House unanimously approves Waters bipartisan bill to stop illegal inversion and diversion of cannabis in Washington

Bipartisan legislation from Rep. Kevin Waters that would improve detection and prevention of the illegal inversion and diversion of cannabis in and out of Washington is headed to the Senate after receiving unanimous approval from the Washington State House of Representatives on Friday.

House Bill 2255 would require the Liquor and Cannabis Board (LCB) to regularly audit the data in the Cannabis Central Reporting System (CCRS), with a goal of identifying and preventing illegal inversion and diversion of cannabis and cannabis products into and out of Washington’s regulated cannabis system.

“We all know inversion and diversion of cannabis is taking place in our state, and we all agree it’s a serious problem we need to prevent,” said Waters, R-Stevenson. “However, current practices are not getting the job done. Unfortunately, what we’re seeing in the industry right now is enforcement being driven by licensees submitting complaints against each other, and enforcement officers spending too much time on minor infractions. This bill would help steer officers to the larger, more serious offenses.”

House Bill 2255 would direct the LCB to compare data in the CCRS with data or information such as the status of a cannabis license, the status of a business license, and the filings and reports related to taxes or business activity submitted to the Department of Revenue.

Under current law, the LCB is required to regularly audit the data in the CCRS to identify outliers or anomalies in data for inconsistencies in reporting, for the purposes of identifying cases of inversion or diversion of cannabis or cannabis products occurring in the state. When the LCB discovers infractions, they are to enforce current policies and prevent further occurrences.

If House Bill 2255 were to become law, the LCB could use the data the agency collects to help direct and prioritize enforcement by entering it into the CCRS. Anything that looked abnormal could lead the LCB to investigate further into possible serious violations.

“We want to eliminate the bad operators by making sure the producers we work with are following Washington’s standards,” said Waters. “We need to make sure they report accurate and honest financial information and follow state cannabis policies and procedures. We also want to make it fair and equitable for all producers throughout Washington. This bill would make that possible.”

House Bill 2255 now heads to the Senate for further consideration.


Washington State House Republican Communications