Legislative Information

With the conclusion of the 2025 legislative session, the Liquor and Cannabis Board (LCB) is now preparing to implement several new bills that will carry a heavy workload and have significant impact on our regulatory work across alcohol, cannabis, and tobacco. 

This year’s legislative session brought both opportunity and challenge.  As we transition into the implementation phase, we remain committed to transparent communication, inclusive stakeholder engagement, and effective execution of legislative directives.

First, please allow me to thank Director of Legislative Relations, Marc Webster, whose long hours, strategic guidance, cross sector collaboration and steadfast presence throughout the session were instrumental in representing the agency's interests. I was fortunate to have had the chance to join Marc often on campus advancing the agency’s mission, starting or building relationships, and accomplishing our policy objectives. 

This work would not have been possible without the commitment of our agency staff. I want to extend my sincere thanks to all LCB staff who contributed to fiscal note development, policy analysis, and bill tracking—your expertise and responsiveness were essential throughout a complex and fast-paced session.

This was a tough budget year for the state, and we recognize the financial constraints agencies are navigating. Nonetheless, I am confident that, together with the Washington State team, we will meet the challenges ahead of us and continue to serve residents with integrity, innovation, and accountability.

On the subsequent sections, I’ve asked staff to summarize key themes and bills of the 2025 session. In addition, just as importantly, what our implementation plans are going forward. Many of you will be engaged with us along the way and we look forward to continuing our work together on these and other topics.

William Lukela, Director

By Legislative Relations Director Marc Webster

The 2025 Legislative session was dominated by the state’s looming budget deficit. Due to planned spending increases and slowing revenue growth, sizable operating deficits were forecasted for the next few biennia. As such, the focus quickly shifted from agency spending priorities to belt tightening and reductions. This clearly impacted funding for Phase 3 of the LEEADS project, and the Legislature is reducing the agency budget in several areas. 

More specific to our agency’s work was the ongoing tension between those in the Legislature who are opposed to any expansion of alcohol service and those who want to liberalize alcohol statutes and see the current system as overly burdensome. We saw many bills on this topic, and though most did not pass, HB 1515 did. This bill expands outdoor service in areas that request such permission from the Board, and also allows for expanded service on “civic campuses” around the FIFA World Cup and other big events in the state’s largest cities. However, these provisions expire at the end of 2027.

Cannabis policy was relatively quiet, but the industry’s long-sought bill to relax some of the restrictions on retail advertising passed. In addition, a bill that clarifies retailers cannot use management agreements to sidestep the statutory cap on owning or controlling a maximum of five outlets passed as well; this was supported by the majority of industry members. 

One aspect of cannabis policy that generated a lot of discussion surrounds the Cannabis Social Equity Program. There were bills aimed at improving or studying it from both chambers, as members have heard from frustrated community members who are struggling to open a store and utilize their license. Neither passed, but LCB is tasked by a proviso with submitting a report on these challenges later this fall. 

By Legislative Relations Director Marc Webster 

Both of LCB’s agency request bills passed. HB 1341 was a clean-up bill following the passage of the medical cannabis excise tax exemption bill (HB 1453) in 2024. That bill allows retailers to offer an exemption from the 37% cannabis excise tax if the product is a certified medical product by the Department of Health, sold to a registered patient (also through the Department of Health), and sold by a retailer with a medical endorsement. Our auditors found it difficult to ensure that the exemption was being offered correctly and needed to exchange data with the Department of Health to verify that each condition was met. This wasn’t allowed under previous law, so our bill amended that section to enable this data sharing to occur. 

HB 1698 was drafted by our Licensing division to clarify when a MAST (Mandatory Alcohol Server Training) permit is required. Previous law had numerous and conflicting statutes on this topic; one listed a long but not exhaustive list of license types, while another stated that a licensee cannot employ anyone (whether a server or not) without a permit. The bill clarified that all servers in on-premises establishments need one, no matter their license type, and that non-servers do not. The bill also eliminated an obsolete permit type and a license type that is no longer used by anyone in the state. 

By Legislative Relations Director Marc Webster 

In addition to the LCB-request bills, we tracked several others throughout session (see the matrix here). For those that passed, we have already begun rulemaking to implement or will soon. 

Please be sure to see the Laws and Rules section of our website for proposed rules, legislative summaries, and other relevant information. 

By Licensing and Regulation Director Becky Smith

Below are several insights into our plans for and progress on implementing current and past legislation. 

Alcohol-Related

• Rescind SB 5448 (2023). This bill ended certain COVID-era temporary delivery privileges for liquor licensees. To implement, LCB will remove references to the delivery of alcohol from our website, internal documents, and the LEEADS system endorsement. We will also educate impacted licensees and update the MAST training. This new law goes into effect July 1, 2025.
   
• Implement EHB 1602 (2025). This bill modifies food service options by allowing contract kitchens for domestic breweries and microbreweries. We will be updating all public information and provide training to staff. 
   
• Implement HB 1636 (2025). This bill eases wine and spirit sales transaction limits. We will provide information and education to licensees through the LCB website and educate staff who may receive questions. 
   
• Implement HB 1698 (2025). This bill updates the MAST program implementation. It requires a planned system change to remove outdated license types. 
   
• Implement 2SSB 5786 (2025). This bill changes license, permit, and endorsement fees. The new rates will be reflected on the LCB website, the LEEADS portal, and internal fee and description sheets. We will partner with the Department of Revenue to ensure their Business Licensing Service system is appropriately updated. 
   
• Implement 2SHB 1515 (2025). The so-called “FIFA bill” relates to alcohol service in public spaces during the 2025 and 2026 World Club Cup and World Cup timeframe. We are developing a process for local jurisdictions, licensees, civic campus operators to request approval for three primary activities: expanded outdoor service, civic campus events, and fan zone events. We will update the LEEADS system with four new identifiers and work in ARC GIS to map approved areas. Education and communications are underway for both internal staff, licensees, interested parties and stakeholders. The budget includes funding to recruit, hire, and train project staff to implement this bill.
   

Cannabis-Related

• Implement ESSB 5403 (2025). This bill limits financial interest agreements for licensed cannabis retailers by determining management service agreement associations and sets a process to handle licensees who may exceed the retail allotment threshold. We are identifying all considerations for implementation and will provide information on the LCB website and provide education for staff. We will also communicate directly with those who have more than five retail/ownership agreements.
   
• Social Equity E2SSB 5080 (2023). The window for a new round of registrations for cannabis retail licenses opens on June 2, 2025. Currently, we have 69 retail licenses available. We have created videos and other instructive communications to support those interested in the registration and application process. The videos and communications are available in the Social Equity section of the LCB website.

By Director of Policy and External Relations Justin Nordhorn 

Policy and rules will be implementing seven bills that passed the 2025 legislature with an additional rule project to repeal rules based on sunsetting provisions from previous legislation. The Research Program will be conducting a Social Equity in Cannabis Program evaluation as identified in a proviso, within existing resources. 

The impact to the policy department and other divisions within the agency is significant. The eight new rule projects will be additional work on top of four rules currently in progress, and four additional rules which need to be opened based on rule petitions previously approved by the Board. Each rule project is led by one of the three assigned rules coordinators and involves staff members form multiple divisions to be sure operationalizing the legislative policies can be accomplished in an effective manner.

Rule project implementation for 2025 legislation include, in order of priority:

• HB 1515: Expanded alcohol service through 2027
• ESSB 5403: Cannabis license management agreements
• ESB 5206: Cannabis advertising
• HB 1602: Contract food service for breweries operating a restaurant
• HB 1636: Repealing the 24-liter sales transaction limit for products intended for resale
• HB 1698: MAST inclusion and the repeal of licenses and permits no longer in use
• 2SSB 5786: Liquor license fee increases

As rule sections opening for amendment may only be opened once at a time, some parts of legislative implementation may shift away from an anticipated project to be included in other implementation projects, which can mitigate time delays. 

By Chief Information Officer George Williams

Implement Tax and Fee Systems Replacement Project: LCB will purchase, implement, and maintain a new tax and fee system that allows licensees and LCB staff to manage taxes and fees in one system. 

This single system will replace three aging tax and fee systems, automate workflows for better efficiency, and integrate with the agency’s new LEEADS system to give licensees a more seamless experience. The system will also integrate with Workday (a One Washington project) to meet the state's mandate for agency compliance with their new Enterprise Resource Planning (ERP) system. 

The Legislature provided $8.2M in funding to complete this project no later than June 30, 2027.

By Director of Policy and External Relations Justin Nordhorn

2025 legislation implementation will see some significant policy shifts impacting licensees and other stakeholders. Examples of key bills that stand to have a big impact are listed below. 

• HB 1515 will likely contribute to investments into licensee and city infrastructure. However, the statute created by the bill has a sunset clause of 2027, so long term returns on any investments remain unpredictable. 
   
• ESSB 5403 changes how cannabis licensees utilize management agreements. This retroactive bill will ensure retail licenses are operated within the statutory limit of five maximum retail licenses. This may require changes in business structures and operations to become compliant. 
   
• ESB 5206 changes provision in cannabis advertising and shifts some oversight responsibility from LCB to local governments related to the size of tradename signs and billboards. 
   
• 2SSB 5786 will increase liquor license fees by 50% impacting all types of liquor licenses and permits. 

By Multiple Contributors

Rule projects have already begun, and new introductions could extend into July or August 2025. Once rules are open, interested party engagement will begin. Typically, engagement begins with a preliminary draft rule to illicit feedback on potential regulations. After initial comments are received, draft rule modifications occur prior to issuing formal draft rules, which launches a formal public comment period. 

There is no limit to the amount of interested party engagement sessions. Typically, a projected timeline will be introduced upon opening the rule for revision. Based on the amount and type of interested party feedback, additional engagement sessions may be held. Interested parties commonly include licensees, industry associations, public health and prevention professionals, and consumers or general members of the public.

We hope to have the first of the rule projects go into effect this December.

As always, the LCB website is an excellent source for the latest information. On our site, you can access: 

• Rulemaking activity
• Legislative fact sheets for 2025 (coming soon) and past years
• Sign up for topic-based email updates on LCB activity and news and
• Contact information for various LCB programs

Thank you for your review. Please look for updates in upcoming issues of our quarterly Topics and Trends newsletters, available on Medium.