WA Bill to Eliminate Residency Requirement for Marijuana Licenses Scheduled for March 25 Public Hearing

House Bill 2037 was filed last week by State Representative Melanie Morgan (D). The proposal would “modernize adult use cannabis laws” by eliminating the requirement that cannabis license holders reside in Washington, while simultaneously creating targeted tax exemptions for businesses owned by social equity applicants.

According to the bill’s findings section, the current residency requirement has restricted Washington licensees from accessing out-of-state investment, placing them at a disadvantage compared to licensees in nearly all other legal marijuana states. Lawmakers also note that the requirement poses a significant barrier for social equity applicants, many of whom lack the capital to establish and sustain a cannabis business. HB 2037 would provide a temporary business and occupation tax exemption for marijuana producers, processors, and retailers licensed through the state’s cannabis social equity program. The exemption would also apply to social equity-qualified owners who acquire a license through transfer or assumption, helping level the playing field for businesses historically impacted by prohibition.

The measure includes language acknowledging the likelihood of future federal rescheduling or descheduling of marijuana, emphasizing the importance of preparing Washington’s cannabis market for interstate commerce.

If approved by the Finance Committee, the bill will advance to the House floor for further consideration.