This bill amends existing cannabis licensing law (including RCW 69.50.331 and RCW 69.50.325) to allow employee stock ownership plans (ESOPs), as defined by federal ERISA section 407(d)(6), to own up to 100 percent of the stock in a licensed cannabis business or in a business that owns a licensed cannabis business. It treats corporate officers and directors (or equivalent titles) of a business applying for or holding a cannabis license as the applicant/owner who must qualify for and be named on the license, while employees who participate in an ESOP, the ESOP plan administrator, and the ESOP trustee are, unless they are also officers/directors or hold interests outside the ESOP, not considered applicants or owners, not considered true parties of interest under board rules, and not subject to residency, criminal or administrative record checks, financial disclosure, or other vetting that otherwise applies to applicants or prospective owners. The bill directs the licensing board to adopt or change rules to identify true parties of interest when an ESOP is a partial or full owner. The bill makes several procedural and administrative changes to existing licensing law. It requires the board to conduct comprehensive evaluations of license applications, allows the board to request criminal history checks from the Washington State Patrol and the FBI (with fingerprinting required for FBI submissions), permits the board to delegate uncontested license approvals to staff subject to rulemaking, authorizes administrative law judges under chapter 34.12 RCW to preside over hearings, and preserves board authority to suspend or cancel licenses (including immediate suspension when the Department of Social and Health Services certifies noncompliance with a support order, with automatic reissuance upon DSHS release if other reinstatement criteria are met). The bill also requires licenses to list conditions, trade name, address, and expiration date, requires conspicuous posting, sets minimum age and residency rules for applicants, and defines ESOP plan administrator. The bill revises local notice, objection, and location rules. Local officials must be notified of applications and may file written objections within specified timeframes and request hearings; the board must notify relevant local authorities when a license is granted. The bill generally prohibits licensing within 1,000 feet of certain youth-oriented facilities but allows cities, towns, or counties to adopt ordinances reducing the buffer to no less than 100 feet for most listed facilities (with special, stricter requirements for research premises near schools or playgrounds). The board must give substantial weight to local objections based on defined “chronic illegal activity,” may not issue licenses in Indian country without the associated tribe’s consent, and will reimburse, one time per licensed entity, the annual renewal fee for non–social equity licensees that submit a social equity plan and are confirmed by the board. The bill also amends fee, license-count, and forfeiture rules for producers, processors, and retailers: application fee $250 and annual issuance/renewal fee $1,381, separate license required per location, retail licensees and related owners limited in the aggregate to five retail licenses, and the board must adopt a forfeiture process for retailers not operational within prescribed timeframes (no forfeiture within the first nine months; forfeiture required by 24 months unless prevented by local government action). Important portions of the statutory text are missing from the provided extracts (including the full text of some subsections, the formal identification of “the board,” and some phrasing that is unclear), so this summary is limited to the available provisions and does not describe any omitted or unclear provisions.

If enacted, the bill would allow employee stock ownership plans (ESOPs) to hold up to 100% of the stock in a licensed cannabis business and would treat corporate officers and directors as the named applicants/owners who must be vetted and listed on licenses, while employees who only hold stock through an ESOP (and ESOP administrators and trustees) would generally not be treated as owners or “true parties of interest” and thus would be exempt from residency, criminal background, financial disclosure, and naming requirements. Practically this lowers vetting and disclosure burdens for rank‑and‑file employees who participate in ESOPs, while keeping compliance and licensing responsibilities, background checks, and naming requirements squarely on corporate officers/directors; businesses can consider ESOP ownership structures more readily, but licensing authorities must adopt rules to identify who counts as a true party of interest when ESOPs are involved. The bill also clarifies local notice and objection rights, tightens retail limits and operational deadlines, and fixes license costs: application fees are $250 and annual renewal fees are $1,381 for producer, processor, and retailer licenses, retailers need a separate license for each location and are limited to five retail licenses per person/entity, and licenses that are not open to the public may be forfeited if not operational by 24 months (with a nine‑month nonforfeiture period and exceptions if local jurisdictions block opening). Local governments gain clearer power to object (20‑day windows for new applications, 30 days for renewals), buffer‑zone ordinances can be reduced to as little as 100 feet under certain conditions, and the board must coordinate with DSHS, the State Patrol, and the FBI for checks and suspensions; the text omits some subsections and effective dates, so timing and certain implementation details remain unclear.