives as described under RCW
 69.51A.250; and (c) immature plants or clones and seeds for sale to
 qualifying patients and designated providers as provided under RCW
 69.51A.310. The production, possession, delivery, distribution, and
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 sale of marijuana in accordance with the provisions of this chapter
 and the