HB 2740
In CommitteeHouse
Hemp-derived cannabinoids
Concerning hemp-derived cannabinoid products.
This status may be delayed. See Action History below for the latest updates.
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 creates a new regulatory framework for hemp-derived cannabinoid products (like CBD or delta-8 gummies) in Washington State, distinguishing them from cannabis by limiting THC to 0.4 milligrams per container and requiring registration, testing, and age restrictions. It also allows licensed cannabis processors to make these products and imposes a 10% tax on their sale.
- Defines 'hemp-derived cannabinoid product' and sets strict limits: each container may contain no more than 0.4 milligrams total tetrahydrocannabinols (THC), and only cannabinoids naturally occurring in hemp may be used.
- Requires manufacturers, distributors, and retailers to register each product formulation with the Washington State Department of Agriculture and pay an annual fee of at least $2,500 per formulation.
- Prohibits sale of hemp-derived cannabinoid products to anyone under 21 years of age, with strict age-verification requirements at point of sale.
- Allows licensed cannabis processors to legally produce and sell hemp-derived cannabinoid products, as long as they meet the 0.4 mg THC per container limit and other requirements in the new law.
- Imposes a 10% tax on retail sales of hemp-derived cannabinoid products, collected from buyers by sellers and remitted to the state.
- Classifies noncompliant products (e.g., exceeding the 0.4 mg THC limit or containing synthetic cannabinoids) as cannabis products, subject to full cannabis licensing, testing, and enforcement rules.
Who is affected
- Hemp-derived cannabinoid product manufacturers, distributors, and retailers — Must register each product formulation with the Washington State Department of Agriculture and pay an annual fee of at least $2,500 per product; face civil penalties up to $10,000 per product per day for noncompliance; and comply with labeling, testing, and age-verification rules.
- Licensed cannabis processors — Can now legally manufacture and sell hemp-derived cannabinoid products (e.g., edibles, tinctures, vapes) under their existing cannabis license, provided the products meet strict limits on THC content and other requirements.
- Consumers purchasing hemp-derived cannabinoid products — Must be at least 21 years old to purchase hemp-derived cannabinoid products; these products are now subject to age verification like tobacco or alcohol.
- Retailers selling hemp-derived cannabinoid products — Will collect and remit a 10% tax on each sale of hemp-derived cannabinoid products, which must be separately itemized on receipts.
- State of Washington (via Department of Agriculture and Department of Revenue) — Will receive tax revenue (50% of proceeds go to the Hemp Regulatory Account, 50% to the state General Fund) to fund oversight and enforcement of hemp-derived cannabinoid products.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The 0.4 mg THC per container limit—stricter than federal hemp THC thresholds—reduces risk of unintentional intoxication and protects consumers from misleading labeling, especially for edibles and gummies that previously varied widely in potency.
Public SafetyPeopleRef: Sec. 2(1)(b) & Sec. 2(2)Mandatory product registration with certificates of analysis and testing requirements improve product transparency and reduce risk of contamination or mislabeling, benefiting consumers who previously purchased untested hemp-derived products from unregulated sources.
Public SafetyPeopleRef: Sec. 3(2)(c) & Sec. 3(2)(d)Allowing licensed cannabis processors to legally produce hemp-derived cannabinoid products creates a pathway for existing cannabis businesses to diversify into lower-risk markets, potentially stabilizing employment in the regulated cannabis sector during market fluctuations.
Business & EmploymentLean peopleRef: Sec. 4(2)(ii) & Sec. 10(2)Half of the 10% tax revenue ($10M–$20M annually, per fiscal estimates) funds the Hemp Regulatory Account, supporting state oversight and enforcement—reducing reliance on general fund dollars and improving regulatory capacity to protect consumers and small businesses from bad actors.
FinancialPeopleRef: Sec. 6(2)Classifying noncompliant products (e.g., >0.4 mg THC or synthetic cannabinoids) as cannabis brings them under full licensing, testing, and enforcement oversight—closing a regulatory gap that previously allowed unregulated, high-THC products to circulate unchecked.
Public SafetyPeopleRef: Sec. 2(4)
Potential Concerns (5)
Age restriction to 21+ for hemp-derived cannabinoid products may reduce youth access, but enforcement will rely on retailers using the same age-verification systems as tobacco/alcohol—systems with documented gaps in compliance, especially in convenience stores and small retailers where oversight is minimal.
Public SafetyIndustryRef: Sec. 2(3)(a) & Sec. 3(3)(a)The $2,500+ annual registration fee per product formulation and 10% sales tax disproportionately burden small hemp-derived cannabinoid manufacturers and micro-businesses, many of whom operate on thin margins and cannot spread costs across multiple SKUs like large corporations can.
FinancialIndustryRef: Sec. 3(3)(b) & Sec. 6(1)(a)Civil penalties of up to $10,000 per product per day for noncompliance create severe liability risk for small operators—even minor labeling errors or batch-to-batch THC variation above 0.4 mg could trigger penalties that bankrupt small businesses, while large firms absorb such costs as routine compliance overhead.
Business & EmploymentIndustryRef: Sec. 3(4)(a) & Sec. 2(4)The 10% tax on hemp-derived cannabinoid products is regressive—consumers at all income levels pay the same rate, but low-income households spend a higher share of income on such products, effectively reducing their disposable income more than wealthier households.
FinancialIndustryRef: Sec. 6(2)The ban on synthetically produced or non-naturally occurring cannabinoids effectively locks out biotech firms and manufacturers of novel, lab-optimized cannabinoids (e.g., for therapeutic use), consolidating market power toward legacy hemp extractors and large cannabis processors who already control supply chains.
Business & EmploymentIndustryRef: Sec. 2(2)(a)-(b)
Who Is Most Affected
Small hemp-derived cannabinoid manufacturers (e.g., local CBD gummy makers) face high registration fees ($2,500+ per SKU), strict testing, and steep penalties—many will exit the market or be absorbed by larger players, reducing local business diversity.
Large cannabis processors (e.g., MedMen, Veritas Capital-backed firms) gain a legal pathway to enter the hemp-derived market using existing infrastructure, with lower relative compliance costs and ability to absorb fees/penalties—increasing their market share and pricing power.
Low- and middle-income consumers gain safer, standardized products but pay a new 10% tax on items like CBD gummies—effectively reducing disposable income, especially for those using products for self-care or wellness.
Retailers (e.g., gas stations, convenience stores) gain a new product category to sell but must invest in age-verification systems, train staff, and collect/ remit tax—adding compliance burden with limited upside if customers avoid high-tax items.
The state gains new revenue and regulatory authority, but enforcement capacity depends on whether the $2,500 registration fee and 10% tax generate sufficient funds to monitor thousands of SKUs—risking under-enforcement if revenue falls short of projections.