WSLCB - Board Caucus
(August 11, 2020)

Here are some observations from the Tuesday August 11th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Outgoing WSLCB Policy Analyst and Tribal Liaison Brett Cain led a session reviewing updates to the “Government-to-Government Consultation, Coordination, and Planning Policy” developed to guide agency interactions with sovereign tribal governments.
  • Cain told board members that agency staff worked to “modernize the policy” with tribes ”throughout the last year” (audio - 13m).
    • Cain said the original policy was “created in 2009, prior to legalized adult use cannabis in Washington, so it needed an update.”
      • From April to November 2009, a work group consisting of WSLCB staff and “representatives for 14 federally-recognized Tribes” developed draft recommendations and the initial consultation policy.
      • The WSLCB briefly renewed the Tribal Advisory Council (TAC) in April 2019, after which Board Member Russ Hauge called for a less formal consultation system.
    • Beginning in June 2019, the agency asked all federally recognized tribes in the state “to review the old policy and have a discussion about what needed to be added.” Following this request, the agency held “three rounds of review” with tribal representatives and Cain produced three revised versions of the document. The third revision was provided to all tribal chairs, several other tribal leaders, “lobbyists, some attorneys, and other staff for the tribes.” Cain said that he and Hauge worked with tribal leaders on incorporating “what they wanted to see in the policy.”
      • Washington state’s guiding government-to-government policy document for tribal relations is the Centennial Accord managed by the Governor’s Office of Indian Affairs (GOIA) along with the Washington State Office of the Attorney General (OAG). Other state agencies maintain their own policies, such as the Washington State Department of Transportation (WSDOT) Tribal Consultation Best Practices Guide or the guidance on the Washington State Department of Archeology & Historic Preservation (DAHP) Tribal Consultation Information screen.
    • After review by the tribes, WSLCB staff, and the OAG, Cain believed the revised policy document “accurately reflects the agency’s mission and our relationships with our tribal partners.”
  • Board Chair Jane Rushford asked Hauge for his perspective on the policy updates.
    • Hauge viewed the changed policy as memorializing “a really fundamental obligation we have” as a government institution working with sovereign tribal nations. He said an understanding emerged that the prior version of the document "didn't reflect what the current state of affairs was" and had become “basically perfunctory.” Hauge said that the policy was “not a dispute resolution process" but rather one WSLCB should implement "at the very beginning of any action that we take that might impact" any of the tribes in Washington.
    • Hauge stressed that the updates weren’t intended to “impact any of the existing compacts or agreements that we have with any of the tribes” nor any dispute resolution processes. The revisions would put “everyone on notice, including ourselves, that we have to be mindful of the actions that we take” to actively include “our tribal partners.”
  • Rushford asked what changes had been requested by tribal leaders: “were there any changes that are significant to the draft that we have?” 
    • Hauge remarked that several commenters “misunderstood” the purpose of the document, confusing it with formal rules governing the TAC. Some tribes were concerned that the policy would alter their compact or liquor memorandum of agreement (MOA), particularly around dispute resolution. “To respond to that we took out pretty much all reference to dispute resolution, hoping that this will be...a clearer statement of our obligation to reach out.” 
    • Cain added that several tribes wanted “to see some specific acknowledgement in the document that the licensing decisions that the agency takes around or even in tribal reservations, in Indian country, presumptively effects those tribes and that we need to recognize, formally recognize, that the decisions that we make as an agency regarding non-tribally owned or even tribal member owned businesses” required WSLCB to “work with and engage with tribes prior to making those decisions."
  • Rushford lauded Cain and Hauge’s work, observing that the Board “so greatly appreciate and respect our government-to-government relationships.” Board Member Ollie Garrett thanked Cain for his time at WSLCB, with Rushford adding that he’d been “a wonderful partner and an outstanding professional in so many ways.”
    • Cain’s departure from the WSLCB was announced during the August 4th board caucus. This was his final week with the agency before assuming a position with the Washington State Employment Security Department.
• An emphasis on avoiding disruptions to established dispute resolution processes encoded in cannabis compacts may have been related to a long-running---and recently settled---disagreement with the Suquamish Tribe over the collection and return of tax revenue.
  • On May 22nd, a revision and extension of the Suquamish cannabis compact was approved by the Tribe and the State. At that time, Cain said the revised compact included “clarification under the State taxes section of the document and an extension of the effective date of the compact to February 1st, 2030” (audio - 1m).
  • Cannabis Observer requested and received the revised compact as an addendum to a “Confidential Settlement Agreement” between the Suquamish Tribe, the State of Washington, and the WSLCB. The agreement was the culmination of a dispute resolution process that began in December 2016 when the Tribe filed “a notice of dispute and the Parties unsuccessfully attempted twice to mediate the dispute, and the Tribe then exercised its right to enter into binding arbitration proceedings.” In October 2019, “the Arbitrator issued an Interim Ruling and Award in the Tribe’s favor.” Section 5 of the Agreement describing the conditions for “Mutual Release” indicates the dispute arose “out of the Tribe’s claim that it is entitled to the state taxes collected by state licensees from retail consumers in transactions outside of Indian country where the Tribe had previously processed or produced the marijuana and sold it to the state licensee.”
    • See section (V)(F) of the original compact for the operative language on “Taxes” and (V)(H) in the revised compact.
  • Section 4 of the Agreement defines conditions for a significant settlement payment: “In exchange for withdrawing the arbitration and vacating the arbitrator’s Interim Award and other consideration as provided for in this Agreement, the State shall pay the Tribe a total of three million dollars ($3,000,000), plus interest as may be required herein.” According to the agreement, the first half million dollar payment was made on May 27th, less than a week after the revised compact was signed by the Board, Director Rick Garza, and Governor Jay Inslee.
• At publication time, the State had signed cannabis compacts with 16 of 29 federally-recognized tribes in Washington.
  • The Puyallup Tribe of Indians (January 28, 2015; compact).
    • The first compact authorized the creation and operation of a cannabis testing laboratory which would become Medicine Creek Analytics.
  • The Suquamish Tribe (September 15, 2015; original compact).
    • The second compact authorized production and retail licensing.
    • The Suquamish Tribe hosted the most recent TAC meeting in April 2019.
  • The Squaxin Island Tribe (September 30, 2015; compact).
    • Hauge and Cain visited the Tribe’s production facility in February.
  • The Muckleshoot Tribe (March 7, 2017; compact).
  • The Tulalip Tribes of Washington (September 8, 2017; compact).
    • The Tulalip Tribes created a dedicated agency for cannabis regulation, the Tulalip Tribal Cannabis Agency (TTCA).
    • In August 2019, Director Rick Garza discussed meeting with TTCA Director Lena Hammons to review the Tribe’s enforcement practices.
  • The Stillaguamish Tribe of Indians (October 13, 2017; compact).
  • The Port Gamble S’Klallam Tribe (January 4, 2018; compact).
  • The Samish Indian Nation (January 29, 2018; compact).
  • The Swinomish Indian Tribal Community (January 29, 2018; compact).
  • The Jamestown S’Klallam Tribe (August 29, 2018; compact).
  • The Confederated Tribes of the Colville Reservation (April 2, 2019; compact).
  • The Quinault Indian Nation (October 29, 2019; compact).
  • The Nisqually Indian Tribe (December 18, 2019; compact).
  • The Lower Elwha Klallam Tribe (April 28, 2020; compact).
  • The Sauk-Suiattle Indian Tribe (July 16, 2020)
  • The Snoqualmie Tribe (August 5, 2020)
    • The City Attorney for the City of Snoqualmie, Bob Sterbank, criticised the Board for not releasing the compact ahead of their voting to adopt it. However, Rushford noted that “tribes are allowed 14 days to seek exemption before releasing those public documents.”