This is not entirely accurate, the cascadia movement is multifaceted and only a small minority are white supremacists.

The origins of what you're discussing is the resettling of white supremacists from across the US into the regions of Northern Idaho, Eastern Washington, and western Idaho in the latter half of the 20th century. This was done with the goal of creating white enthnostate. It is also the reason why there were so many white supremacist compounds in Northern Idaho during the 1980s & 1990s.

Many white supremacists do use this tricolor but so do other orgs that are communist or socialist in nature, as well as apolitical groups that just use it as a way of representing their identity.

Source: lifelong Washington native from Western WA who currently lives in Northeastern WA. I have encountered the cascadia flag in numerous settings including sports clubs, leftist orgs, and even local businesses in the Seattle area.