Washington State Senate Committee Advances Cannabis Direct Sales Bill

LOS ANGELES- The Washington State Senate Labor and Commerce Committee held a public hearing on Senate Bill 5403, legislation proposing to allow licensed cannabis producers and processors to sell cannabis flower directly to consumers. The bill stipulates that such sales must be limited to cannabis flower produced by the licensee and must comply with existing state regulations, including purchase limits and taxation. Specifically, all direct-to-consumer sales would be subject to the state’s 37% cannabis excise tax, with pricing and advertising reflecting this tax.

During the hearing, a significant majority of the 23 individuals who testified expressed support for the bill, highlighting potential benefits for small-scale producers and increased consumer choice. However, concerns were raised regarding market impacts and the potential for vertical integration. In response to these concerns, an amendment was introduced by Senator Rebecca Saldaña, the bill’s primary sponsor, proposing a cap on direct sales at 1,000 pounds of cannabis flower per business entity annually.

The committee had initially scheduled an executive session to vote on the bill for February 14, 2025, but this was rescheduled to February 21, 2025, to allow for further consideration of the proposed amendment and its implications.

If enacted, this legislation would mark a significant shift in Washington’s cannabis market structure, which has traditionally maintained a separation between producers, processors, and retailers since the legalization of cannabis in 2012. The bill aims to support a sustainable cannabis industry by providing producers and processors with additional avenues for revenue and fostering closer connections between consumers and producers.