WA pot industry easier to enter under new licensing rules
After blocking dozens of people with criminal records from entering the legal marijuana industry, Washington state officials managing the 9-year-old industry are preparing to chill out a bit.
Right now, a past felony conviction can be enough to prevent people from getting a license they need to grow, process or sell cannabis on the legal market. But a new rule set to go into effect early next month relaxes those restrictions, making it easier for people with criminal records — including those convicted of selling the now-legal drug — to participate in the industry.
Under the old rules, a felony conviction in the past decade could essentially derail an application for a license. Recent misdemeanor convictions also counted against applicants under the old rules, and applicants would be dinged for any old misdemeanor or felony convictions they failed to disclose.
With the new system, which will go into effect Oct. 2, a serious felony conviction within the past 10 years will still trigger an in-depth review of a person’s application — but the rules no longer state that people with felonies will normally be denied licenses. Less serious felonies also are treated differently; going forward, one Class C felony on a person’s record won’t be enough to hold up their license application. Similarly, if someone has less than three misdemeanor convictions in the past three years, that won’t be enough to prompt a deeper review. Forgetting to report an old misdemeanor from juvenile court won’t count against applicants anymore, either, since the state is running its own criminal history check anyway.
The changes are designed to help ease some barriers that have kept people out of the state’s marijuana industry, especially members of communities that were disproportionately targeted by the war on drugs, said Nicola Reid with the state Liquor and Cannabis Board. That includes Black and Latino people, who were arrested for marijuana possession at higher rates than white people in Washington state, despite reporting lower use of the drug, according to a 2012 study.
Raft Hollingsworth, a cannabis grower who sits on the state’s Social Equity in Cannabis Task Force, described the state’s original system as “extremely racist.” He said it prevented many Black people and other people of color from legally selling pot, simply because they had done the same thing before legalization.
Now, Hollingsworth said, the state is taking “a step toward restorative justice — and this is just a first step.”
The overall number of license denials based on criminal history is not huge, compared with the roughly 1,800 licensed pot businesses operating in Washington state right now.
Since the start of Washington’s legal cannabis system, 43 people have been denied marijuana business licenses based on the criminal history background check; 77% of those applicants were white, according to Liquor and Cannabis Board data.
But there’s a widespread sentiment that people with criminal convictions — many of them people of color — were discouraged from ever applying for a license because they thought they wouldn’t pass the background check.
That’s something the new rules look to correct, Reid said.
“At the onset, someone might look at the rules and say, ‘I have a felony, there’s no way I will have a license issued to me,’ ” said Reid, compliance and communications manager with the Liquor and Cannabis Board’s licensing division.
Reid said even before the recent rule change, it had become standard practice for the Liquor and Cannabis Board to work with applicants before deciding to approve or reject their application. But the agency’s official rules didn’t necessarily communicate that.
“We would never want to be a barrier to someone applying, and we want to be mindful of that,” Reid said.
The changes to the criminal history check are part of a larger effort to create racial equity in the state’s cannabis industry.
Right now, data reported to the Liquor and Cannabis Board shows only 1% of licensed pot growing and processing businesses in Washington are majority owned by Black people, even though about 4% of the state’s overall population is Black. Meanwhile, 81% of pot retail shops have majority white ownership, in a state where about 67% of the population is white.
The state Legislature has noticed those numbers. In 2020, Washington lawmakers approved a social equity program that will award unused marijuana retail licenses — 39 in all — to applicants from communities and neighborhoods that were disproportionately targeted by marijuana enforcement. The Legislature created the Social Equity in Cannabis Task Force to advise how the program should work.
Last week, the task force approved several recommendations, including proposing a formula to help determine who would qualify for the 39 licenses reserved for communities harmed by the war on drugs. The task force also recommended that a portion of marijuana tax revenue go toward helping those applicants launch their businesses.
The task force further suggested that the Legislature make it easier for those applicants to find business locations, including by allowing them to operate closer to facilities such as transit centers, libraries and arcades. Right now, state law mandates that pot stores stay at least 1,000 feet away from those locations, unless a city or county has approved a shorter minimum distance.
State Rep. Melanie Morgan, the chair of the Social Equity in Cannabis Task Force, said the broad array of recommendations coming out of the task force illustrates how many changes are needed to bring racial parity to the industry.
Morgan said she’s pleased that the Liquor and Cannabis Board decided to change the background check requirements without having to be directed by the task force. “They knew this had to change,” said Morgan, D-Parkland.
At the same time, Hollingsworth — the grower who also serves on the task force — said the new rules loosening background check requirements will have only a limited effect for now, since the state continues to cap the total number of pot businesses that can operate. Until more businesses are allowed to open, he said, it will be hard for people to enter the industry.
The task force recommended that all new marijuana licenses that become available over the next eight years go to applicants who meet social equity criteria. Those criteria can include being convicted of a prior marijuana offense or coming from a community that had a disproportionately high share of pot arrests.
Task force members are still discussing options for increasing the total number of licenses allowed.
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