EHB 1941
SignedHouse
Agricultural coops/cannabis
Authorizing agricultural cooperatives for cannabis producers.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill allows licensed cannabis producers in Washington to form or join agricultural cooperatives, treating cannabis as an agricultural product for cooperative purposes. It clarifies that producers can sell immature plants, clones, and seeds to cooperatives, and ensures cooperative operations follow standard cooperative rules—like one vote per member and limits on profit distribution.
- Allows licensed cannabis producers to form or join agricultural cooperatives under state cooperative law (RCW 24.34.010), treating cannabis as an 'agricultural product' for that purpose.
- Clarifies that cannabis producers may sell immature plants, clones, and seeds to cooperatives (not just to other producers or patients).
- Confirms that cooperative activities—including collective processing, handling, and marketing of cannabis—are permitted under state law, as long as the cooperative follows cooperative rules (e.g., one vote per member, no excessive dividends).
- Maintains existing licensing structure and fees for producers, processors, and retailers ($250 application fee, $1,381 annual renewal fee per location).
- Includes provisions ensuring cooperatives cannot deal in non-member products in greater value than member products.
Who is affected
- Cannabis producers — Cannabis producers can now legally form or join agricultural cooperatives to collectively process, market, and sell immature plants, clones, seeds, or wholesale cannabis—similar to how other farmers cooperate.
- Cannabis processors and retailers — Cannabis processors and retailers may now receive immature plants, clones, or seeds from cooperatives formed by producers, potentially expanding supply chain options.
- Medical cannabis patients and designated providers — Patients and designated providers who receive immature plants or clones from licensed producers may gain more stable access through cooperative arrangements.
- Agricultural cooperatives — Existing agricultural cooperatives (e.g., for fruits, nuts, dairy) may expand to include cannabis producers, fostering cross-sector collaboration.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Cannabis producers—especially small and mid-sized operations—can now legally form or join cooperatives to collectively process, market, and sell immature plants, clones, and seeds, reducing per-unit costs and increasing bargaining power against large processors and retailers—similar to how dairy or fruit cooperatives support family farms.
Business & EmploymentPeopleRef: Sec. 1, RCW 69.50.325(1)(b) & Sec. 2, RCW 24.34.010Medical patients and designated providers may gain more reliable access to immature plants and clones through cooperative channels, supporting continuity of care—especially in rural or underserved areas where supply chains are fragile and patient-specific cultivars are in demand.
HealthcarePeopleRef: Sec. 1, RCW 69.50.325(1)(b) & Sec. 2, RCW 24.34.010The requirement that cooperatives operate for mutual benefit—under democratic governance (one vote per member) and profit caps—ensures that economic gains accrue to member-producers rather than outside investors, aligning incentives with everyday growers and workers.
Business & EmploymentPeopleRef: Sec. 2, RCW 24.34.010 (cooperative governance: 'one vote per member' and 'no excessive dividends')Formally recognizing cannabis as an agricultural product under cooperative law legitimizes its role in Washington’s broader agricultural economy—potentially opening access to existing USDA programs, extension services, and risk-management tools previously unavailable to cannabis growers.
agriculturePeopleRef: Sec. 2, RCW 24.34.010 (cannabis defined as 'agricultural product' for cooperative purposes)By permitting collective handling and marketing, the bill enables small producers to pool logistics, storage, and distribution—reducing transportation costs and market entry barriers, especially for rural or limited-resource growers who lack infrastructure.
Business & EmploymentLean peopleRef: Sec. 2, RCW 24.34.010 (cooperatives may 'handle' and 'market' products collectively)
Potential Concerns (5)
The bill formalizes cooperative structures for cannabis producers, but does not alter licensing fees or create new funding mechanisms—meaning small producers still face the same $250 application and $1,381 annual renewal fees per location, which may remain a barrier for low-revenue or new entrants without economies of scale.
Business & EmploymentRef: Sec. 1, RCW 69.50.325(1)The bill does not clarify whether local zoning or land-use restrictions (e.g., moratoria on cannabis cultivation) are overridden for cooperatives, potentially leaving producers vulnerable to local opposition even under a cooperative model—reinforcing existing regulatory uncertainty for small operators.
Local GovernmentRef: Sec. 1, RCW 69.50.325(1) & Sec. 2, RCW 24.34.010Allowing sale of immature plants, clones, and seeds to cooperatives expands the legal distribution channel for cannabis biomass before full maturation—potentially increasing diversion risk if cooperatives lack robust tracking or security protocols, especially in unregulated or informal networks.
Public SafetyPeopleRef: Sec. 1, RCW 69.50.325(1)The restriction that cooperatives cannot handle non-member products in greater value than member products may limit scalability and efficiency gains—especially for larger cooperatives that could otherwise benefit from economies of scale by processing mixed agricultural streams, potentially disincentivizing cross-sector collaboration.
Business & EmploymentPeopleRef: Sec. 2, RCW 24.34.010 (third requirement: 'shall not deal in the products of nonmembers to an amount greater in value than such as are handled for members')The bill does not specify how cooperative activity might affect LCB licensing revenue; if cooperatives reduce the number of standalone producers (e.g., by consolidating operations), licensing fee revenue could decline—potentially straining state or local budgets that rely on cannabis revenue for public services.
FinancialRef: Fiscal Impact section (not in statutory text)
Who Is Most Affected
Small- and mid-sized cannabis producers benefit significantly: cooperatives lower entry barriers, reduce marketing costs, and increase bargaining power—though they must still comply with licensing fees and may face local zoning hurdles.
Medical patients and designated providers gain more stable access to clones and immature plants—supporting continuity of care and cultivar-specific needs—especially where supply chains are thin or fragmented.
Large processors and retailers may benefit from more standardized inputs via cooperatives, but also face reduced ability to vertically integrate or dominate supply—potentially increasing input costs or diversifying supplier base.
Existing agricultural cooperatives (e.g., for fruit, nuts, dairy) may expand into cannabis—leveraging shared infrastructure and expertise—but must comply with the new 'non-member product' cap, limiting cross-commodity efficiency gains.
Local governments retain authority over zoning and moratoria, but may face increased pressure to accommodate cooperative facilities—especially if producers consolidate under fewer sites, potentially reducing local tax revenue per job or increasing demand for public services.