Author: Alex Nelson

Cow with marijuana over the fence

Washington Lawmakers Can Allow Entry Into Emerging Economy by Legalizing Industrial Hemp | Op-Ed

On February 18th, the Washington State House of Representatives passed SHB1888, the Industrial Hemp Bill, 97-0, a move largely unexpected by many groups closely monitoring the hemp issue in Olympia. The bill will now be sent to the Senate, and with passage in that house, on to Governor Jay Inslee, who has stated on record he wants to be the most “green” governor in our nation’s history. Many legislators felt this issue had negative emotional ties to Initiative 502, the “marijuana reform” initiative, approved by voters in Washington during the 2012 election cycle. Most in pulp and paper, construction and textile industry analysts consider industrial hemp a completely separate issue. Nine states have existing industrial hemp laws that at minimum allow institutional research of hemp related products.

Even though it is the same plant family, hemp differs from the federally restricted cannabis sativa plant in that it contains low levels of the psychoactive ingredient Tetrahyrdocannibinol (THC). The bill limits THC content in industrial hemp to 1.0%. Hemp has hundreds of industrial products that can be created from hemp fibers and seeds. Hemp textiles, most commonly found in retail shops in Washington, are more durable than cotton and resistant to mildew. One acre of hemp produces 2 ½ times as much useable fibers as cotton. Industry estimates indicate hemp textile imports to Washington, primarily from Canada, were $12 million in 2012, $460 million nationwide. Other products include hemp seed oils commonly found in cosmetic products and hemp fiber based construction products including composite board and concrete. Newly researched hemp byproducts include biodiesel and biomass applications; evidence of success of those key components in industry is widely known.

In Washington, there exists a premier environment for industrial hemp production. Research has suggested that since major changes in federal and state law in the early 90’s regarding the Northern Spotted Owl, timber harvests were reduced 80% and over 168,000 jobs were lost statewide in the timber, pulp, paper and wood products industries. Not only will hemp grow like a weed in Eastern Washington’s fertile agricultural soils, the state has many shuttered wood products mills, factories and other industrial plants available on to convert to industrial hemp production.

The Pulp and Paperworkers’ Resource Council has tracked mill closures nationwide since 1981. According to their 2012 report, 89 production facilities in Washington have shut down, laid-off employees, closed machines or otherwise significantly curtailed production, resulting in the loss of 7,444 direct jobs. Nationwide, this figure is 99,501 jobs lost. In Washington State, primary strengths related to a surplus of capacity to convert to hemp production are a skilled workforce, production mills and facilities available for investment and retrofitting, and agricultural workforce and knowledge in the eastern part of the state where hemp will integrate into production and harvesting with minimal investment.

Economic benefits of increased job growth in this new industry are obvious. In pulp & paper, average salary statewide is $56,000. If only half of these curtailed jobs were replaced with hemp industry jobs with similar salaries, the direct impact to families and local economies would be about $120 million annually. Other hemp products industries could be incented to start up regionally, such as cosmetics, building products and oils; the effect of which is largely immeasurable, since there is no directly related surplus capacity information.

The key to fostering job growth and investment in this new industry is a friendly regulatory environment. Washington has an inconsistent history of economic policies in pulp, paper and timber over the past 25 years. It is important that the legislature and rule makers in state agencies understand incentives for private businesses to invest in a fledgling industry, and make good policy decisions when presented with a new opportunity like industrial hemp.

Clearly, the market conditions for growing, processing and manufacturing products utilizing industrial hemp in Washington State are desirable. The state has plenty of agricultural skill, acreage and workforce. Displaced workers in pulp, paper and other wood products are an available workforce that can be trained and deployed in hemp. Incentives exist for both private investment in production and new tax revenues for municipal governments. Demand for hemp products is growing nationwide. The State should consider the impact of legalizing private growing and production of industrial hemp as an important step to revitalizing the state’s struggling agricultural and manufacturing industries. Agency rules should not create a burdensome environment for licensing, certification, authorization and compliance. Certain tax and other municipal incentives should be considered to encourage private investment, especially since many jobs related to timber have been lost over the past twenty years.


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Op-Ed | AWB Turns Its Back on Challengers in Washington’s 19th Legislative District

One would think that if there was ever a time for the Association of Washington Business to take a hard line stance on business issues, it should be the 2012 election year. Not so in the 19th Legislative District, where AWB supported incumbent Democrats Brian Hatfield, Brian Blake and Dean Takko.

Many eyebrows raised following the AWB’s support of the 19th Legislative District incumbents, especially when these legislators fail nearly every endorsement test the state’s leading business organization has created to analyze candidates.

The AWB is typically referred to Washington State’s Chamber of Commerce and commits significant time, energy and money to support candidates that closely align to the goals of Washington State’s small businesses. The organization has several ways they review candidates for endorsement, including a candidate questionnaire, support for the ballot measures AWB has endorsed, a careful review of their pro-jobs or pro-business voting record and an interview process by members of the AWB Government Affairs Committee.

The challengers, Rick Winsman (R-Longview), Dixie Kolditz (R-Cathlamet) and Tim Sutinen (I-Longview) offer a remarkable contrast to the incumbents. All three have a high level of involvement, ownership and historical support of small business issues as well as commitment to all of the goals of AWB in many public appearances and in print. The three challengers are current or former small-business owners. Sutinen owns a computer store in Longview, Kolditz owns an adult disabled care business with 160 employees and Winsman is a former small-business owner and recently retired President and CEO of the Kelso Longview Chamber of Commerce. Winsman is also a member of the AWB’s Government Affairs Committee.

In 2012, AWB is focusing its attention on two ballot measures, Initiative 1185, regarding a 2/3 supermajority requirement to raise taxes, and Initiative 1240, regarding the establishment of publicly funded and independently managed charter schools in Washington State.

During the last legislative session in Olympia, the incumbent legislators in the 19th District voted to suspend Initiative 960 — the most recent implemented voter approved supermajority requirement to raise taxes. The voters of Washington State have approved the supermajority vote four times in the past 16 years and the legislature continues to repeal it by simple majority, including votes in favor by all three incumbents. Both Hatfield and Takko have described Initiative 1185 as unconstitutional and warn that it would allow the minority to control the majority. Clearly, since this is the fifth time it will be on the ballot, the voters of Washington State think differently. Two of the three, Takko and Blake, also oppose allowing a charter school option. In contrast, the three challengers — Winsman,  Koldt and Sutinen — passionately support the 2/3 supermajority requirement and charter schools.

The second test of a candidate — as designed by the AWB — is an analysis of their pro-business or pro-jobs voting record. In the past four years, none of the incumbents qualified for an automatic endorsement by the AWB. From 2008 to 2010, the incumbents had a percentage rating of less than 40 percent voting on legislation that affected jobs and businesses. In the year prior to an election, the incumbents’ business-friendly ratings increased to the exact same number, 64 percent. As indicated by a source inside the AWB’s Government Affairs Council, the significant increase in the three incumbent scores was due to three bills the AWB supported; the biomass bill and two bills regarding worker’s compensation and unemployment insurance reform. In contrast, in the adjacent 20th Legislative District, the incumbents earned automatic endorsements, as their 2012 ratings were in excess of 90 percent.

Challengers who do not have a voting record for AWB to analyze have two opportunities to express their views to AWB — a candidate survey and an extensive interview process. One would logically conclude that if a challenger candidate presented clearer support of all business issues through their survey and interview process, AWB would support them, especially in light of the incumbents’ poor performance on arguably the most defining test; their voting record.

Perhaps even more troubling is that even though the incumbents received the endorsement of AWB, the Association chose not to pledge any campaign funds to the candidates this season — a highly irregular decision for AWB which is organized — essentially — as a political group. All candidates make tremendous efforts to overcome the challenge of raising money. Former state legislators — such as those who are actively involved with AWB’s affairs — know this well, which makes the decision to not financially support their endorsees even more curious.

There is no argument that AWB traditionally endorses Republican candidates. In fact, AWB endorsed only seven Democrats in 2012, which is partly why the 19th District endorsements have caused discussion and drawn criticism. There are no other districts in Washington where AWB supported three incumbent Democrats.

It is arguable that in the 19th District, AWB abandoned their core principles and supported incumbent candidates that have done little in the past four years to earn the endorsement. By choosing not to financially support their endorsements, if anyone is second guessing the endorsements, it may well be AWB itself.


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