WSLCB - Executive Management Team
(September 16, 2020)

Wednesday September 16, 2020 1:30 PM - 3:30 PM Observed
WSLCB Enforcement Logo

The three-member board of the Washington State Liquor and Cannabis Board (WSLCB) and agency leadership meet weekly as the Executive Management Team to facilitate coordination between the appointed Board and staff.

https://lcb.wa.gov/boardmeetings/2020sep_schedule

Observations

There was a lot to unpack in the WSLCB’s first Executive Management Team (EMT) meeting in seven months, but highlights include news that Enforcement Chief Justin Nordhorn would be transitioning to a new role, the Cannabis Regulators Association was formed, and the Marijuana Odor Task Force was unable to hire a consultant.

  • At the end of her agency update, Deputy Director Megan Duffy described Nordhorn’s upcoming transition to a new Director-level position overseeing Policy and Rules Manager Kathy Hoffman’s team and a yet to be formed policy outreach team (audio - 3m).
  • Director Rick Garza described the successful formation of the new Cannabis Regulators Association as an Oregon-based 501(c)6 non-profit emerging from 3.5 years of Regulators Roundtable meetings. Garza was cagey as to whether or not he was elected to the fledgling association’s executive leadership team (audio - 3m).
  • Board Chair Jane Rushford prompted Director of Legislative Relations Chris Thompson to divulge details about the agency’s unsuccessful RFP on behalf of the Marijuana Odor Task Force for a consultant to perform testing and produce reports (audio - 3m).
  • Access Cannabis Observer’s segmented audio and all rulemaking documents below. We’ll have more Observations to share in the coming days.

Deputy Director Megan Duffy discussed Enforcement Chief Justin Nordhorn’s upcoming transfer to a new policy oversight position in the Director’s Office, and Nordhorn followed up with insights into his future role.

  • According to a WSLCB 2017 Topics & Trends bulletin, Nordhorn started with the agency in 1998 before becoming Enforcement Chief in 2011. In addition to the implementation of I-502 during his tenure as chief, the Enforcement division was also named Liquor Enforcement Agency of the Year in 2017 by the National Liquor Law Enforcement Association (NLLEA). Nordhorn served as NLLEA Board President from 2017-2018.
  • Duffy told board members that Nordhorn was “transitioning into a Policy and External Affairs Director position” with WSLCB “overseeing the Policy and Rules group” led by Kathy Hoffman. She said Hoffman had been “creating an internal structure to kind of carry out the work that’s been going on during COVID” and that Nordhorn’s role would “make it a more permanent fixture.” Furthermore, Nordhorn would become responsible for a “not yet formed outreach group which will also consist of existing employees throughout the agency.” Duffy explained that a centralized policy-making, interpretation, and communications structure had been recommended in the enforcement report produced by consulting firm Hillard Heintze in December 2019. She added that Nordhorn was expected to retain “his current position until we would find a new chief to run Enforcement” at which time he’d “shift into that director position” (audio - 3m).
  • While Nordhorn did not speak to his new duties, he did touch on subjects included in the portfolio Duffy outlined:
    • During his status update on the reorganization of the Education and Enforcement division, Nordhorn said he was collaborating with Director of Communications Brian Smith on “outreach efforts” which would feature a “video series” that was focused on external audiences. “Right now we’ve only been focused on the internal piece of that,” he observed, and “we want to either adapt those or polish them up to be able to share with the external stakeholders as well” to provide an “opportunity to see how we’re training folks and what the expectations are on those laws and rules” (audio - 12m).
    • Later, Nordhorn said that Enforcement was engaged in “a lot of assessments on our policies” and advisories the agency provides to implement a consultation and education approach throughout the division. He was complimentary of Hoffman, whom he said was “creating some structure around” the policy assessment process to plan for “the concerns that may be raised and what types of positions” WSLCB might “want to take if we see a legislative request come in.” Nordhorn framed this as basic preparation for “any type of position that the agency may want to take” (audio - 4m).

Director Rick Garza provided a summary of the most recent Regulators Roundtable, a biannual meeting among American and Canadian officials responsible for legal cannabis regulation.

  • The roundtable gatherings provide a venue for regulators to share expertise and information from their varied cannabis legalization efforts. While closed to the public, participating WSLCB staff typically briefed the Board on their activities at the events, such as the previous roundtable in Baltimore, Maryland at the end of 2019.
  • Garza elaborated on the group’s history which began with the first roundtable in Olympia in early 2017 with Washington, Colorado, Alaska, and Oregon represented. Since then, gatherings have occurred in Portland, Boston, Denver, Juneau, and Baltimore.
  • Following the emergence of the COVID-19 pandemic, the conference in Portland, Oregon initially scheduled for June was rescheduled as a virtual event to be hosted between August 17th and 21st with panels for two hours each day. Representatives from 27 states and 6 provinces participated along with U.S. and Canadian federal officials - “about 180 folks.” Garza said this format allowed for “people to work, and yet, at the same time be able to be part of the summit...and it went off very well” (audio - 7m).
  • Sessions at the roundtable mentioned by Garza included:
    • “Hemp and Cannabinoids”
    • “COVID-19 and Marijuana” where Nordhorn was a panelist
    • “Enforcement and Illicit Markets” in which Garza was a panelist
    • “Packaging, Labeling, and Advertising” where Hoffman was a panelist
    • “Lab Testing,” where Hodgson asked several questions
    • “Social Equity”
    • “Publicly Traded Companies” 
    • “Vaping,” with Broschart as a panelist
  • This roundtable included a feature which Garza said Washington officials had recommended: a pre-recorded “Regulator 101 session because there’s so many new states that continue to join the roundtable.” The recording included content from Garza as well as:
  • Garza credited Andrew Brisbo, Executive Director for the Michigan Marijuana Regulatory Agency, for offering staff to help run the sessions. Garza also felt that “we get better at this every time we do it.” Board Chair Jane Rushford commented on the “amazing” attendance she’d seen including a roundtable session with over 100 attendees.

Director Rick Garza noted that the Cannabis Regulators Association had been formed with officials from 17 member states.

  • The potential for formation of an association of cannabis regulators had been percolating for some time as Garza brought up the possibility on January 8th during a debriefing on the previous Regulators Roundtable. On August 4th, Garza mentioned the subject again, at that time forecasting “20 states and more” would likely join the organization to begin with.
  • Following his update on the virtual August 2020 Regulators Roundtable, Garza said the new Cannabis Regulators Association was established, comprising 17 member states as a 501(c)6 nonprofit organization incorporated in Oregon (audio - 3m).
  • Garza reported that Oregon Liquor Control Commission Executive Director Steve Marks had taken the lead on incorporating the group. A “constitution, by-laws, articles of incorporation were approved” in the week following the roundtable and an Executive Committee was elected.
    • At publication time, Cannabis Observer could not locate records which would indicate the association had been registered with the State of Oregon.
  • The new association hoped to “affiliate” with the Council of State Governments (CSG) and planned to meet with their representatives to write a memorandum of understanding (MOU). “The reason we think that’s important is because that allows services for us to use” such as hiring a part-time director.
  • Board Chair Jane Rushford asked whether Garza had been elected as one of the association’s first officers. Somewhat cagily, Garza didn’t directly answer but promised a forthcoming “press release that will share the formation of the association, kind of our principles, and our by-laws, and why we formed. And when we do that we’ll share who the officers are.”

WSLCB Director of Legislative Relations Chris Thompson provided a briefing to the agency’s Executive Management Team (EMT) on staff participation in two fall work sessions hosted by the Legislature’s primary cannabis policy committees.

  • The Washington State House Commerce and Gaming Committee (WA House COG) and the Washington State Senate Labor and Commerce Committee (WA Senate LBRC) are the policy committees which first consider most cannabis legislation. Distinguished from these committee’s usual public meetings, work sessions typically focused on grounding legislators in broader policy topics rather than addressing specific bills.
  • Thompson explained WA House COG’s September 15th work session focused on “Cannabis potency policy considerations” and that “LCB was not the main event but we were invited to set the context for this discussion” (audio - 6m).
    • Thompson said that committee members had been interested in the topic since a hearing on January 30th for HB 2546, which proposed a cap on tetrahydrocannabinol (THC) concentrations in the state’s legal cannabis products. He elaborated that the January hearing was “attended by very large numbers of people, there were many many speakers, there was a great deal of heat and passion around the question and there was significant support and opposition for the idea of limiting cannabis products to 10% cannabinoid concentrations.” In all, he felt it was “not really workable legislation, but it raised a number of issues that were interesting.” Thompson went on to describe how the “health and prevention communities” had “significant interest” in the bill while the cannabis industry had “significant alarm” about the bill’s impact.
      • Thompson incorrectly stated the senate version of HB 2546, SB 6332, received a public hearing. While a hearing was scheduled on February 3rd for WA Senate LBRC, the bill was removed from the agenda following the WA House COG hearing.
    • Starting off the September work session, WSLCB’s role was to “lay some context for the committee.” WSLCB staff provided a potency-centric presentation on testing, labeling, types of cannabis products, and their market share/sales volume since retailers began operating in July 2014.
    • WSLCB’s presentation was led by Enforcement Chief Justin Nordhorn with agency chemist Nick Poolman virtually present “as a backup” due to his “technical background.” Thompson indicated Poolman could speak to topics that “non-scientists like Justin and me wouldn’t be well prepared to address.” Thompson himself was unable to attend and had not viewed the video recording.
    • Nordhorn told the EMT that the agency’s presentation “went fairly smooth” and Poolman did “a great job answering some of the technical questions.” He said the “straightforward” presentation by the agency elicited few follow up questions from lawmakers. Nordhorn indicated he was working on an “ancillary follow-up” for one of the presenting groups not pertaining to cannabinoid concentrations. Overall, he believed that WSLCB’s information ended up being “in sync with the other stakeholders.”
    • Other presenters included:
  • A second work session for WA Senate LBRC was planned for September 28th, and Thompson suspected the event would be “more meaty” for WSLCB as the agency would be the sole presenter for 90 minutes. Senators were expecting updates on “COVID[-19] policy activities regarding the liquor industry and implementation of recently enacted legislation regarding liquor.” For cannabis, the committee expected an update “on sales, on criminal activity, and on social equity in cannabis.” He added that WSLCB’s materials for that session were still being arranged by staff (audio - 2m).

Board Chair Jane Rushford asked about the status of the legislatively mandated task force on cannabis odor which had received scant updates from WSLCB staff since it was created.

  • The Washington State Task Force on Marijuana Odor was created through a $30,000 budget proviso to WSLCB in the 2020 supplemental budget. Based on legislation which failed to advance on its own merits, the task force was charged with reviewing “The available and most appropriate ways or methods to mitigate, mask, conceal, or otherwise address marijuana odors and emissions and the potentially harmful impact of marijuana odors and emissions on people who live, work, or are located in close proximity to a marijuana production or processing facility, including but not limited to: (a) Filtering systems; (b) natural odor masking mechanisms or odor concealing mechanisms; (c) zoning and land use controls and regulations; and (d) changes to state laws and regulations including, but not limited to, laws and regulations related to nuisance and public health.”
  • The seven task force members included representatives of state agencies and “A representative from the recreational marijuana community or a marijuana producer, processor, or retailer.” No representation was offered to the regional clean air agencies.
  • As legislation, the task force was coldly received by Board Member Russ Hauge on January 29th. The budget proviso’s identical wording then raised concerns from other agency staff during a March 3rd board caucus.
    • Hauge called the concept “a terrible thicket” for the agency to wade into given the established air quality entities in the state were “laid out in some mysterious fashion” with members that weren’t accountable to other political entities like city or county governments. He found the fact that the task force wouldn’t address hemp odors to be “wacky.”
    • Director of Legislative Relations Chris Thompson pointed out that odor was “one of the most frequent complaints" fielded by the agency, although "there is absolutely nothing that we do with those complaints" as there weren’t “laws or rules under our purview” to limit or control smells. He suggested that “there is a role” for regional air quality agencies while acknowledging the cannabis industry had not had "uniformly positive" interactions with them.
    • Board Chair Jane Rushford felt WSLCB was “not a science agency" and that the task force’s mandate may fall “outside of our regulatory domain.”
    • Director Rick Garza said smells were a problem that WSLCB had encountered for five years. He believed it was more suited to regional clean air authorities as "we don't have any expertise around this.” He shook his head, “as usual things get sent to us because it has the word ‘cannabis’ in it."
    • Thompson noted that WSLCB would "see what we can get" in the way of an outside consultant with the $30,000 provided in the budget.
  • Since the budget was adopted, very little had been publicly said about the Marijuana Odor Task Force in WSLCB meetings.
    • On April 28th, Hauge expected the task force would be a “substantial burden on the agency” due to staffing and the required participation of a representative from the WSLCB. He volunteered to serve as he’d done “substantial work on odor issues under the theory of public nuisance” as an attorney (audio - 2m).
    • On June 2nd, Hauge made a small mention of the task force, saying he continued to work with Thompson to organize it (audio < 1m).
    • On July 8th during public comments, Cannabis Observer founder Gregory Foster asked the agency to make the meetings of the task force public - or at least record and publish the webinars. He wished the agency “good luck on such a curious subject” (audio - 5m, written comments).
    • On August 4th, Rushford anticipated the task force would initially convene in “mid-to-late September” (audio - 3m).
  • On August 10th, the WSLCB published a request for proposal (RFP) No. K1434 and a draft contract to find a vendor “capable of conducting odors and emissions detection and research services to research and report on the odors and emissions of legalized marijuana and licensed marijuana businesses.” The vendor would be expected “to research and report on the availability and appropriateness of addressing marijuana odors and emissions, and whether there are potentially harmful impacts of marijuana odors and emissions on people who live, work, or are located in close proximity to marijuana production or processing facilities.”
  • On August 21st, the WSLCB posted responses to questions received from potential vendor applicants in Washington’s Electronic Business Solution (WEBS), a procurement portal for state and local public entities. Potential respondents had many questions seeking clarification about the RFP’s focus on "the potentially harmful impacts of marijuana odors” as well as many questions about the measurement of cannabis odors and the absence of “minimum performance benchmarks or referenced standards for odor identification or testing.”
  • Cannabis Observer called attention to the RFP in the August 24th Week Ahead. In a subsequent public records request, we learned at least four companies submitted proposals to WSLCB (InfoSet):
  • At the conclusion of his legislative update to the EMT, Rushford directly asked Thompson about the status of the Marijuana Odor Task Force which he had neglected to mention (audio - 3m): 
    • Thompson admitted the agency had “tried to hire a consultant to give us some background and some scientific information about odor, about mitigation technologies and strategies, about policy practices in any other jurisdictions.” But he explained that after the RFP and responses to questions from potential vendors, “we got no responsive bids within our budget” which was $25,000 of the $30,000 provided by lawmakers. He said it was possible WSLCB would “try again to get some information from the consulting community,” but overall the RFP “didn’t work out for us.”
      • Bids varied by company. Among the four companies whose proposals Cannabis Observer received, RWDI offered the lowest bid quoting a total cost of $60,000, while TerraGraphics asked for $263,000 to fulfill the RFP’s statement of work.
    • Thompson noted that he’d been speaking to staff at the governor’s office, as Governor Jay Inslee was responsible for appointing the seven task force members - appointments Inslee “has made...in the case of a number of those positions” including Hauge. However, “the actual task force has not fully been appointed, as far as I know.” He indicated that Inslee’s staff had been busy “with priorities that are really crucial” and speculated that they’d been unable to “finish vetting the potential industry member appointees to that task force.” Thompson reported that WSLCB had “tried to assist” by offering recommendations to the governor’s office but that he hadn’t “seen final action on that yet.”

Director Rick Garza and Enforcement Chief Justin Nordhorn brought WSLCB’s Executive Management Team (EMT) up to speed on the agency’s enforcement reforms and responsibilities during the COVID-19 pandemic.

  • WSLCB’s enforcement practices had been undergoing change since early 2019 with the passage of SB 5318 which reformed “compliance and enforcement provisions” following complaints about uneven and overzealous policing.
    • WSLCB Enforcement and Education staff sought to implement recommendations from an independent review of their enforcement practices by consulting firm Hillard Heintze (H&H) completed in December 2019.
      • Garza briefed lawmakers on WSLCB’s progress on January 20th, noting the independent review was “positive, and not just problematic,” and that the agency would implement changes “between the next zero to six months.” However, since that time the State’s response to the coronavirus pandemic impacted nearly every aspect of WSLCB’s operations and led to a slew of modified and/or temporary guidelines for licensees.
      • Nordhorn led two webinars about the COVID-19 related changes on April 13th and May 21st.
      • Garza mentioned temporary enforcement practices during remarks to The Cannabis Alliance on July 9th.
    • SB 5318 also mandated the agency provide a “voluntary compliance program” which at publication time remained under development (Rulemaking Project), most recently receiving a public hearing at the September 16th board meeting.
  • Garza briefed the EMT on "where we are today" in relation to H&H’s recommendations (audio - 8m).
    •  He said the report’s 18 recommendations emphasized three “themes”:
      • “Interpretations of agency decisions, rules, policies, are inconsistently communicated” among both enforcement staff and “the regulated community.”
      • “A lack of transparency and understanding by stakeholders about agency decisions and interpretations.”
      • “There needed to be stronger outreach, communication, education, collaboration with the industry to help them understand and comply.”
    • Overall, Garza felt “LCB welcomed and accepted” the report and recommendations and that “nothing in the report...came as too much of a surprise.”
      • He noted that a Cannabis Penalties rulemaking project was already underway by the time H&H suggested it. Revised penalties were adopted by the Board on January 22nd. 
      • Enforcement “re-organized its advised policy procedures and developed expertise” while the WSLCB Licensing Division “implemented dozens of collaborative actions in 2019 to increase communication and effectiveness” with Enforcement.
      • Garza said “a lot of effort” enabled the agency to better “collaborate and communicate with the industries that we regulate, even before we had” H&H’s report.
    • Garza described how a small team "dug in early" to begin implementing reforms using the report’s suggested timeline. He explained, “we had a number of items that we wanted to concentrate on in the first six months of the announcement” of the report’s completion before progress was hampered by the pandemic. Nonetheless, “considerable progress” had been made, he said.
    • Changes in the Director’s Office were described by Deputy Director Megan Duffy during earlier comments (audio - 3m), including a new director-level position Nordhorn would transition into. Garza stated the new role would help evolve WSLCB’s COVID Legal/Policy/Rules team which had been meeting often to respond “within the hours rather than sometimes what may take weeks.” The team structure addressed certain H&H recommendations such as “interpretation of agency decisions, lack of transparency and understanding by stakeholders, and the need for more communication.” Policy and Rules Manager Kathy Hoffman and her staff would soon be combining with some COVID Legal/Policy/Rules team members to form an “outreach team” tasked with working “collaboratively with our industry.”
    • Garza and Director of Communications Brian Smith provided board members with a document outlining recommendations from the report, “what we implemented in our plan for that recommendation,” and their present “status.”
  • Nordhorn walked the EMT through Hillard Heintze’s recommendations and what had resulted from them (audio - 12m). 
    • Nordhorn noted WSLCB had “engaged in that contract with the consultant on an ongoing basis” which featured follow ups, providing documents for review, and “bouncing ideas off of them” - a process that was “working out very well.”
    • Policy Review
      • Nordhorn said 60 policies had been updated with “verbiage changes” while another “five or six” remained under discussion. Enforcement added an “education theme” to many internal policies, which Nordhorn called a “pretty underlying expectation in all the policies that we have.”
      • Changes to some policies were “still in bargaining” with Enforcement staff unions. In particular, the job descriptions for commissioned and non-commissioned staff were being debated, though Nordhorn emphasized that "education is highly represented in both of those particular approaches." Both commissioned/non-commissioned staff will "be on the same team reporting to a Lieutenant" to ensure that “all of the information being provided” would stay consistent.
      • Nordhorn said there were "equipment purchases underway" for firearms to be carried in a less “visible fashion” for a “softer approach” to officers' uniforms. Union representatives had been concerned about whether Enforcement would maintain the “same level of safety equipment,” a concern which agency staff were “working through.”
      • WSLCB’s internal affairs policy was being finalized with H&H inclusive of Director of Human Resources Claris Nnanabu’s staff as it would be “an agency policy” not limited to the Enforcement Division. Nordhorn expected final internal affairs changes representing “a lot of work” would be presented to the agency’s Management Team soon.
      • The agency’s Enforcement Notebook (EN) software had been upgraded for “capturing more education work, hours put towards education” which was incorporated into “result sessions for the [Enforcement] regions.” Regional offices were also being asked to “provide strategies on how to gain compliance through education.” Nordhorn felt WSLCB’s system modernization project (SMP) would further help this effort.
    • Internal Training and Communication
      • Enforcement Officer training manuals had been revised in collaboration with H&H, whom Nordhorn said had “basically signed off” on the changes. Manuals had been split into “one for the teacher, one for the learner, so we can make sure that both those areas are covered fully.”
      • Nordhorn said a “video training series” was being created to teach staff "laws and rules" uniformly. Approximately 45 videos had been created and would encourage officers to focus on “building a relationship with licensees and fostering trust.”
      • Enforcement had “a number of issues going on with the communications” such as “monthly WebExes” and “weekly bulletins to staff” to reinforce officer education.
        • See recent Enforcement Division Weekly Bulletins, some of which feature sections “Training Corner” and “Re-Organization 2.0”:
    • External Communication and Engagement
      • A survey sent to stakeholders on August 12th procured “over 600 responses” from licensees, according to Nordhorn. He said the outreach work would “create some understanding and awareness” for Enforcement staff on “how the industry operates” after staff organized and coded the information “into the training plan.”
      • Nordhorn said changes to WSLCB’s website permitted people to “file a complaint, or if you want to provide a compliment” in a clear, user friendly format. He then highlighted agency outreach using videos developed by Smith, part of Nordhorn’s upcoming role with WSLCB.
  • During his “around the table” update, Nordhorn discussed Enforcement operations throughout the pandemic and coordination with other state agencies (audio - 4m).
    • Washington’s response to COVID-19 was managed through a Joint Information Center (JIC) at the Washington State Emergency Operations Center (EOC) at Camp Murray. Nordhorn explained that of 59,000 complaints the EOC received “since mid-March,” 7,300 had been referred to WSLCB. Once adjusted for duplicative complaints, Nordhorn reported that Enforcement “tackled about 5,700 complaints” with the majority being “mask related, or social distancing related.” He praised most licensees, saying the agency had only issued “about 235” corrective actions, including verbal warnings, and written 11 tickets since mid-March. Nordhorn described licensees generally as “coming into compliance, which is just great.”
    • Nordhorn relayed that interagency meetings between WSLCB, the Washington State Department of Health (DOH) and the Washington State Department of Labor and Industry (L&I) furthered collaboration “and consistent messaging.”
    • WSLCB staff were participating in weekly meetings with theWashington Hospitality Association (WHA) to develop guidance for alcohol licensees. And WHA partnered with the Governor’s office, DOH, and WSLCB on an initiative called “Target Zero” aiming to avoid outbreaks in bars, restaurants, and grocery stores. Nordhorn added that staff continued to liaise with local health jurisdictions as well.

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